Mueller Industries Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 21, 2024

There are 7 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to Lotus Technology Inc. Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session.

Operator

Please be advised that today's conference is being recorded. It is now my pleasure to hand you over to the Head of Investor Relations, Ms. Demi Zhang. Please go ahead.

Speaker 1

Thank you, Ann Berlin. Good morning, good afternoon and good evening, everyone. Thank you for joining LOTUS Tech's 3rd quarter 9 months 2024 Earnings Call. This is Demi Zhang, the Head of IR at LOTUS Tech. I'm honored to introduce company management with us today, CEO, Mr.

Speaker 1

Feng and also CFO, Alexis Tszy. On today's call, we will start with the prepared remarks from CFO, Alexis Tszywirth and then CEO, Mr. Feng, and then proceed to an open Q and A session. Before we continue, please be reminded that today's discussion will contain forward looking statements pursuant to the Safe Harbor provisions of the U. S.

Speaker 1

Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in relevant filings of LOTUS Tech with the U. S.

Speaker 1

Securities and Exchange Commission. The company takes no obligation to update any forward looking statements except as required under applicable law. Please also note that our earnings press release and this conference call will include disclosure of non audited GAAP financial information as well as unaudited non GAAP financial measures. Please refer to our press release, which contains a reconciliation of unaudited non GAAP measures to comparable GAAP measures, which you can find at ir. Googlelodas.com.

Speaker 1

With that, I'd like to turn the call over to our CFO, Alexis. Alexis, please go ahead. Alexis, you are the Vice.

Speaker 2

Thank you, Demi. Can you guys hear me? Good morning, good afternoon, good evening to everyone for your attendance today. My name is Alexis Ti and I'm the CFO of Lotus Tech. I want to begin by saying the company delivered more than 7,600 units of vehicles and achieved total revenue of $653,000,000 in the 9 months ending September.

Speaker 2

More than 2,700 units were delivered in the 3rd quarter, up 54% year over year and 2% quarter over quarter. 3rd quarter sales revenue was $255,000,000 up 36% year over year and 13% quarter over quarter. Most notable is the new revenue stream from our ADAS technology related income, which is high margin. To actually quantify the contribution, revenue of our intelligent driving business from customers other than Lotus surged to $11,000,000 in the 1st 9 months with a year over year growth of 4 50%. Investors can find the details in our earnings release published before this evening.

Speaker 2

Besides the Lotus models, other reputable brands of passenger and commercial vehicles will be rolling out with our in house developed leaders across the world. Gross profit margin was just 9% in the 1st 9 months, a step down versus the 11% achieved in the same time last year. 3rd quarter gross profit margin was just 3%, mainly due to proactive management of our inventory in response to trip protectionism, inflation impact and macro uncertainties. The margin impact is temporary and is likely to be shaped in the Q4 2024. Gross margin of our service revenue was 55% in the 1st 9 months versus 28% same period last year.

Speaker 2

Next slide please. To your left, you'll see that our EVs, which is mainly containing the luxury electric SUV model and partly the EMEA GT Sedan model, Jones Lee contributes more than 50% of total volume, while the Emera sports car model sales contributing the remaining. This pointed to accelerated delivery for the electric SUV and the EMEA GT Sedan model in the Q3. This is mainly driven by ongoing new market entries, improving customer tractions and rising product and brand awareness. The chart in the middle and the right shows a very balanced vehicle delivery and the retail network distribution across the world.

Speaker 2

Europe, inclusive of the U. K, is home based given our British heritage. Contributions to volume and revenue was 35% in the 1st 9 months, pointing to nearly 45% in 3Q. This is the fastest expansion quarter given new models entries. Through our arrangements, more than 300,000 charging stations are now available and accessible for Lotus drivers in Europe to charge their vehicles.

Speaker 2

Given that Lotus is early mover in electrification, ESG sensitive conglomerate for fleet purchase of luxury courtesy costs are growth potential opportunity for the company. China is new market to LOTUS and the only market that operates under the direct to customer model. Contributions in terms of volume and revenue was 25% after 6 years of ongoing investment expansion. CapEx cycle already pick up and forward looking strategic partnerships will enable Lotus drivers to access more than 18,000 charging stations across China, of which some of them are fully robotics. The U.

