ZEEKR Intelligent Technology Q1 2024 Earnings Report

ZEEKR Intelligent Technology EPS Results

• Actual EPS: -$1.40
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

ZEEKR Intelligent Technology Revenue Results

• Actual Revenue: $2.04 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

ZEEKR Intelligent Technology Announcement Details

• Quarter: Q1 2024
• Date: 6/11/2024
• Time: N/A
• Conference Call Date: Tuesday, June 11, 2024
• Conference Call Time: 8:00AM ET

ZEEKR Intelligent Technology (NYSE:ZK) Co., Ltd. (NYSE: ZK) is a premium electric vehicle (EV) brand established by Zhejiang Geely Holding Group. Headquartered in China, ZEEKR specializes in the design, development, manufacturing and sale of intelligent electric mobility solutions. The company takes a vertically integrated approach, overseeing everything from vehicle architecture and software development to production and after-sales service.

Built on Geely’s Sustainable Experience Architecture (SEA) platform, ZEEKR’s product lineup blends performance, connectivity and premium craftsmanship. Its inaugural model, the ZEEKR 001, is a high-performance electric shooting-brake sedan offering long driving range and advanced in-car technology. The brand is also developing additional models, including compact sedans and MPVs, while integrating smart cockpit features, over-the-air software updates and flexible battery solutions to enhance user experience.

Since its launch in March 2021 and first deliveries in late 2021, ZEEKR has rapidly expanded its retail and service network across key Chinese cities. The company is actively exploring global expansion, targeting markets in Europe and Southeast Asia. Backed by Geely’s automotive expertise and strategic partnerships, ZEEKR aims to position itself as a leading player in the premium electric mobility segment by combining innovative vehicle architectures with digital services and customer-centric solutions.

ZEEKR Intelligent Technology Q1 2024 Earnings Call Transcript

Key Takeaways

• Zeekr delivered 33,059 vehicles in Q1 2024, up 117% year-on-year, becoming the top-selling BEV brand in China for models priced above RMB 200,000, with April and May adding over 34,700 deliveries towards a full-year target of 230,000.
• Expanded its lineup with the Zekr 001 2024 (800 V ultrafast charging, 1,000+ upgrades), the Zekr 009 Grand (world’s only 4-seat LIDAR MPV), the Zekr Mix on the new SEA-M architecture, the refreshed Zekr 007, plus two new models (Mix and a mid-range SUV) slated for H2 2024.
• Continued in-house advances in intelligence with the industry’s first automatic parking in mechanical spaces, a dual-8,295-chip smart cockpit supporting AI large-language models, and leading ADAS for highway navigation and parking.
• Built a leading 800 V ultrafast charging ecosystem featuring the world’s first 800 kW V3 station, 1,070 self-built stations (2,615 charging piles), and integration with 719,000 third-party piles, aiming for 1,000 ultrafast stations by end-2024 and 10,000 piles by 2026.
• Posted Q1 revenue of RMB 14.7 billion (+71% YoY) with gross margin at 11.8% and vehicle margin at 14%; net loss narrowed 18% to RMB 2.2 billion, while guiding 2024 R&D spend of ≈RMB 10 billion and maintaining capex around RMB 1.9 billion.

Presentation

[Operator]

Hello, ladies and gentlemen. Thank you for standing by for ZEEKR's First Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Jing Yuan, the CFO of ZEEKR. Please go ahead.

[Jing Yuan, CFO at ZEEKR]

Thank you, Jason. Good evening and good morning, everyone. Welcome to ZEEKR's fourth quarter 2024 earnings conference call. Before we continue, please be reminded that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. 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 certain company filings with the U.S. Securities and Exchange Commission. The company does not take any obligation to update any forward-looking statements except as required under an applicable rule.

[Jing Yuan, CFO at ZEEKR]

Joining us today from ZEEKR's senior management are Mr. An Conghui, co-founder and CEO, and I am Jing Yuan, CFO of the company. Our CEO will make his remarks in Chinese, followed by an English translation. With that, I will now turn the call over to our CEO, Mr. An. Please.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

线上的各位朋友们，大家好。我是ZEEKR CEO安聪慧。感谢大家参加ZEEKR 2024年第一季度的财报电话会议。

[Translator]

Hello everyone, I am Andy An, the CEO of ZEEKR. Thank you all for joining ZEEKR's first earnings call as a public company.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

今年一季度ZEEKR实现了33,059台的智能电动汽车，同比增长117%，销量实现了翻三的增长，也是品牌开启交付以来最好的Q1，持续稳居200,000以上的中国纯电品牌的销量冠军。

[Translator]

In the first quarter of 2024, ZEEKR delivered 33,059 intelligent electric vehicles, representing a 117% year-on-year increase. This doubling of sales made this quarter our best Q1 since our first delivery and secured ZEEKR's position as the top-selling BEV brand in China for vehicles priced above RMB 200,000.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

今年4月5月ZEEKR分别交付了16,089和18,616台汽车，现在目前累计交付量已经过了260,000台。我也相信随着全新的ZEEKR 001、ZEEKR 007等车型的产能的提升，我们是有信心的持续拉升终端的交付数量，加速能够实现全年230,000台的交付目标。

[Translator]

