Good day, and thank you for joining us. Welcome to ECARX First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to your host for today's call, Rene Du, Head of Investor Relations at ECARX. Please proceed, Rene.

Good morning, and welcome to ECARX First Quarter 2024 Earnings Conference Call. With me today from ECARX, our Chairman and Chief Executive Officer Ziyu Shen; Chief Operating Officer Peter Cirino; and Chief Financial Officer; Phil Zhou. Following their prepared remarks, they will all be available to answer your questions during the Q&A session that follows. Before we start, I would like to refer you to our forward-looking statements at the bottom of our earnings press release, which also applies to this call. Further information on specific risk factors that could cause actual results to differ materially can be found in our filings with the SEC. In addition, this call will include discussions of certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to GAAP financial measures can also be found at the bottom of our earnings release. With that, I'd like to hand the call over Ziyu. Please go ahead.

Hello, everyone, and thank you for joining our call today. We started our year strongly with significant growth momentum from 2023 as electronic vehicle architecture [ improves ]. Cars are increasingly becoming computers on wheels. Software-defined vehicles and the technologies that underpin them will determine the winners in the next stage of the auto revolution. This is creating significant growth opportunities globally for underlying software and enriching vehicle experiences, which we are uniquely positioned to capitalize on. The opportunity is enormous. According to recent data, the L3+ assisted driving adoption rate hit 9.8%, while L2 hit 36.1% as of the end of March, reflecting how much room for growth vehicle [indiscernible] offers. Globally, EV sales are expected to increase from 14 million last year to 17 million in 2024, with 10 million of them expected to be sold in China, while global EV sales in the first quarter grew at roughly the same pace as they did a year ago, increasing by about 25%. They grew on top of much larger [ base ] but software-defined vehicles are not exclusive to EVs. This mega-trend is reshaping the entire auto industry. The automotive [indiscernible] we build are agnostic to the powertrain, they can support any vehicle. This is having a profound impact on traditional vehicle design and is a positive sign for our industry and the various our strategy for the future. We believe that our unique strengths, including our ability to adapt consumer technology for automotive markets, our deep understanding of the complete automotive intelligence stack, our strategic partnerships and our global operations, uniquely equip us to build stronger connections with auto makers, deliver cost-effective solutions that meet their evolving needs and build a sustainable path to profitability. We have already made significant progress to support this belief. We are…

Thank you, Ziyu, and good day, everyone. Our customer base continues to diversify as our business gains momentum. Beyond the Geely Group, we brought FAW Group on board this quarter to develop next-generation cockpits for the premium Hongqi brand of vehicles. The 2 FAW Group vehicles we are already working on are expected to begin -- start up production by the end of this year. We also added a well-known European automaker, which has already begun mass production. With the demand for the Volvo EX30 continuing to grow following its launch last year, we were also awarded a new project by Volvo, which we are very excited about. As Ziyu alluded to earlier, partnerships are key to our success. Ziyu mentioned Microsoft. In that partnership, we will jointly develop and deploy innovative products and solutions that seamlessly integrate cutting-edge large language models into a growing number of vehicles globally. In addition, we will use their AI tools to improve internal software development and efficiency. Synergies created by our growing number of partnerships, which also include the likes of [indiscernible] and Qualcomm, form part of our strategy to reshape the global automotive technology value chain by jointly developing innovative intelligent cockpits and intelligent driving solutions for our broader range of automakers and brands. The progress we have made over the past quarter continues to highlight the significant opportunity for us to leverage our research and development capabilities and continue to improve our operations. As of March 31, we had 582 registered patents and 592 pending patents globally. We have always valued international certifications and our robust internal processes and products have obtained 23 global accreditations that cover quality systems, functional safety and product functionality. On the product side, we unveiled several innovative automotive intelligence solutions and ecosystems through advancements at our…