Speaker 2

S. Market remains as the key market for heritage performance sports car, contributing 22% of total volume deliveries. Given trade uncertainties, the company targets the ultra luxury segment with limited editions and performance variance ED models for brand positioning, profitability and deliveries can begin as early as end of this year. Lotus is well recognized in rest of the world regions for its F1 heritage and racing history, especially in the GCC region and other parts of Asia. The market is fragmented and operates under the distribution model, which is very asset light and fastest growing given that generation ex customers are seeking digitalization and smartification.

Speaker 2

The market is also least impacted by any trade uncertainties and new production orders for the next two quarters delivery is likely to increase its overall weighting in terms of contributing to our overall sales. Next slide please. Coming to our financial highlights. Total revenue for the 1st 9 months was $653,000,000 a 105% year over year increase. Sales of goods was $624,000,000 a 104% year over year increase.

Speaker 2

Service revenue was $29,000,000 a 129% year over year increase. Gross margin for the 1st 9 months was 9% versus 11% in the same period last year, and gross margin of sales of goods was 7% versus 10% in the same period last year. Gross margin of service revenue was 55% versus 28% in the same period last year. Operating loss was $598,000,000 in the 1st 9 months of the year, 18% year over year increase. Net loss was $667,000,000 Excluding the share based compensation expenses, adjusted net loss non GAAP was $633,000,000 a 20 percent year over year increase.

Speaker 2

Adjusted EBITDA loss non GAAP was $563,000,000 a 16% year over year increase. Now to the right hand side is the quarterly numbers. Total deliveries was 2,744 units, 54% year over year increase. Total revenue was $255,000,000 36% year over year increase. Gross margin was just 3% versus 15% same period last year, while net loss was $206,000,000 a 19 percent year over year increase.

Speaker 2

Excluding share based compensation and expenses, adjusted net loss was $209,000,000 and adjusted EBITDA loss non GAAP was $182,000,000 an 18% year over year increase. Next slide please. In the 1st 9 months of 2024, we continue to deliver strong operational growth driven by both the sales of goods and the sales of service. On top of delivery of delivery growth, we have also made significant progress in our Intelligent Driving business or better known as the ADAS, which is not booked under the service revenue. Currently, revenue of the ADAS business from customers other than Lotus was $11,000,000 contributing to nearly 2% of total revenue of the company and is likely to expand in the future.

Speaker 2

Secondly, gross margin strength due to proactive management of the inventory and is likely to reshape in Q4. We recently also announced securing of new $130,000,000 worth of ADAS contract in 2024 and part of it will be converted to revenue in 2025, supportive of blended GPM gross profit margin expansion. Lastly, as part of our commitment to our Win 26 strategy, we made continuous improvement to streamline our operation, drive efficiency and resource optimization and achieve operating expenses reduction for 4 consecutive quarters. Operating loss was $116,000,000 for the quarter, narrowed by 22% quarter over quarter and 2% year over year. Next slide please.

Speaker 2

In the 1st 9 months of this year, Lotus is the fastest growing brand and top performing British luxury heritage brand with deliveries ahead of the likes of Bentley, Rolls Royce, Aston Martin and McLaren. This is driven by 4 models in delivery, including our Evaya hypercar model, our electric SUV model, our Imira sports car model and our latest addition to the family EMEA, the GT Sedan model. Despite further than the segment and industry growth, we kept blended MSRP above US100000 dollars per unit as part of our price integrity and brand equity value protection measures. We have achieved $130,000,000 contract value from Intelligent Driving ADAS Business with multiple global auto complements in this year. We are continuously been making expansion into new markets and fill them with more models availability, more technologies and high performance variance to cater to different market demands.

Speaker 2

For example, we have reviewed the electric carbon model that is tailored for the North American market. Technology innovation is at the heart of Lotus, and this is demonstrated in the newly reviewed Pier V1 concept car, made with sustainable materials and all the next generation automobile technologies that will redefine performance and luxury in the future. Many of these components will be found in new models forthcoming. Next slide, please. Business Sustainability is at the core of the company, and the company has been improving efficiencies through streamlining operations and has won multiple awards, including the Reuters Sustainability Awards, the EUCCC Business Awards and so on.

Speaker 2

In all, the company is committed to continuously improve profitability, create long term value and deliver results to our stakeholders and shareholders. I'll pass it over to Mr. Feng, our CEO, for more details on the pillars that is driving our future growth. Mr. Feng, please.

Speaker 2

Thank you.

Speaker 3

I'd like to demonstrate our future growth from 3 aspects, brand, technology and also autonomous driving. For a luxury premium brand, it is very important to prioritize brand awareness improvement and also user experience. Meanwhile, we have to manage our cost. First, we have opened our Lotus boutique store in Beijing and has been widely recognized by the industry and also our customers. In addition to that, we have also provided a chat line service to our customers.

