Lotus Technology Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 28, 2024

There are 6 speakers on the call.

Operator

Good day

Speaker 1

and thank you for standing by. Welcome to the Floten Technology, Inc. First Half twenty twenty four 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.

Speaker 1

Please be advised that today's conference is being recorded. I would now like to hand the call over to your host today, Ms. Debbie Zhang from the company.

Speaker 2

Thank you, Desmond. Good morning, good afternoon and good evening, everyone. Thank you for joining LOTUS Tech's second quarter and the first half twenty twenty four earnings call. I'm Debbie Zhang, the Head of IRR at LOTUS Tech. I'm honored to introduce company management with us today, CEO, Jingfeng Feng and CFO, Alex Xie.

Speaker 2

On today's call, we'll start with the prepared remarks from CFO, Alex Xiefst and CEO, Mr. Feng, will join for QA. 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. Private Securities Litigation Reform Act of 1995.

Speaker 2

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 included in relevant filings of the MultiStax with the U. S. Securities and Exchange Commission.

Speaker 2

The company undertakes no obligation to update any forward looking statements except as required and applicable law. Please also be noted that our earnings press release and this conference call will include disclosure of unaudited 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. Group/lodas.com. With that, I'd like to turn the call over to our CFO, Alexis, please.

Speaker 3

Thank you, Demi. Good morning, good afternoon, good evening to everyone for your attendance today. My name is Alexis Li, and I'm the CFO of Lotus Tech Inc. Now let me go to the slides please. Thank you.

Speaker 3

I want to begin by saying the company delivered approximately 4,900 units of vehicles and achieved total revenue of $398,000,000 in the past, of which both are record first half year numbers in the 76 years of the Lotus history. Just under 2,700 units were delivered in the 2nd quarter, up 128% year over year and 22% quarter on quarter. If you look at our center, you will see that 2nd quarter sales revenue was about $225,000,000 up 103% year on year and 30% Q on Q. Most notable is the new revenue stream from ADAS technology related income, which is very high margin. Besides Lotus models, other reputable brands of passenger and commercial vehicles will be rolling with our in house developed ADAS across the board.

Speaker 3

To your right hand side, you will see that gross profit margin was 13% in the first half, a step up versus the 5% achieved in first half twenty twenty three. But this number is lower than the 15% by the end of last year. To quantify the decline, it was mainly due to the inflationary impact to the cost of Imira Sports Car. Notable growth comes from gross margin of service revenue, which was about 58% in the first half of this year versus 16% same period last year. This is mainly contributed by ADAS related revenue.

Speaker 3

Next slide please. To your left, you will see that our EVs, which is mainly electric, SUV model and partly EMEA, the GT Sedan model, contributes approximately 50% of total volume, while the Imira sports cars sales contributes the remaining. Demand for Imira R sports car in the U. S. Market is strong, given well established sales network and brand recognition.

Speaker 3

The chart in the middle and the right shows a very balanced vehicle delivery and the retail network distribution across the world. Europe, including UK, is home base and remains the biggest contributor to volume and revenue given our British heritage. China is new market to Lotus and contribution expanded from 1% in 2018 to 25% of total vehicle delivery and retail stores after 6 years of continuous investments and efforts. Contributions from the rest of the world is trending up from recent deliveries of electric SUV model in many new markets. And new production orders for the Q3 delivery is likely to further increase its weightage contribution.

Speaker 3

Next slide please. In terms of global distribution, China is the only market operator under direct customer model, while others operate through retailers and wholesalers, many with long standing relationships with the company. The U. S. Market remains as the key market for heritage sports cars.

Speaker 3

Given the trade uncertainties, the company will target the ultra luxury segment with limited editions and performance variance EV models for brand positioning and profitability. Europe, including UK, is home base and through our arrangements more than 300,000 charging stations are now accessible for Lotus drivers to charge the vehicles. Given that Lotus is early mover in electrification, ESG sensitive conglomerate for fleet purchase of luxury courtesy cars, a potential growth opportunity for the company. China is new market to Lotus and the only market operated under direct to customer model. Contributions in terms of volume and revenue exceeded 25% after 6 years of intense investments.