Thank you, Peter, and hello, everyone. We began the year strongly as our business continues to grow and our financials improve. Total revenue for the quarter was RMB 928 million, an increase of 21% year-over-year. Computing hardware goods revenue was RMB 757 million, up 27% year-over-year, driven by the continuing demand growth of the new vehicle programs launched last quarter, as well as ramping up ADCU sales volume, which contributed approximately 5% to the total revenue from sales of goods. Software license revenue came in at RMB 75 million, down 26% year-over-year, primarily due to a decrease in volume of old vehicle program software deals, while the new generation software volume is still ramping up. Service revenue increased 39% year-over-year to RMB 96 million. This was primarily due to the launch of the new Lotus Car model and the new overseas TSP contracts signed during the quarter. Gross profit was RMB 205 million, a decrease of 2% year-over-year, which translates into a gross margin of 22%, a decrease of 5% year-over-year and 1% sequentially. With the intensification of the market competition, we expect margin pressure on our hardware products to continue over the medium term. To address this challenge, we will remain focused on driving cost reduction through optimizing supply chain management and the product component cost structure, driving fulfillment efficiencies, focusing on ECARX's offerings, value and [ portfolio ] selling as well as more deliberate in selecting our revenue opportunities and investments. Operating expense during the quarter decreased 37% sequentially and increased 8% year-over-year. The sequential decrease reflected spending seasonality and improved operations' efficiencies. The year-over-year increase was mainly driven by increased investment in the global market and international R&D expansions. Loss per share was RMB 0.84 compared to the previous quarter RMB 0.87. Adjusted EBITDA loss was RMB…

[Operator instructions] We will take our first question and your first question comes from the line of Megan Jin from Macquarie.

I have 2 questions of all the new business of driving domain control. So first is, what is generally our pipeline of this business? And then do you have a midterm goal and expanding strategy?

Hello, everybody, why don't I take that question? Thank you very much. Our ADCU pipeline, we're very confident of the opportunities going forward. The Skyland Pro product that we've talked through earlier in our call today continues to roll out features with a large focus on improving the driving experience, expanding our – navigate -- our highway -- Navigate on Autopilot and continuing to upgrade the capability of the system through [ OTA ]. We have successes of the SkyLand Pro on 2 Lynk & Co models already, the Lynk & Co 08 and the 07. We're continuing to build our product line in that space with recent announcements that we made in our Tech Day around establishing some of the ADAS capabilities inside our Super Brain products and with additional SoC product that we helped to create through the -- our SiEngine joint venture. And as we look at the recent reviews of the Lynk & Co models, they have shown to be quite competitive against some other industry experts in this space. So we're excited about the future going forward, and we're looking for even more additional opportunities for this platform.

My second question is on the [ same ] business. I remember -- are there any R&D synergies around this demand control across the cockpit as well as autonomous driving demand control? Because I'm curious how we should think about the incremental cost or like the future profitability, credibility or dilution change as we step into the new business?

For sure, as you look across ECARX as a business, I would start with 2 of our key capabilities and platforms inside our organization, is the ability to have a deep understanding on the hardware side and even a deeper understanding of the silicon and then tremendous software capabilities to really maximize the performance of the hardware with great, high-efficiency, high-performance software. So those capabilities certainly expand both product lines, both in cockpit and autonomous driving. And then as we mentioned, our announcements as we move towards a Super Brain product, as we call it, as we move towards more essential computing opportunities in the vehicle, and we do expect those domains will come together. And especially in vehicles that have a lot of cost pressure, we believe that we can help enable the software developed vehicle by engineering those solutions into a single box solution for the automaker that will provide both ADAS capabilities as well as in-vehicle infotainment capabilities. So that's a big game changer for the automakers. A few have started down that path, but we see a trend in the industry that this consolidation of systems inside the vehicle and the move towards the software-defined vehicle will continue. And that's a place where we believe having those 2 capabilities within our engineering organization that can help us substantially participate in the future trend.

And this is -- I'd like to add more comments on top of Peter's message. So obviously, the R&D synergies around the topic, ADAS solution and the LiDAR as you mentioned, actually, we are able to provide a standardized solution and a common platform as a [ menu ] for our OEM customers and which can significantly reduce the development cost and the cycle time of launching a vehicle to the market. So meanwhile, it has actually drive cost optimization through the economy of scale and eventually will improve our margin in the midterm and the long term.

Your next question comes from the line of [indiscernible] from SPDBI International Securities Limited.

This is [indiscernible] from FPDDI. I've got several questions here. I think the first question is about the margin question, especially on the hardware side, I've heard the CFO said that there is still margin pressure continues in the midterm. Can you give us some color on how the ASP goes out into the second quarter and into the second half of the year? And you also mentioned that you are doing some supply chain management and some cost control and could you explain a little bit maybe with some details or examples of how we can maintain our margin into the rest of this year?