In April and May 2024, we delivered 16,089 and 18,616 vehicles respectively, bringing our total cumulative deliveries to over 260,000 units. With the production capacity ramp-up for our latest models, including the ZEEKR 001 2024 model year and the ZEEKR 007, we are confident of maintaining strong growth momentum in our delivery volume for the remainder of this year. Consequently, we will accelerate our progress towards our full-year target of 230,000 vehicles deliveries.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

我想今天的会议接下来我想从产品的投放、智能进化、补能分派、渠道服务和全球拓展五个方面分享一下ZEEKR近期的一些成果和一些规划。

[Translator]

Now I would like to share some details of ZEEKR's recent achievements and our plans across five areas: product lineup, intelligence advancement, charging solutions, channel service capabilities, and global expansion.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

首先在产品投放方面。

[Translator]

Let's start with the latest additions to our product lineup.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

今年2月底全新的ZEEKR 001的上市，整车实现了1,000多项的升级，比如说全系实现了800伏，全系也标配了最先进的8295集团平台和最多数量的音响系统和激光雷达等等，以极致进化引领行业开启了列装的2.0时代。也经过了首月的产能的爬坡段，在4月5月全新的ZEEKR 001持续的月交付坡段，并蝉联25万以上的纯电车型的销冠，也不断地刷新全球列装车的销量纪录。

[Translator]

We launched our ZEEKR 001 2024 model year in February this year, boasting over 1,000 upgrades, including numerous industry-leading performance and functionality enhancements. The ZEEKR 001 2024 model year features an 800-volt ultra-fast charging system, the 8295 intelligent cockpit platform, multiple speakers, and much more, establishing the next generation of pure electric shooting brakes with outstanding innovation. Following its initial production ramp-up, monthly deliveries of the ZEEKR 001 2024 model year surpassed 10,000 in both April and May, maintaining its position as the best-selling pure electric vehicle priced above RMB 250,000 and setting new global sales records for global shooting brakes.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

在4月19号我们也发布了四座的超豪华的旗舰MPV ZEEKR 009光辉，并且在5月24号开启了首批的交付。ZEEKR 009光辉也是全球唯一的搭载激光雷达四座的MPV，并以一系列的全球首发的安全创新和顶奢的体验重新定义了新能源时代的超豪华产品，引领了全球高端的出行的需求。

[Translator]

On April 19, we unveiled the ZEEKR 009 Grand, our deluxe version of the ZEEKR 009, and commenced deliveries on May 24. The ZEEKR 009 Grand is the world's only four-seater MPV equipped with LiDAR. It redefines the ultra-luxury in the new energy vehicles era with a series of globally pioneering safety innovations and top-tier luxury amenities, setting a new standard for the ultimate mobility life experience.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

也在今年4月北京车展上，我们也基于未来出行需求打造的浩瀚M架构。基于该架构打造的首款的家庭出行产品ZEEKR MIX也全球首秀。ZEEKR MIX的定位是未来的家，应该说这是非常创新的，是同级空间最大的五座车型。我相信它凭着一系列的创新科技，颠覆传统的空间的形态，一定会给用户带来丰富的座舱场景的模式和体验。

[Translator]

At the Beijing Auto Show this April, we introduced the ZEEKR MIX, our first product for family users and the largest five-seater model in its class. The ZEEKR MIX is also our first model built on our SEA architecture, a groundbreaking platform specifically tailored to meet autonomous driving and the future intelligent mobility demands. Positioned as an intelligent living room on wheels, ZEEKR MIX features a series of innovative technologies that redefine traditional special concepts and empower a wide range of cockpit scenario models.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

ZEEKR 007今年1月1日开始交付的，4月份我们又推出了后驱的增强版，该版型也进一步提升了产品的市场竞争力。在浙江国际赛车场的全速加速ZEEKR 007成为了RMB 50万元以内最快的量产电车。

[Translator]

We began delivering ZEEKR 007, a smart electric sedan, on January 1st this year. We launched an updated 2024 version three months later, boasting rear-wheel drive and an array of extra features to further boost the model's market competitiveness. Its recent performance at the Zhejiang International Circuit secured its position as the fastest mass-produced model priced under RMB 500,000.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

我们也会在今年下半年正式上市ZEEKR MIX，并将发布全新的中大型的纯电SUV，让ZEEKR的产品的矩阵达到了六款车型。也就是说今年下半年会新增两款全新的车型。这样的话，我们从紧凑的SUV到中大型的MPV，各个新闻市场打造标杆产品。

[Translator]

In the second half of this year, we will launch two new models. We will officially debut the ZEEKR MIX and a new mid-range pure electric SUV in the second half of this year. These vehicles will expand ZEEKR's product lineup to six models, establishing benchmark products across market segments, including sedans, compact SUVs, and large MPVs.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

在智能进化方面。

[Translator]

Next, our accomplishment in the intelligentization.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

ZEEKR的智能化始终坚持自研和共创两条腿走路，并从智能驱动、智能驾驶、智能座舱三个维度来协同发展，引领行业创新。智能驱动以全新的ZEEKR 001为例，比如CCD的电子减震、双向风华、智能磨盘等等一些底盘的黑科技，让全新的ZEEKR 001拥有了百万级的乘驾体验。

[Translator]

ZEEKR remains committed to advancing intelligent technology through both in-house development and collaborative innovation, propelling synergistic growth in the technology-driven solutions, autonomous driving, and smart cockpits. The ZEEKR 001 2024 model year is a prime example of our technology-driven approach, equipped with the cutting-edge features such as CDC Electromagnetic Dampers, dual-chamber air suspension, and the intelligent Magic Carpet system. The ZEEKR 001 2024 model year delivers an ultimate driving experience.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