Speaker 3

This is the way to help us to increase our delivery value and also delivery price. This service has been deployed in China already and in quarter 4, it will be launched in North America. The delivery of Bespoke vehicle will commence in quarter 3 this year. Besides, we've also launched a Lotus Champion driver initiative because Lotus is born from the track and also born from the British. This is one of the reasons that we are trying to offer the track service to our customers Every series that we open this to our customers, within 1 hour, the poster will be acquired by all of our customers.

Speaker 3

In other words, it demonstrates our users' passion to get involved in such attractive services. And for our growth driven by technology, in our Vision 80 strategy, electric transformation is the cornerstone for our sustainable growth. In this Guangzhou Auto Show, we have released our 900 valves hyper hybrid EV technology. I want to highlight the difference of the hyper hybrid EV technology with a commonly understood hybrid technology. Usually, it was driven by engine and supplemented by electric motor, but for the hyper hybrid EV technology, it will offer electric vehicles driving experiences along with engine driven technologies.

Speaker 3

And such technology will satisfy Lotus users' pursuit of driving joy and the passion of driving. And in addition to that, I also want to highlight that this technology is different from extended range because in some circumstances, the extended range could not offer extreme or ultimate performance to our customers. For example, when the battery capacity is very low, the vehicle could not accelerate fast enough. And for our Lotus users, what we are trying to do is to provide a technology that can deliver the performance of Lotus at all certain scenarios. And we will be the 1st one globally to launch this 900 voltage hyper hybrid EV technology.

Speaker 3

And I also would like to share some of the parameters regarding this particular technology. First, the total range of this technology can give you more than 1,000 kilometers. In addition to that, you can offer dual flash or hyper charging experience. When the vehicle is plugged in, it can charge from 10% to 80% within 10 minutes. And when the vehicle is on the drive, the engine can also offer a flash charge experience to our customers.

Speaker 3

Another feature of this technology is that when the vehicle is on the drive, the charge speed is 5 times the lapse of the discharge. So as long as there are sufficient gasoline in the tank, it can offer a similar driving experience as the BEV vehicle instead of the pure ICE driving experience. In some certain scenarios such as in the highway, the vehicle or the vehicle equipped with technology can be purely driven by engines because in such a scenario, engine, it has the higher energy efficient compared with electric. This technology will be put into our future products. And our growth is also driven by ADAS.

Speaker 3

Lotus Robotics, this is a wholly owned subsidiary of the Lotus Company. It provides intelligent driving solutions with global coverage for both Lotus brand intelligent vehicles and other global leading auto partners. Our solution is can be achieved through end to end and this is a one model approach and such a solution has been put on a vehicle already. For our solution, the best advantage of it is that it can cover global markets. At this moment, OEMs or the suppliers of ADAS technology could not say that they can cover all global markets.

Speaker 3

However, we have already deployed this solution to Europe, Asia, GCC region, North America, Asia, India. In addition to that, we have also upgraded this technology through OTA in Europe. Especially in the Europe, we are ready to offer highway NOA capabilities as long as the regulation is passed. Once it's passed, we will be the 1st brands to offer highway NOA capabilities in Europe. For our ADAS technology, we will not only be able to supply it within Lotus, but also to other OEMs.

Speaker 3

For example, we have already cooperated with under GLE system. In addition to that, we're also building partnerships for external customers such as 1 OEM in Europe and also 1 top tier from Japan. In the next 2 to 3 years, there will be more brands covering more than 10 models, including commercial vehicles adopting Lotus data solutions. ADAS in the future will be our second revenue path for Lotus, which can give us greater profit and also a profit margin. As of September, Lotus Robotics has already achieved US19 $1,000,000 revenue a year over year growth of 2 17%.

Speaker 3

Revenues from other customers surged to US11 million dollars a year over year growth of 4.50%. In other words, external customers' revenue has achieved 58%. If we break it down by region currently, China is contributing 70% of the revenue and for non China region, they are accounted for about 30%. In the future, we believe it will be another way around. Revenues in the future will come more from U.

Speaker 3

S, Europe and also Japan. And some of our recent development progress, our first is our delivery updates. We have already delivered a total of 8,631 vehicles in the 1st 10 months of 2024. And in China, Lotus has already acquired 40% of ultra luxury vehicles, which means the vehicle is priced above US80000 dollars Even though we are in a rather niche but luxury premium market and the size of this market is not so that huge, What we're trying to do is to increase our market share in this particular segment. I'm bullish that by the end of this December, within segment of US80 dollars in China, particularly our market share can be above 50%.