Thank you, Mr. [Indiscernible]. Happy to take your call. This is Phil. So as we discussed in our last earnings release session, the pricing competition is vitally observed in the industry and most OEMs leverage pricing as a tool to maximize [ layer ] shipments and market share, and this resulted in the margin pressure in the overall supply chain and throughout the entire industry. But our Q1 gross margin performance actually is consistent with our estimation because we took a very proactive play in hardware, software and service portfolio selling as well as cost -- very effective cost optimization. So I think ECARX will continue to invest [indiscernible] in a big way as well as the globalization and our strategy is to serve the top OEMs in global markets and which is also a key, very key foundation for our sustainable and profitable growth. And in March, in our Tech Day, we noted in ECARX just announced several newly added products and solutions. And all this will enable ECARX to gain the competitive advantage in the market. And regarding the ASP or [indiscernible] vehicle, we keep driving the average selling price through our product -- new product launch and take Lynk & Co 08, for example, this is a super successful model. Basically, ECARX provide a full [ step ] solution, including computing hardware, ADCU and the primary auto solution. And all those add up together can increase our ASP close to RMB 10,000. At the same time, another very successful model, Volvo EX30. ECARX provides both computing hardware solutions as well as the gas automotive services. And the ASP is high as well, as high as RMB 10,000 as well. And all those are really good examples to show that ECARX actually are able to develop most of the ones the technology to gain the momentum -- to gain our customers' trust and improve our price and margin step by step. And at the same time, in terms of the cost optimization in our supply chain, yes, we are able to drive both commercial costs down as well as the VAV from the R&D side and what happened in Q1, even there's a price pressure, there is a price erosion from the customers, but through our proactive cost activities we are able to offset most of the so-called price erosion, which can help us maintain the gross margin performance in Q1.

And my second question is about our partnership with Microsoft as we mentioned in our prepared remarks, could you -- can the management give us some color on how the partnership with Microsoft [indiscernible]? I've also noticed as I mentioned is a large language model. Is it applied in the cockpit or is it applied in the autonomous driving? What functions will Microsoft bring to our products and how it will help our sales or maybe cost?

Yes. Thank you. This is Peter. Let me go ahead and take that question. I appreciate you asking that question. I think AI has tremendous examples to help us both improve our -- the capability of our external product as well as our internal operations. So in the activities we're having with Microsoft, they're quite wide ranging and we expect them to impact significant areas of our business. Initially, we're very focused on bringing the large language models into the vehicle, in the digital cockpit solutions. So we continue to expand the capabilities of our digital cockpit. ECARX started many years ago with infotainment products and has enhanced them into digital cockpit products and we continue to look at consolidating systems inside the car and adding more features. Phil mentioned the Google Automotive services that we've launched, obviously, in many, many international markets, we expect that the Microsoft large language model offering will also affect the solutions that we can offer in vehicle with that partnership. Additionally, we're working closely with Microsoft on various internal development tools that will also use AI capabilities to improve our internal R&D and our ability to generate automotive software in a very effective way, in a high-quality way, in a way that we can bring those solutions into vehicles extremely quickly, which is one of our key value propositions for the industry. So we expect we'll continue to explore that partnership in a deeper way and hope that in the future, we can even make more announcements about how we're affecting the future of the -- of our products with that solution with Microsoft.

And my last question is about maybe a little bit of longer-term growing momentum. And though we mentioned several times about autonomous driving, like software-defined cars, how do we see this trend in overseas markets like in the U.S. or in Europe? And how is ECARX expanding customers beyond Geely and in the overseas market?

Sure. I mean, fundamentally, the technologies that we're engaged with, whether they are the digital comfit and enhanced infotainment and connectivity inside the vehicle, whether they're ADAS and autonomous driving solutions or the software-defined vehicle, if you extend those capabilities both into the vehicle architecture and how the vehicle could become a more flexible software-enabled solution, those technologies, I think, are driving increased penetration and the future of the automotive industry in every market. So we expect significant changes in those technologies in every market that we're approaching, and frankly, everywhere vehicles are designed and produced. We're quite excited about our ability to continue to expand our capabilities and our business partnerships on a global scale. Honestly, the China market is moving extremely quickly in terms of these technologies, and we see advancements in the vehicles coming to China at quite a rapid rate, and ECARX has an extremely strong team, well positioned in the market. The majority of our 6.4 million vehicles are certainly on the road in China, but the non-China portion, the international portion continues to expand. We are having some very deep conversations now and in some RFQ processes here, primarily in Europe, and we're really able to show off the tremendous capabilities that we brought. And with the level of maturity we have in our solutions, we are often almost always able to show automakers that we have solutions that they're looking for in production, very mature and on the road, already demonstrating those capabilities. So we believe that establishes a great foundation for us to grow off of.