ZEEKR试驾的自研方案围绕着高速领航、泊车等用户高频使用的刚性的场景，我们持续的夯实行业的领先地位。我们也在5月15日开启了ZEEKR 007的OS 6.1版本中，ZEEKR在全行业量产首发了机械车位的自动泊车功能，这可以充分体现出ZEEKR的智能驾驶的能力。

[Translator]

ZEEKR's self-developed autonomous driving solutions prioritize high-frequency user scenarios like highway navigation and parking, further solidifying our industry-leading position. With the launch of ZEEKR 007 OS 6.1 on May 15, we were proud to introduce the industry's first automatic parking functionality for mechanical parking spaces in mass-produced vehicles.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

关于智能座舱的ZEEKR秉承着极致开放的开发理念，以超强的算力为基础，对于音响系统、AI大模型的交互、生态开放进行了持续的探索。在ZEEKR 009光辉上，我们实现了双895芯片计算平台的全球量产首发搭载，为前后舱提供了独立的算力支持。无论是座舱系统的响应速度、图形、视频处理的能力，还是AI的大模型计算，目前经纬目前行业的领先水平。

[Translator]

In terms of smart cockpit, ZEEKR has adopted an extremely intelligent and open-minded development philosophy. Harnessing our powerful computing capabilities, we continue to push boundaries with innovation across sound system, AI large language model interactions, and the open ecosystem. Our ZEEKR 009 Grand, the first mass-produced vehicle to feature a dual 8295 chip computing platform, highlights our dedication to pioneering technology. This cutting-edge setup provides independent computing power support for the front and the rear cabins, ensuring industry-leading performance in cabin system responsiveness, graphic and video processing capabilities, and AI large language model computation.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

在补能生态方面。

[Translator]

Thirdly, our charging network.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

ZEEKR在全行业率先打造了3个800的超快充的全生态的解决方案，不断地引领超快充技术和创新与拓展。我们有800伏的车，你也有800伏的电池，也有电池的金砖电池，还有800伏的补能网络。尤其是ZEEKR是目前全球量产800伏车型最多的车型，旗下包括了全新的ZEEKR 001、ZEEKR 001 FR、ZEEKR 009光辉、ZEEKR 007、ZEEKR MIX等多款车型。在超快充补能生态网络建设上，今年4月份我们又正式落地了全球首座800千瓦的V3集充站。该集充站配备有8根行业第一的V3集充桩，单枪的峰值功率可达到800千瓦。全新的ZEEKR 001实测的情况来看，SOC从10%-80%，超快充实际只用了11分28秒。

[Translator]

ZEEKR is at the forefront of innovation in ultra-fast charging technology. We have pioneered a three-pronged 800-volt ultra-fast charging ecosystem comprised of our vehicles equipped with an 800-volt electrical system, 800-volt batteries, and an 800-volt charging network. Notably, ZEEKR is world's top manufacturer of mass-produced 800-volt vehicles, including the ZEEKR 001 2024 model year, ZEEKR 001 FR, ZEEKR 009 Grand, and ZEEKR 007. In April this year, we proudly unveiled the world's first 800-kW V3 ultra-fast charging station. This state-of-the-art facility boasts eight industry-leading V3 ultra-fast charging piles, each capable of reaching peak power of 800 kW. Actual tests on the ZEEKR 001 2024 model year demonstrated remarkable efficiency, with the state of charge increasing from 10% to 80% in just 11 minutes and 28 seconds.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

截止到5月底，ZEEKR自建充电站达到了1076座，当然这包含专用的场站，并已上线了487座的集充站。集充桩累计现在也达到了2600多根，800伏的超快充桩的保有量居行业第一的。除此之外，ZEEKR APP的充电地图接入第三方的优质的充电网络已经覆盖了340多座的城市，有79万多瓦的充电枪。目前ZEEKR也正在加速推进我们原来的计划，千站万桩的计划。我们预计在2024年集充站将达到1000站，预计2026年集充桩的总数能超过1万根。

[Translator]

By the end of May, ZEEKR owned 1,076 self-built charging stations, including 487 ultra-fast charging stations and a total of 2,615 charging piles. We own the largest number of 800-volt ultra-fast charging piles in the industry. Furthermore, ZEEKR's app's charging maximally integrates high-quality third-party charging networks, extending our coverage to over 340 cities and over 790,000 charging piles. We are currently accelerating our 1,000 stations, 10,000 piles plan, and expect to expand our network to 1,000 ultra-fast charging stations by the end of 2024 and a total of 10,000 ultra-fast charging piles by 2026.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

在渠道服务方面。

[Translator]

Fourth, our channel service capabilities.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

截止今年5月底，ZEEKR在全球开设的门店达到了392家，其中在中国有380家。特别值得一提的是，聚合了体验、零售、交付、售后等全链路一站式服务体验的ZEEKR家的这种模式，已经开设了64家。ZEEKR家也极大地提升了我们在网络的形象和交付、售后的服务能力。ZEEKR家的充分发挥了ZEEKR体系化实力和传统汽车厂商的优势，带给了用户更完善的服务体验，也收获了用户口碑和用户的好评率。

[Translator]