Speaker 3

CapEx cycle already kicked out and through strategic partnership with NIO, Lotus drivers can assess 23,000 chargers across China, of which some of them are fully robotics. 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 asset light with very fast growing Generation X customers for growth. The market is also least impacted by any trade uncertainties.

Operator

Turning

Speaker 3

to our financial highlights. Total revenue for the first half was $308,000,000 a 2 0 6 percent year over year increase. Sales of goods was $383,000,000 a 2 0 7 percent year over year increase. Sales revenue was $15,000,000 a 104% year over year increase. Gross margin for the first half was 13% versus 5% in the first half last year.

Speaker 3

Gross margin of sales of goods was 11% versus 4% first half last year. Gross margin of service revenue was 58% versus 16% in the same period last year. Operating loss was 438,000,000 dollars for first half this year, 27% year over year increase. Net loss was $460,000,000 Excluding share based compensation and expenses, adjusted net loss non GAAP was $424,000,000 a 20 percent year over year increase. Adjusted EBITDA loss non GAAP was $382,000,000 15% year over year increase.

Speaker 3

To the right hand side is the quarterly numbers. Total deliveries was 2,679 units, 128% year over year increase. Total revenue was $225,000,000 100 and 3 percent year over year increase. Gross margin was 9% versus 5% same period last year. Net loss was $202,000,000 dollars a 4% year over year increase.

Speaker 3

Now excluding share based compensation expenses and adjusted net loss, non GAAP was just $201,000,000 Adjusted EBITDA loss non GAAP was $177,000,000 a 1% year over year decline. Next slide please. In the 1st 6 months of this year, Lotus is the fastest growing British luxury heritage brand, with deliveries just behind Bentley and ahead of Rolls Royce, Aston Martin and Lexus McLaren. This is mainly driven by 4 models in delivery and include our electric SUV model, our Imira sports car model, our EMEA GT Sedan model and EVA, our Hello sports car hypercar. Despite faster than segment and industry growth, we kept our ASP above US100000 dollars per unit to protect our pricing integrity and brand equity value.

Speaker 3

We not only launched the bespoke Chapman bespoke services, which offers personalization and customization services to our customers, but also began the production of the one off EVIA FITIPALDI model and the delivery of the EMEA Blossom limited edition model. Both electric SUV model and the EMEA GT Sedan model won the Red Dot Awards for Product Design and other achievements to add to the model's desirability with our customers. Business sustainability wise, the company was nominated as the finalist in the Reuters Sustainability Award 2024 in 2 categories. Number 1 for business transformation and number 2 for operations transformation. Last but not least, our wholly owned subsidiary Lotus Robotics started to capitalize on years of investments by providing end to end intelligent driving solutions and R and D services to multiple leading OEMs.

Speaker 3

Next slide please. Besides embracing on electrification, Lotus is also the pioneer among traditional luxury OEMs to spearhead into digitalization and smartification. While we understand the fun in driving any past and present Lotus models, we also want to incept the right level of technologies to enhance roading safety for our drivers and their passengers, the riders. As flagged previously, our customers can opt for Level 4 ADAS hardware on their new orders of electric SUV model and the EMEA GT Sedan model. With that, they can subscribe to highway NOA or the urban NOA to enjoy the ride after tedious day.

Speaker 3

More importantly, program updates are done through OTA and they are hassle free. As announced recently, our wholly owned subsidiary, the Lotus Robotics started to deliver end to end intelligent driving solutions and R and D services to leading OEMs. For both the passenger vehicles and commercial vehicles segment, such as the heavy duty trucks for interstate logistics and vans for intra city dispatch services. Sales revenue from this high margin business was slightly more than US10 $1,000,000 in the first half this year and is likely to fall between US30 $1,000,000 to US50 $1,000,000 for this year. Future growth of our business will be driven by income from more paid subscriptions of our ADAS across the world.