Thank you. [Operator instructions]. Next question comes from the line of Derek Soderberg from Cantor Fitzgerald.

I want to start with some commentary around in-house manufacturing. Is the plan to move the company towards fully in-house production --it's [Indiscernible] will it take for the company to make that transition? Can you just provide any additional color on this?

Derek, this is Peter. Thanks for the question. We are certainly expanding our capabilities in our in-house manufacturing, and we mentioned that we now have 2 facilities that are operating in China. We would expect that those facilities over the next couple of years will produce a significant portion of our sales. So I would expect we're continuing to engage with partners on a portion of our revenue as well. I think we're evaluating, let's say, on a strategic process on places where we should make investments and continue to grow our internal capabilities and also continue to work with partners. So I would expect us to use both as we go forward in a strategic way to make sure that we're managing both the risk of the supply chain as well as the cost competitiveness of that supply chain. And we also announced in our Tech Day that we're moving down the path of investing in a manufacturing facility outside of China as well and that we would expect to announce further details on that in the coming quarters. So I think you'll see us continue to make investments in that space as a selective investments in that space as a tool to continue to improve our margins and our cost competitiveness.

And then as my follow-up, Peter, the company has made a lot of technological advancements here, definitely made a few key integrations with various tech companies, I would say, over the past handful of quarters. What do you think is the most significant technological advancement that the company has made maybe over the past 6 months or so? What are you most proud of?

Yes. I would -- it's tough to pick one, Derek, thank you for the question. I think that -- I would honestly pick 2. When you look at the Antora product and bringing the Antora product to market, I mean, this was an SoC that was developed through our joint venture with [indiscernible], came to the China market, launched in vehicle in 2023 and has continued to expand. Now this year should ship in the hundreds of thousands of units, and that will continue to grow. And we announced in our Tech Day that we're adding the Super Brain capability into that SoC and that compute platform. And that really enables us to demonstrate all of -- many of our internal capabilities to be able to bring the ADAS domain and the infotainment domain closer in the vehicle to run on a single platform and provide great solutions for the automakers and provide them cost savings as well in their vehicle architecture and their strive towards getting to a software-developed vehicle. The other one, I think when you look across the announcements that we made here recently, our close partnership with Qualcomm is certainly on display. As we've launched 2 new platforms and even kicked off additional activities -- or 3 new platforms with Qualcomm and even kicked off additional activities on next-generation solutions. So across both of those pillars enables us to be very nimble, very competitive in all the markets that we're trying to attack. So I think we're quite proud of both of those activities.

Thank you. Your next question comes from the line of Jackie Tang from CICC.

So I ask 3 questions. The first one is actually following the previous one. So we have seen very amazing new platforms from ECARX, including the Qogir, Atlas and Pikes. So could you give us some color regarding how's the business developments for the 3 platforms, especially for Qogir -- if I didn't remember wrongly, during the Tech Day, [Indiscernible] said, is this going to be a new project which will be reviewed in April? But maybe I have missed that. That's my first question.

Yes, Jack, thank you very much for your questions. In 2 of those 3 platforms, we're already in deep development to bring those platforms to vehicle. Qogir is -- was already sourced, and we're working on developing that platform more deeply in our pipeline and bringing that finally to market. We announced the Atlas platform, we likely will see an SoC -- or excuse me, a start of production within the next 12 to 18 months on that platform as well. And then we would expect that the pipes platform maybe a little time later as it's more of an international platform for us. But those 3 platforms that we announced in our Tech Day, we certainly see a lot of traction in the market and expect that they will continue to yield extremely positive business development activities as we go forward.

All right. Very quick. So for the 6.4 million cars in the pipeline, out of which how much is [ going ] for the new platforms?