By the end of this May, ZEEKR has established more than 392 ZEEKR retail stores worldwide, including 380 in China. Notably, we currently have 64 ZEEKR Homes, offering one-stop experiences ranging from test driving, sales, delivery, and after-sales services. It's a strategic move that will significantly bolster our brand influence and enhance our delivery and after-sales service capabilities. ZEEKR Homes significantly leverage ZEEKR's synergy strengths and its advantages in traditional vehicle sales network, empowering us to provide our customers with a seamless and superior one-stop experience. This approach has gained widespread acclaim in the market and high levels of customer satisfaction.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

今年我们又重点在三四线城市来加强集客空间等多样化的渠道建设，来进一步加强我们在各级市场的渠道布局，能实现渠道下沉，为品牌开拓更大的增长空间，来确保全年销量目标的达成。

[Translator]

As we progress through the remainder of this year, we will deepen our diversified channels expansion efforts, with a particular emphasis on expanding the reach of ZEEKR space in Tier 3 and Tier 4 cities. This will amplify our presence across different market segments, unlocking greater growth potential and helping us realize our full-year sales goal.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

在全球拓展方面。

[Translator]

Last but not least, global expansion.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

到5月底，我们已经进入了荷兰、瑞典、泰国、阿联酋、沙特等20+个国家和地区。ZEEKR 001、ZEEKR X率先也在欧洲开启交付。ZEEKR 009和ZEEKR X的右舵车型，我们也预计会在今年三季度在新加坡、中国的香港等右舵市场来开启交付，全面开拓全球的右舵市场。我们预计到今年年底，ZEEKR将会进入欧洲6-8个豪华车市场，6-8个豪华市场，以及东南亚、中东、拉美、澳洲等全球50+个国家和地区。

[Translator]

By the end of this May, we have established a presence in over 20 countries and regions, including the Netherlands, Sweden, Thailand, the UAE, and Saudi Arabia. Both the ZEEKR 001 and ZEEKR X have commenced deliveries in Europe. Furthermore, we plan to introduce right-hand drive versions of ZEEKR 009 and ZEEKR X in markets like Singapore and Hong Kong, China in the third quarter of this year, marking our entry into the global right-hand drive markets. By the end of this year, we plan to enter the luxury market of six to eight European countries, as well as markets in Southeast Asia, the Middle East, Latin America, and Australia, expanding our footprint to a total of 50 countries and regions worldwide.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

综上所述，上述的这些成就增强了我们的整体的竞争力，推动ZEEKR长期的可持续的增长和进步。同时，我们也得益于母公司吉利控股集团赋予的战略优势和深度的协同效应的助力，ZEEKR能够在全球格局中有效应地对可能出现的市场挑战。我们也将继续引领高端沉淀的技术突破与品类创新，来进一步巩固ZEEKR在行业中的领导地位。

[Translator]

In short, the aforementioned achievements have bolstered our overall competitiveness, propelling our sustainable long-term growth and progress. With the strategic advantages and synergies we derive from our parent company, the Geely Group, ZEEKR is well-positioned to effectively navigate the global landscape and address market challenges. We remain committed to pioneering cutting-edge electric vehicle technologies and driving product innovation, further solidifying our industry leadership.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

好的，接下来我把电话交给我们的CFO袁景，请他提供第一季度的一些财务细节。谢谢大家。

[Translator]

With that, I would hand over the call to our CFO, Mr. Jing Yuan, to review our first quarter financial details. Thank you.

[Jing Yuan, CFO at ZEEKR]

Thank you, Jason. Hello, everyone. Now, I will go through our key financial results for the first quarter of 2024. Due to time constraints, I will address our financial highlights here, and I will encourage you to refer to our earnings release for further detail. Our total revenues were RMB 14,736.8 million or $2,041 million in the first quarter of 2024, representing an increase of 71% for the fourth quarter of 2023 and a decrease of 9.9% from the fourth quarter of 2023. Our total revenues are comprised of three parts: vehicle sales, sales of batteries and other components, and sales of R&D services and other services. Revenues from vehicle sales were RMB 8,174.1 million or $1,132 million for the first quarter of 2024, representing an increase of 73% for the same period of 2023 and a decrease of 22.8% for the fourth quarter of 2023.

[Jing Yuan, CFO at ZEEKR]

The year-on-year increase was due to increased sales volume of ZEEKR vehicles. The Q-on-Q decrease was due to seasonality that impacted our delivery volumes, as well as a lower average selling price primarily caused by the change in our product mix. Revenue from sales of batteries and other components were RMB 6,318.5 million or $875.1 million for the first quarter of 2024, representing an increase of 82% for the same period of 2023 and an increase of 56.5% for the fourth quarter of 2023. The year-on-year and quarter-on-quarter increase were mainly attributable to the increased sales volumes of battery packs and electric drives, as well as the growth of battery components overseas.

[Jing Yuan, CFO at ZEEKR]

Revenues from research and development service and other services were RMB 244.1 million or $33.8 million for the first quarter of 2024, down by 42.4% for the same period of 2023 and a decrease of 85.9% for the fourth quarter of 2023. The year-on-year and quarter-on-quarter decreases were mainly due to the decreased sales of research and development services and outsourcing technologies to related parties. Gross margin overall was 11.8% for the first quarter of 2024, compared with 7.9% for the same period of 2023 and 14.2% for the fourth quarter of 2023. The year-on-year increase was mainly attributable to the increase in vehicle margin. The quarter-on-quarter decrease was mainly due to a decrease in vehicle margins, as well as an increase in the percentage of revenue from sales of batteries and other components, which had a lower gross margin than vehicle sales.