Speaker 3

Besides the end to end solutions, we are also working on urban NMA solutions. In some key cities in China, we've been doing our better testing and in the future, it will be pushed to our users through OTA. So this OTA will based on a one model solutions. And in the future, once the Europe region passed the regulations, our highway NOA will also be delivered to our customers through MTA. In addition to that, in more regions such as GCC India, Asia, Japan, South Korea and Southeast Asia countries, EMEA will also be opened for orders soon.

Speaker 3

As usual, in next year, March, we're going to celebrate our Nurses Day. On that particular event, we are planning to launch our model year 'twenty six products, which will bring more impressive solutions. Capital Markets Day will also be held on December 4, 2024. We are currently undergoing to implement our Win 26 plan. In other words, in 2026, our operational cash flow turned positive and EBITDA turned positive.

Speaker 3

In 2026, we are planning to deliver our PHEV product, PHEV products globally. It will help us to boost the sales volume above 30,000 and our profit margin above 20%. For Lotus, we are not going to participate in the pricing competition. On the contrary, we are trying to increase or maintain our average selling price to give us more profitability. And meanwhile, we are also launching more limited editions and the bespoke editions.

Speaker 3

For our ADAS services, currently we have already acquired a country value of US130 $1,000,000 In the future, we are trying to expand this business because it will give us higher profit margin and also more revenue. In addition to that, we will keep optimizing our autonomous experience and also intelligence experience to increase the intake rate of our software subscription. To increase our profitability, besides expanding our revenue streams, we're also trying to manage our costs through bond reduction and also streamlining our operations. Thank you.

Speaker 1

Thank you, Mr. Cohen and thank you all, actually. Operator, we are ready for the Q and A.

Operator

Thank you. We will now begin the question and answer session. We will now take our first question from the line of Laura Lee from Deutsche Bank. Please ask your question, Laura.

Speaker 4

Hey, thank you for taking my question. And my first question is about you mentioned the $130,000,000 contract value of Intelligent Driving Solutions. Could you give more color on the cadence of revenue generation? Like when exactly will those models be launched? And will we like to receive a contract R and D or other payments before the launch?

Speaker 1

Thank you. Thank you, Laura, for your question. I will invite Mr. Feng to give answers to your question.

Speaker 3

So the contract value of our ADAS solutions is will be categorized by 2 groups. 1 is through NRE. And NRE, in other words, it will be based on the project different milestones, for example, the Q cost stage of the projects all the way to the SOP stage of the project. And when the vehicle is delivered to customers at that moment, we will be able to receive the full NRE. And the second approach is licensing and then the revenue for it will be calculated based on per vehicle.

Speaker 3

The first vehicle that's equipped with our ADAS solutions is a Link Enco Z10. This vehicle has already been launched. For highway NOA capabilities, we have already equipped to this vehicle with this technology kind of urban NOA technologies in recent months. The vehicle will also be it will be also available for this vehicle. In the future, there will be 4 more models from Lincoln Co to be equipped with our solutions.

Speaker 3

And for commercial vehicle next year, there will be one more model equipped to put out with our solutions.

Speaker 4

Okay. That's helpful. My second question is about you mentioned the hybrid product to be delivered in 2026. So will that be like 1 or more company like completely new models or it's like a PHE version of the current offerings?

Speaker 3

For the PHEV technology, it will cover all our models in the future. In other words, all of our models in the future will have EV version and also PEV version. As for the specific model that we are trying to launch in 2026, I think at this moment, I want to comment on it. But please stay tuned to our future product launch events. After our technological after we announced this technology, we have gained interest from both China's OEMs and also Europe OEMs.

Speaker 3

And for this particular technology and vehicle models, there

Speaker 2

are a

Speaker 3

lot we really would like to share, but not at this moment. The reason that we want to keep it for now because when we are ready to launch this product to the market, we want to be the first one to launch this technology and also the 1st luxury premium brand to do that to do so.

Speaker 4

Okay. Okay. Appreciate the color. I have one more question about the margin because I think the gross margin in 3.2% was above 3%. There is actually a material sequential decline.

Speaker 4

So my question is now like what's the main driver of this? And also looking ahead, how we think about like the trajectory of the vehicle margin? Thank you.