Sure. The 6.4 million vehicles are cars that we have on the road today, I think, as of the end of quarter. So those are -- that really demonstrates our scale and our historical contribution. We are growing at about 30% a year and I think in the last year, we've added more than 1 million units to that cars on the road, number that we keep quoting so we expect that, that will continue to grow. And that these new platforms that we've talked about will likely be coming to market, as I said, in the kind of next 12 to 18 months and start to add to that overall number of vehicles we have in the marketplace.

So for my final question, could you provide us some insights into the new projects going on in the Europe as we are launching a new project with European OEMs? So could you give us an insight how did you manage to secure these projects?

Certainly, I mean we ECARX as a company, started our international journey back in 2020 with the first vehicle that we launched. As we continued down that journey, I believe it was in '22 that we launched platforms with the Smart brand as well as the LOTUS brand that have launched throughout Europe and in other international markets as well. Last year was a huge milestone for us to bring the Volvo EX30 to market that vehicle with the Google Automotive Services will launch in more than 70 countries, as we said earlier. So it's really a worldwide car and demonstrates our capability to bring products to market in all worldwide markets. As I said earlier in the discussion in some of the prepared remarks, we are in very deep conversations with a number of automakers here in Europe. We have a handful of RFIs and RFQs in the process that we hope to see some significant traction throughout the end of this year. As we look at the international automakers, they often work at a different pace than what we see in China. So this is well within our expectation, our capability to deliver products to market extremely quickly is one of our strengths and if we are able to do that in a high-quality automotive DNA fashion is certainly critical to the future growth of the company. So I think we're making very solid progress in building up our relationships in Europe, and I would hope that we're able to announce in the coming quarters some significant progress there.

Yes, sure. We are also looking forward to that. So for my last question is regarding to the [indiscernible] platform, the Super Brain. So could you provide us the probable time line for the [indiscernible] platform where it's going to be the SOP? And also, I think the main reason for the OEMs to employ the [indiscernible] platforms is to reduce costs. But broadly configuration of our Super Brain, I don't really think the cost of that is going to be low. So could you also give us some insights regarding what are the [indiscernible] factors? And what are the difficulties that we have -- the ECARX has faced when doing business with OEMs discussing the prospects of the simpler brain platforms?

Certainly, that's a great question. I mean we see the Super Brain platform really as just a continued progress of something that's been kind of in the ECARX G&A from the beginning of the company. So we have -- along the development path that we've been down starting with the first quarter that we announced as well as the move from our infotainment platforms, our digital [indiscernible] platforms have been continually integrating more and more systems into our compute platforms and have enabled -- have been enabling simplification of the vehicle architecture through that effort. So we've demonstrated those capabilities in our latest platforms that are on vehicle today. So really, the Super Brain and Antora 1000 Pro Super Brain solutions are simply the next step in that evolution where we continue now to go beyond, let's say, concrete functions that we're integrating and also start to put ADAS domains into a single box solution. So I think that's well within the company's G&A. As we've looked at the average sales price, as Phil mentioned earlier, we're continuing to provide a more capable solution in vehicle and often that does come with some increased ASP on our unit, which is a great trend for our business. But our goal in that effort is to simplify the vehicle architecture through our software capabilities and our system capabilities and provide cost savings to the overall vehicle and our -- with our tight alignment with many of the [Genie] Group brands, I think we're well positioned to engineer those solutions in the vehicle and make sure that they come to market in an extremely high-quality way. So I would expect we would see Super Brain launches in the next 12 to 24 months as we continue to bring that capability to the vehicle and the automakers that we're working with are excited about driving cost savings inside their car.

Yes. So in the March Tech Day, ECARX also announced the all-in-one box Super Brain based on Antora 1000 vehicle and Antora 1000 SPV. Basically, the solution, the platform can provide a top [MP] due to Antora 1000, we call that as well 1000 Pro [ SPV ], actually it's a 16 [indiscernible] NPU, basically AI power. So basically, the platform can enable the digital cockpit parking and ADAS solution all in one box and actually it is the most cost effective benefit solution to the customers. So the price range could be RMB 3,000 -- around RMB 2,000 to RMB 3,000 around is super, super cost effective, right? So this is a typical example and the customers just love it, and we already demoed our solution in front of many customers. So this is a typical example that ECARX actually are able to further push a solution to the market and push our solution to our customers.

Just one very quick follow-up. So for the -- how's the has development process actually, especially for the software divided between the ECARX and OEM? How should we -- going to expect the working loads being shared?