[Jing Yuan, CFO at ZEEKR]

If you look at my vehicle sales, vehicle margin was 14% for the first quarter of 2024, compared with 10.1% for the same period of 2023 and 15.3% for the fourth quarter of 2023. The year-over-year increase was primarily attributable to the procurement savings as the cost of autoparts and materials decreased. The quarter-over-quarter decrease was mainly due to the delivery of new vehicles models, as well as change in the product mix. R&D expenses were RMB 1,925.3 million or $266.6 million for the first quarter of 2024, representing an increase of RMB 6.7 million for the same period of 2023 and a decrease of 39.1% for the fourth quarter of 2023. The year-over-year increase was attributable to increased employee compensation as a result of a growing number of staff, as well as increased expenses to support our expanding product portfolios and intelligent technologies.

[Jing Yuan, CFO at ZEEKR]

The quarter-on-quarter decrease reflected fluctuations due to different design and development stages of our new products and technologies. SG&A expenses were RMB 1,951.5 million or $270.3 million for the first quarter of 2024, representing an increase of 51.9% for the same period of 2023 and a decrease of 11.6% for the fourth quarter of 2023. The year-on-year increase was due to increased employee compensation as a result of a growing number of staff, as well as increased marketing and promotional activities for ZEEKR vehicles in China and overseas, and an increase in rental and related expenses due to the expansion of our offline channel. The quarter-over-quarter decrease was mainly due to decreased marketing and promotional activities.

[Jing Yuan, CFO at ZEEKR]

Loss from operations were RMB 2,086.9 million or $289 million for the first quarter of 2024, representing a decrease of 11.2% for the same period of 2023 and a decrease of 29.3% for the fourth quarter of 2023. Net loss was RMB 2,022.1 million or $280.1 million for the first quarter of 2024, representing a decrease of 18% for the same period of 2023 and a decrease of 31.2% for the fourth quarter of 2023. Our balance of cash and cash equivalents and restricted cash were RMB 3,791.1 million or $525.1 million as of March 31, 2024. So that concludes our prepared remarks. Jason, I will now turn the call to you to start our Q&A session.

[Operator]

Thank you. 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're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we'll pause momentarily to assemble our roster. Also for the benefit of all participants on today's call, if you raise your question in Chinese, please immediately repeat your question in English. Our first question comes from Tina Hou from Goldman Sachs. Please go ahead.

[Tina Hou, VP and Head of China Autos Equity Research at Goldman Sachs]

感谢管理层的时间，也恭喜ZEEKR在IPO之后取得非常优秀的Q1的业绩。然后我这边有两个问题。第一个是看到今年其实前五个月我们的销量都在节节攀升。那最近从一些可能一线的渠道了解到，近期可能这个订单量有一些回落。所以想问一下在这个下半年，咱们有可能出一些什么样的这个销售政策来维持可能从6月份到12月份平均一个23,000的一个月交付量？这是第一个问题。那我先翻译一下。 Thanks, Management, for your time and congratulations on the very strong result after the first quarter after our IPO. So my first question is regarding our sales policy. Obviously, we've seen that in the first five months because volume delivery has been climbing month after month. But recently, we've been hearing from some channels that recent order momentum seems to be slowing down a little. So wondering what would be our sales policy into the second half of this year in order to maintain or reach our average 23,000 units per month annual target? Thanks.

[Jing Yuan, CFO at ZEEKR]

Thank you, China. This is Jing, and I will answer the first question. So if you look at the numbers, you probably recall that we launched our Double Seven in December last year and started delivering them on the first day of January. And we launched our all-new Double One on the 27th of February and delivered them on the first day of March. So as you can see, the two new vehicles did indeed contribute a lot in terms of the overall order momentum for my vehicles. If you look at my pipeline, we will continue to introduce more and more vehicles in the coming months. We have already announced the Double Nine Grand version on the 19th of April and started delivering them a few weeks ago. And also ZEEKR MIX, we have announced them in Beijing Auto Show.

[Jing Yuan, CFO at ZEEKR]

In the next few months, we will continue to launch, say, for example, all-new ZEEKR 001. We start delivering ZEEKR MIX, and we'll have this mid- to large-sized SUV that's going to be our key volume contributor in the second half and as well as next year. So when it comes to new products, we do think we have a very strong product portfolio to sustain this kind of order momentum. In addition to that, you probably realize that we will be continuing to push our international expansion by signing up more and more dealers in the Global International Market. You probably saw in the news that we have signed up dealers in Mexico and rest of the world quite aggressively.

[Jing Yuan, CFO at ZEEKR]

By the end of this year, we hope we're going to sign up more than 58 sign-up dealers covering more than 58 countries and regions. Export is also going to be one of the contributors for me to reach my overall sales for this year.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

再补充一点，就是这个袁景你说的，就是我们也刚才讲到加快在布局三四线市场的渠道建设。我想这个又是市场下沉。我相信这对于我们的销量下部销量带来比较好的帮助。

[Translator]

One more point from Andy. We are accelerating our channel expansion in the Tier 3 to Tier 4 cities in order to expand our presence in more segments that would be helpful to our future order intake.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

好，谢谢。

[Translator]

Thank you.