Speaker 1

Thank you, Laura. I will also still invite Mr. Fan to give you answer on that question.

Speaker 3

For the question, I want to say that in China, quarter 1 next year and also Europe and rest of the world, quarter 2 next year, we are planning to launch our model year 20 6 products. But before that, we are trying to finish our destock, particularly in Europe, because an unhealthy stock level is not going to help us to launch our new models. Currently in the China market, the stock level is at relatively healthy, while delivering new products to our customers. So our focus is to reduce the stock to a healthy level for Europe region next quarter And once the stock level returns to a healthy level, the gross margin will also be benefited from that. And when we are planning to launch new models to the market, we have to precisely plan the cadence because if the older models still have relatively large inventory in the market, it won't be conducive to selling new models.

Speaker 3

A good example is that one particular OEM when they are switching from old models to new models, they didn't plan it well. So the old model had a 40% discount and when they launched the new models immediately, the new model discounted by about 20%. And this is not a good outcome. Thank you.

Speaker 4

Thank you so much.

Speaker 1

Thank you, Laura. Operator, we're ready for the next one.

Operator

Thank you. Next question comes from the line of Gavin Smith from Ethos Collective. Please ask your question, Gavin.

Speaker 5

Hi, good evening and thank you Lotus Management for providing the informative updates to Q3 earnings. I have two questions here, hoping to get color on. My first question is, management mentioned earlier that operating expenses have declined for 4 quarters consecutive quarter so far. Will we continue to see a decline in quarter 4 this year? And what is the expectation for 2025?

Speaker 5

And what do you see as the major maintenance or drivers to help facilitate the further expense decline? Would it be via a reduction of staff or by some other means?

Speaker 1

Thank you, Gavin. I will invite Mr. Fanjian to give you answer on that.

Speaker 3

We have promoted a strategy called a lean that's effective because in the segment, the EV penetration rate is not very high and we have to think about how to manage to reduce the cost. For example, in marketing and sales aspect, we're trying to streamline our shop. The shop will be small but effective instead of large shop. And for large shops, it requires a higher cost and more people to run it. And for R and D side, our focus is on technologies that will bring Lotus as the leading player in this industry instead of spending our R and D in oilfield.

Speaker 3

In addition to that, we are also trying to leverage Geely's resources, for example, in EE architecture. In the future, we believe in the EV industry, the intelligent features will be the master have the features for our customers. So our current focus is on cutting edge technology developments and also the technologies that can bring us the high profit margin such as ADAS solutions. In addition to that, the lenses is also working on its traditionally well known field, which is chassis. We are currently working on intelligent chassis and those are the other aspects that we're currently focused.

Speaker 3

In summary, our future spend expense will be in 2 directions. 1 is on the technology and the product development and the second direction is about brand awareness establishment and also market exploration. In quarter 3, we've already started to seeing some outcomes. And in quarter 4, we believe it will be more pronounced. And our synergy with Geely will also give us more benefits.

Speaker 3

In the future, the development of IEE architecture will be led by Geely and we can use this technology off the shelf. And besides, the cost will be shared based on the volume and then for us, it won't be a huge cost to shoulder.

Speaker 2

Thank you. Thank you, Mr. Vincent.

Speaker 1

Do you have another question?

Operator

Thank you. Our next question comes from the line of Vincent Yung.

Speaker 1

Operator, I think Gavin has another question. Gavin, was that you?

Speaker 5

Would I have the opportunity to ask one of the second question here?

Operator

Yes, sure, please.

Speaker 5

Thank you. So my follow-up question is, what does LOTUS management expect the full year total loss to be for 2024? And generally, what will be the expectation for the next year, 2025?

Speaker 1

Thank you, Gavin, for your question. I will invite the CFO Alexius to give you color to your question. Alexius,

Speaker 2

Let me share with you a little bit of our disclosure process and also how. So, 1st and foremost, we kept our 2024 guidance and we have a Win 2026 strategy as what Mr. Fung has mentioned. So our objective is 30,000 units of sales volume driven by 1 new model that's forthcoming and aim of 20% gross profit margin. Now we are doing a monthly disclosure on our sales volume.

Speaker 2

So by about a 10th of every month, you will get the sales volume for the next quarter for the last month, sorry. It is likely that before Chinese New Year end of January and also early February, we will be out laying with or we'll be rolling out our 2025 guidances. Yes. So that is the time where we will probably finalize most of the things that's going on into the market. Now of course, I will say that 2025 is likely in the midpoint or just below the midpoint versus the 2024 guidance and also the Win 2026.