Yes. It's a great question. We strive, I think, as a business to provide as much common platform as possible into the market. So you see us talking about our product road maps and in an effort that's our drive to align to a common platform with great hardware and strong base level software. Every OEM -- or many of the OEMs in the market have different models and different structures in the way that they do their development. So we often -- as we take on a new partner, work with them closely on how the balance of that workload fits between the 2 organizations. But I think our ideal model is to work ECARX in a position where we're providing a standardized solution to the market that we can leverage that R&D capability across multiple customers, and then work with the OEM towards how the customizations work for their vehicle. And we do that in a various set of strategic alliances, joint ventures and other methodologies. But we would often like would like the OEM customer to take the lead when it comes to those vehicle apps and customized features for their vehicle set and have ECARX driving common high-performance solutions at base level software and base level hardware technologies.

Thank you. Your next question comes from the line of Jane Chen from Jefferies. ???: This is Jane Fang, Jeffrey. I have 2 questions. My first question is about the guidance of second quarter and second half of the year. Can you provide some colors on that?

Sure, happy to take the question. So we all know that the market competition is fierce since last year. And despite the tough competition, ECARX is actually on the right path, on the right growth trajectory based on the customer nominations and the customer engagement. And the second thing is we keep this continued growth for longer term. And based on the nomination of the customers based on the pipeline that Peter just mentioned, based on newly added technology, we have a full confidence to grow our business at a high double-digit for growth year-over-year, that's for sure. And if you look at the ECARX's past the several years, we already build our momentum, and we strongly believe that the company's momentum will continue and lease growth [indiscernible] -- no doubt hit a second level. And the company also has a very clear goal, and we have a very consistent execution as well. So the overall goal remains unchanged, and this is our commitment to the current company strategy as well. So we are going to drive breakeven partly aggressively, and we are working towards achieving that goal as soon as possible through several key actions. Number one, we will stay on lean OpEx control -- OpEx operation. And the focus is all about focusing on narrowing down the loss of operations to improve our financial performance. The second thing, as I mentioned earlier, we will keep driving the cost optimization. So with the guaranteed top line growth and maintained our sustainable margin growth with the reduced optimized operating expense, eventually, we will iterate target very soon. So that is the answer to your question. ???: My second question is about -- is regarding the cooperation with FAW. As you mentioned before, 2 [Indiscernible] models will start mass production, and can you provide more color on details. I'm wondering what products are you supplying and the ASP and how is the profitability? And how can we expect the NASDAQ cooperation? Will it be expanded to autonomous driving field to more models or more brands on the FAW? That's it.

Yes, certainly, happy to take your question. And Peter, you may chime in for the product and solution cooperation with FAW. Okay. So obviously, cooperation with FAW is a milestone for ECARX, especially in customers -- diversified customer base expansion. And we anticipate to support FAW on innovation in digital carpets and smart mobility solutions, maybe including the ADAS solution as well. So this is a strategic partner -- partnership aiming to develop advanced intelligent copied for FAW's premium brands, [indiscernible]. And both parties will combine R&D capabilities and technology strength to build an end-to-end value chain for the development of intelligent copies with the goal of setting new industry benchmarks, especially on advanced operating system development and software development. And we will codevelop and co-designed copy domain controllers and turning our products with the brand ecosystem even beyond the [Indiscernible]. So I think this is very strategic, and we are looking forward to have more engagement with FAW and on many vehicles development and launching. Peter, would you like to put some more information about this -- the product and the technology side?

I mean, I think you covered it well, Phil. I think the combination of R&D capabilities and strengths from a technology perspective will help align our -- align solutions for the home see vehicles that I think are very strong fit with the ECARX road map. So we see that a number of our platforms will launch into those vehicles and then continue to support the road map on a go-forward basis.

Thank you. There seems to be no further questions. I would like to hand back for closing remarks.

Sure. Thank you. Thank you for your participation today. We are happy to announce that ECARX is on the right trajectory, and we will keep our more growth momentum as well as the sustainable and profitable growth. And we have a very consistent goal, as I just mentioned, we are targeting at driving our -- or even target very soon through our effective operating expense control as well as our cost optimization. Meanwhile, we will support our strategy to focus on R&D development globalization and build our ecosystem, both in China and outside of China. So please stay focused on ECARX's development, and we are going to announce a very promising future and to the public. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.