[Tina Hou, VP and Head of China Autos Equity Research at Goldman Sachs]

好的，感谢安总和袁总。Thank you very much, Management. 那我第二个问题是关于我们的这个销售和研发费用。然后首先销售这边想要了解一下咱们今年全年希望增加多少个门店总共。然后这个研发费用这一块的话，因为现在越来越多的研发投入在软件上面，所以想要问一下这个中长期来看，咱们觉得研发费用维持在什么样的一个水平是比较合适的，然后可以保持我们在整个行业里面的竞争力。So my second question is regarding operating expenses. So first of all, in terms of SG&A, just wondering how many stores are we planning to add in total for 2024? And then the second question regarding R&D expenses. So what kind of sustainable level do you see the R&D expenses at in the mid to longer term in order to maintain our technology competitiveness in the industry, especially given nowadays more and more R&Ds are going into software development? Thank you.

[Jing Yuan, CFO at ZEEKR]

Thank you, Tina. So as you probably see, by the end of 2023, so last year, we have set up 342 customer touchpoints, including ZEEKR Center, ZEEKR Spaces, ZEEKR Houses, ZEEKR Homes, and delivery centers. By the end of the year, we're looking at more than 520. So we will probably not increase the number of ZEEKR Centers because we think we have pretty much covered all Tier 1 cities in China. But we're going to expand to, as Andy just mentioned, more Tier 3, Tier 4 cities. We're going to further improve the efficiencies of my old ZEEKR Spaces as I have more and more vehicle lineup. I have more and more brand influences, so I can probably get a better space in shopping malls and in other places. And I will expand the number of ZEEKR Homes. That is my channel expansion plan for this year.

[Jing Yuan, CFO at ZEEKR]

As you mentioned, for the R&D, last year my R&D is around RMB 8 billion. In this year, we would increase the R&D spending. As you mentioned, some of the R&D spending will go to software development, especially if you take into consideration my ADAS advancements as well as the Smart Cockpit full in-house stack self-development. Also, if you look at my new vehicles, you probably see from your last question that we're going to introduce a fairly large number of new vehicles in a very short time frame. We'll spend a little bit more on that as well. Overall, we'll be looking at anywhere around RMB 10 billion R&D expenses for this year.

[Jing Yuan, CFO at ZEEKR]

But obviously, the exact number, we're still looking very, very closely, let me put it that way, at how we spend this amount and whether we can be more efficient in terms of especially vehicle development and software development.

[Tina Hou, VP and Head of China Autos Equity Research at Goldman Sachs]

好的，感谢袁总。 Thank you.

[Jing Yuan, CFO at ZEEKR]

Thank you. Operator, let's go to the next question.

[Operator]

Next question comes from Tim Hsiao from Morgan Stanley. Please go ahead.

[Tim Hsiao, VP and Equity Research Analyst at Morgan Stanley]

感谢安总和袁总接受我的提问，也恭喜上市后的第一个业绩表现十分的亮眼。那我有两个问题都是跟产品相关的。第一个问题是有关于插混，因为我们看到了今年以来整个插混市场需求十分的强劲。所以也想了解一下ZEEKR除了纯电车型之外，会不会在将来一个适当的时间也考虑探索这个插混车型的一个机会来扩大客群。那如果会的话，ZEEKR将如何明确的区分这个插混纯电的一个定位，并与控股集团内其他子品牌或者是市场其他新型的竞品车型有效的差异化来迎合不同的客群。 I have two questions. Both are related to the product. The first question is about PHEV because we noticed that the demand of a PHEV in China surprised on the upside over the past few quarters. Was ZEEKR at a certain point of time considered to further enrich its product portfolio by adding PHEV or other type of powertrain on top of the current pure EV offering? If so, how will ZEEKR clearly differentiate the product proposition of its PHEV or BEV from existing product in the market and to effectively differentiate from peers or sister companies in the group? That's my first question.

[Jing Yuan, CFO at ZEEKR]

Thank you. Thank you, Tim, very much. So to answer your first question, firstly, at ZEEKR at this moment, we continue to focus very precisely into premium battery-powered electronic vehicles. We do think there's a very large untapped market, very large untapped customer demand with regarding to premium BEVs. If you look at some of my competitors, say, Mercedes C-Class, BMW 3 Series, Audi A4, they continue to sell tens of thousands of vehicles a month. And those markets, we do think, still can be obtained by brands like us. In addition to that, if you look at not only ZEEKR, but Geely Holding Group as a whole, you probably realize that within the whole Geely Group, we do have powertrains of different variants. And we do have the technology in terms of how to leverage them and provide with our customers different types of drivetrains.

[Jing Yuan, CFO at ZEEKR]

As I mentioned in the very beginning, at this moment, we'll continue to focus on BEVs, and we want to get 100% comfortable with our position in the BEV sector, 100% comfortable in our leading positions before we think about other options.

[Tim Hsiao, VP and Equity Research Analyst at Morgan Stanley]

好，感谢袁总。那我第二个问题是有关于今年年底的产品和新品。因为刚才安总也提到了，我们在年底会推出中型SUV，所以也想了解一下管理层对于首款的SUV的销量、月销量、利润有什么样的一个预期，如果对标目前001和007的一个水平。那另外一方面，因为我们也看到了现在市场里面SUV的区间已经白热化，竞争已经白热化。所以ZEEKR的首款SUV与比如说像特斯拉的改款之后的Model Y和其他这些自主品牌下一代的SUV相比，管理层认为最大的亮点和差异化为何？ My second question is about new models because according to the management, ZEEKR will launch the mid-size SUV by the end of this year. What's management's expectation for the scale of monthly sales and the margin of the first SUV model versus the existing 001 and 007? Despite a more sizable addressable user base, SUV market has been pretty crowded in China. So how do you think about ZEEKR's first SUV could effectively differentiate from peers' upcoming models, for example, like Tesla Model Y and the new models from other local brands? That's my second question. Thank you.