Speaker 2

But most important thing is that because we have a new model that's forthcoming in 2026. That's all probably I can share right now, yes, in terms of outlook for 2025.

Speaker 5

Sure. We are now. Thank you.

Speaker 2

Thank you, Kevin.

Operator

Thank you. Our next question comes from the line of Vincent Yung from SC Asia. Please ask your question, Vincent.

Speaker 6

Hi, good evening. Thank you for having me. I have two questions. The first one is, the company has delivered about 8,600 vehicles in the 1st 10 months. Is the management confident to achieve annual sales target of 12,000 units?

Speaker 6

What are the drivers to boost the monthly delivery to 1500 or 2,000 in November December, considering the holiday season are coming in Europe, which is your major market? So please, could you give the guidance on deliveries in Q1 of 2025 and the regional allocation? Thank you.

Speaker 3

Well, first of all, I want to say that the 12,000 likelihood is definitely challenging. However, we are confident to deliver this target. In China and particularly the U. K, the delivery cadence and the progress is quite promising. Meanwhile, we are trying to drive our delivery speed in EU.

Speaker 3

And in addition to that, we have already started our deliveries in some new markets, for example, Japan and South Korea. And for quarter 1 next year, the model year 26 products will commence delivery in China and it will be another driven point for our sales volume. And in quarter 2, our delivery will also commence in Europe and also rest of the world. In next year quarter 1, as we are launching our model year 'twenty six product, we believe it will stimulate our growth in sales for sure.

Operator

Thank you.

Speaker 6

Okay. Thanks. I have another following question is that how do you view the luxury EV demand in Chinese market? As I've seen, the Lotus vehicle sales in China has dropped actually in 1st 9 months compared to last year. So what do you think the reason caused that sales decline?

Speaker 6

And what are the strategies have in plan to boost the sales in China besides you just mentioned launching new models? Thank you.

Speaker 3

In China, in this particular luxury premium EV segment, which is the vehicle priced above $80,000 it is true that the penetration rate of the EV has dropped to roughly around 50%. However, LOTUS is keeping growing. And for our strategy, we are trying to gain our market share in this particular segment. Like I previously shared with you, in October in China, we have already acquired 40% in this particular segment. In the future, our target is to improve our market share to 50% or even 60%.

Speaker 3

This is one of our approach to demonstrate our competitiveness and by boosting our competitiveness, it's another way to give our confidence to increase our sales volume. In this particular segment, our expectation is to improve the penetration rate. However, if the penetration rate could not be improved, then our target is to increase our market share to become the absolute leading player in this particular segment.

Speaker 2

Thank you.

Speaker 6

Thank you very much.

Speaker 1

We will take the last one more last question due to the time stream update.

Operator

Thank you. Our last question comes from the line of Lin Zhou from UE Capital. Please ask your question, Lin.

Speaker 4

I will repeat my question in English. My first question is how much has been invested in the R and D of LOTUS Robotics so far and how much do you expect to invest going forward? And my second question is, does the company have any plans to capitalize on the intelligent driving business? Thank you.

Speaker 3

For the first question, the ADAS autonomous technology requires constant investment. This is not a one off one time investment. As our user base is growing, the data is growing, it requires more and constant investment. Currently, we will prioritize our intelligence investment into 3 areas, the intelligent chassis, intelligent smart cockpit and also autonomous driving. Particularly for autonomous driving, it can keep us at the cutting edge end in the industry and it will be our very important second revenue stream.

Speaker 3

So we will continue to invest in this particular area and we're currently we do not have a plan for capitalization. In the luxury premium segment, Lotus undoubtedly is a leading player when it comes to intelligent solutions and we will be far beyond compared with the other players in this same luxury premium segment. And such an advantage of LOTUS is not only limited to China, but also other global markets.

Speaker 6

Thank you.

Speaker 4

Thank you very much.

Operator

Thank you. I am showing no further questions at this time. I'll turn the conference back to Ms. Demi Zhang for her closing comments.

Speaker 1

Thank you, Emily, and thank you everyone for joining us today. If you have any further questions, please feel free to contact our IR team. And given the time constraint, this will conclude the call. And thank you again very, very much and have a great day.

Operator

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

Speaker 2

Thank you, everyone. Bye. Thank you.

Remove Ads
Powered by Quartr
Earnings Conference Call
Mueller Industries Q3 2024
00:00 / 00:00
Remove Ads