[Jing Yuan, CFO at ZEEKR]

Sure. Thank you, Tim. So if you look at the overall competition, as Andy mentioned earlier in his beginning remarks, that you can see my Double One and Double Nine, sorry, my Double One and Double Seven are market leaders in their respective market segments. And you probably remember last December when we had these discussions about the all-new Double Sevens. There's competition in the market with regard to mid- to large-sized BEV sedans in the premium brackets and price brackets. And I think we have demonstrated our ability to define a product and find a selling point for our customers to actually choose those particular vehicles. And we have demonstrated with Double One, we have demonstrated with Double Seven.

[Jing Yuan, CFO at ZEEKR]

If you look at the overall vehicle history and how we do this, you probably can see that we started from a very clear advantage that is our hardware and chassis. The safety of the vehicle, the handling, the drive ranges, the EV powertrain, etc., etc. It's been very good. It's been well recognized by our customers. And then we gradually step up in terms of software. We spend a lot of investments in smart cockpits. We spend a lot of investments in ADAS. We use our own in-house full-stack in-house solutions when it comes to ADAS. So step by step, some of our customers who hesitate to make the decision just because they see a lack in terms of the smart experience and intelligent experience, they were convinced. They were convinced they're buying a better and better product.

[Jing Yuan, CFO at ZEEKR]

So then a similar story with ZEEKR 001, similar story with ZEEKR 007. And we do think we will be leveraged on the very successful SEA architecture hardware, the handling, the safety, etc., etc., when it comes to the all-new SUVs we're going to introduce in the latter half of this year. But on top of that, our latest smart cockpit systems, our latest ADAS systems, all those smart functionalities that we've been improving in the last few years is also going to be a very, very big and important differentiator in our vehicles when our customers are looking at my models comparing with the rest of the pack. If you look at my competitors' lineup, you have Li Auto, which is not exactly priced at the same price bracket with us. XPeng, they do not have SUV offerings for the latter half this year.

[Jing Yuan, CFO at ZEEKR]

Some of my other competitors, they may have some offerings, but some of their refinements have been proven not up to the needs and wants of these Chinese customers. Although they may receive better responses, feedback from the international market, but if you look at the Chinese customers, their needs and wants are quite different from the rest of the world. And we do believe when it comes to the Chinese market, when it comes to this specific product, we will be at the edge.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

我做点补充吧。今年下半年推出了两款全新的车型的话，一款是豪华的中大型SUV，车长预计这是因为我们到时候以正式的发布为准，在5米左右，5米上下。这个西风市场实际上现在来看，这个希望是比较大的。同时对未来的判断还是会增长。我也相信ZEEKR这款中大型SUV上市以后，对ZEEKR的销量以及毛利率来说都有比较好的帮助。这是一款中大型SUV。还有一款MIX这款车，这款车是极具有颠覆性和创新性的一款产品。产品的情况大家在车展和相关的一些资料中可能可以看到。这款车又是代表了ZEEKR在品类创新方面的又一款杰作，打造未来的家。

[Translator]

I would like to make additional points. First of all, in the second half of this year, we plan to launch two completely new models. The first one is a premium mid- to large-sized SUV. The length of the vehicle is expected to be around five meters. This is a very big market, very big segment, and we expect that this segment will continue to grow in the future. After we launch the vehicle, we expect that it would have a positive contribution to our sales and our gross margin. Our second model to be launched later this year is ZEEKR MIX. This is a highly innovative, highly disruptive model, the information of which you might have already read from the press and from the report from the auto show. This is a highly innovative masterpiece, and with this vehicle, we defined what the future home would look like.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

我们ZEEKR一定靠的是技术创新、品类创新来赢得ZEEKR品牌的市场的竞争，形成我们的竞争力。

[Translator]

So ZEEKR brand is always strived to be innovative in technologies and to create new products, new types of products, to gain our core corporate competitiveness.

[An Conghui, Director, Co-Founder, and CEO at ZEEKR]

好，谢谢。这就是两款新车的情况。

[Translator]

So these are some of the information about the new models we plan to launch this year.

[Tim Hsiao, VP and Equity Research Analyst at Morgan Stanley]

感谢安总，感谢袁总，再次恭喜，谢谢。

[Jing Yuan, CFO at ZEEKR]

谢谢, Thank you, Tim, and let's go to the next question.

[Operator]

Next question comes from Ming-Hsun Lee from Bank of America. Please go ahead.

[Ming-Hsun Lee, Managing Director and Head of Greater China Auto Research at Bank of America]

好，谢谢安总跟袁总。那我这边下面也是两个问题。那第一个问题是关于近期大家比较关注的就是欧盟可能会提高中国这边的新能源车的一个进口的关税。那因为刚才安总也提到我们其实下半年会进入更多欧盟地区的国家。那想了解一下公司目前有没有一个预期，就是如果假设欧盟它的关税从现在的10%调到比如说20%或25%的话，那公司这边的一个应对策略，那比如说我们是市占优先还是利润优先，那我们跟当地的合作伙伴还有消费者的话，大概会是怎么样的一个去分摊关税提高的一个情况。那我这边也翻译一下英文。So recently, I think a market is waiting for EU to decide the latest tariff rate. And since An Zong just mentioned you have more plan to enter more countries in EU, so what is your priority for your business? Will you prioritize profitability in local market, or will you prioritize the market share gain in the local market? Thank you.

[Jing Yuan, CFO at ZEEKR]

Thank you, Ming. Maybe I'll address it first, and if Andy has any further comments, then he may follow up. But firstly, and most importantly, we cannot comment on any government's policies, and we've been waiting for the European Commission to make the decisions, and we'll adjust our policies as we see fit. But again, we will be in compliance with all relevant laws and regulations in all jurisdictions we operate in. If you look at European markets, obviously, we do have a very big international expansion ambition for this year. But as I previously communicated with some of you, the key markets for us are going to be Latin America, Southeast Asia, as well as the Middle East.

[Jing Yuan, CFO at ZEEKR]

So although we have been expanding in Europe, we do think it may take some time for the actual sales in Europe to be ramping up in a very significant way. And not that we're not investing in these jurisdictions, but we do think it may take some time. But more importantly, if you look at the product, we do think the product we've been offering in the European Union, the ZEEKR 001 and ZEEKR X, are suitable for the needs and wants of local customers. We're not just selling Europe, the run-of-the-mill SUVs and sedans that sell good in China. If you look at ZEEKR 001, it's a crossover shooting brake, very suitable for places like Scandinavian countries and Germany, etc., etc., where people drive station wagons.

[Jing Yuan, CFO at ZEEKR]

If you look at ZEEKR X, a small, compact, very nimble, and flexible city SUV, perfectly suitable for South France, Spain, Italy, those markets. So we do think if you look at the products, we are offering a value-added comparing product, which in turn, hopefully, will give us a little bit of edge in terms of pricing, in terms of competition. And then lastly, but also very, very importantly, if you look at my business model and the overall Geely Group's global manufacturing footprint, you probably realize that we do have a more flexible localization options comparing with most of my competitors. If you look at my business model, you probably know that we do 100% counter-manufacturing. That means I can leverage all of Geely Group's global manufacturing footprint.

[Jing Yuan, CFO at ZEEKR]

If you look at Geely Group, obviously, we do not only have manufacturing facilities in China, but also in Southeast Asia, in Western Europe, as well as in the U.S., I'm sure. So those flexibilities provided by my business model, by my being part of the very big and successful global Geely Group, I think give us a flexibility that is almost unparalleled in the Chinese EV industry. Okay, maybe next question. 谢谢。

[Ming-Hsun Lee, Managing Director and Head of Greater China Auto Research at Bank of America]

那我另外还有一个问题是，就是我们这个上市之后有没有全年的一个最新的费用率，包括这个 sales and marketing，然后还有之前指引过这个 R&D，今年之前的指引是100个亿，然后还有这个资本开支的这几个最新的一个指引。那我也翻译一下。 So do you have the latest update and the guidance regarding your sales and marketing expense, R&D expense, and also your CapEx? Thank you.

[Jing Yuan, CFO at ZEEKR]

Thank you, Ming. So as you're probably aware, being a public company, I'm sort of constrained in terms of what type of guidance I can give. Earlier, we do give a guidance of around maybe RMB 10 billion in terms of R&D. When it comes to SG&A, obviously, that is driven by my sales. And what I can tell you is that I will have a much better SG&A discipline in terms of SG&A percentage to my overall sales revenue. That is going to be definitely better than most, if not all, of my competitors at comparable revenue size. But it's very unfortunate I can't give you a very precise SG&A guidance. When it comes to CapEx, as you can see, we are running a very asset-light model in the sense that we do not have our own vehicle manufacturing facility.

[Jing Yuan, CFO at ZEEKR]

So my overall CapEx is actually quite controllable. If you look at my numbers, last year, I spent about RMB 1.9 billion in terms of CapEx. I will be looking at a similar, if not a slightly higher number of CapEx for this year as well.

[Ming-Hsun Lee, Managing Director and Head of Greater China Auto Research at Bank of America]

Yeah, that's all my questions. Thank you, Andy.

[Jing Yuan, CFO at ZEEKR]

Thank you. Thank you. So operator, I think it's probably time for us to conclude this meeting.

[Operator]

All right. I would like to turn the conference back over to Mr. Jing Yuan for any additional or closing comments.

[Jing Yuan, CFO at ZEEKR]

Thank you. Thank you, Jason. This is Jing. Everyone, thank you once again for joining us today. It's very unfortunate that we have to conclude the meeting now. Understand there may be more questions from attendees in this meeting. Please feel free to contact either our team or my TPG, my finance PR company for any questions. Thank you very much for joining and have a nice day. Goodbye.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Analysts

• An Conghui, Director, Co-Founder, and CEO at ZEEKR
• Jing Yuan, CFO at ZEEKR
• Ming-Hsun Lee, Managing Director and Head of Greater China Auto Research at Bank of America
• Tim Hsiao, VP and Equity Research Analyst at Morgan Stanley
• Tina Hou, VP and Head of China Autos Equity Research at Goldman Sachs
• Translator