Speaker 3

We value next slide please. We value our product drivers brand mission and put them into action. We not only launched the Chapman Bespoke in the Q1, which offers personalization and customization services, but also began the production of the pinkish EMEA Blossom limited edition model. This collection features rare gradient painting and 42 natural sapphires on the instrumental panel, which gotten a lot of attention from our customers. We also began the production of the 1 off EVIA Fittipaldi model to celebrate race legend, Emerson Fittipaldi's 50 years of achievement and hope to reconnect the F1 passion with tens of millions of fans across the world.

Speaker 3

Next slide, please. Coming to our guidance. We revised our FY 2024 full year guidance delivery target to 12,000 units to reflect the latest assessments of the market conditions and trade uncertainties posed by the new tariffs in the U. S. And the EU region.

Speaker 3

Our latest target pointed to more than 70% year over year growth, making Lotus potentially the fastest growing heritage luxury car brand in the market. We aim for 3000 to 4000 units of quarterly deliveries in the second half of this year, a step up versus the 2,200 and the 2,700 units achieved for Q1 and Q2 respectively. This said, the company will keep price discipline to protect our brand equity value and desirability. More importantly, the resale value of our past and present models and to ensure quality customer experiences. We are also in the process of recalibrating our product strategy to explore ways for faster and easier go to market globally, which we will share more details later.

Speaker 3

To your left, our recent updates on our model delivery. Most notable is the up and coming delivery to the GCC region, which used to be one of the most popular destination given our F1 heritage and racing DNA. Our customers from key markets such as Korea and Japan should also receive their electric SUV model in Q3 this year, while others can make reservations for the EMEA GT Sedan model. Next slide please. Management team initiated on the Win 26 plan, which targets positive operating cash flow and EBITDA in 2026.

Speaker 3

The plan includes more than 30,000 units of annual deliveries in 2026 with more than 20% gross profit margin. In order to achieve this target of better profitability and stronger balance sheets, The company will not only adopt price discipline, but also increase blended ASPs through mix of more limited edition models and bespoke services. Given the maturity of our ADAS, our AI, our SaaS business, our Lotus Robotics subsidiary will undertake more high margin IP licensing and R and D services. Given the number of OEMs we partner and their model launch plan, the number of cars equipped for ADAS are expected to more than double every year. As the cars pools expense, the higher pickup rate of paid subscription for our ADAS means potentially more income for the company.

Speaker 3

Coming back to the operations side, streamlining for better efficiencies will support our cost measures, especially through waste reduction to generate profitability. Achieving our Win 26 is the base case for the company and the management to deliver our commitments, such as dividend payouts to our shareholders and investors. Next slide please. Coming back to our product pipeline, it's important to flag that 4 models are currently available. 2 more models will be launched in 2025 and 2026 respectively.

Speaker 3

These models will begin delivery in 2026 and 2027 respectively from PRC to UK, EU to rest of the world then followed by the U. S. The plan is to work our global retail network for our customers to test drive after the launch and to make reservations for future deliveries. To your right is the progressive volume expansion of which the yellow highlight marks 100% availability. Both models of sports car, EVIA and the EMURA are available in 100% of the markets today.

Speaker 3

Only 80% of the markets will be able to receive their electric SUV deliveries this year, while 50% of the markets will receive their EMEA GTC DUN deliveries this year. This said, 100% of the markets will receive the electric SUV model by 2025 and 100% will receive the EMEA GDCIDA model by 2026, instrumental to our achievements of the Win 26 plan. The 2 new models will start to contribute in FY 'twenty six revenue, but they will be major contributors to the company's profitability and growth towards our 80th anniversary in 20 28. Next slide please. Vision 80 starts from 2018 till 2028.

Speaker 3

And by then, management's view is for 4% market share in the Luxury segment, which is priced above US80 $1,000 per unit. This is done through product lineup expansion from previously a niche sports car segment player to the full range of SUV, GT, Sedan models. Revenue profile will expand from just traditional car sales, new and used options, aftermarket through new high revenue, high margin revenue streams such as technology IP licensing, ADAS solutions, Chapman bespoke customizations, charging services and potentially in car purchases through our operating system OS. The company aims for 30% gross margin and targets more than 10% EBITDA margin. Management team is committed to the growth and plan to deliver cash and profits to our shareholders.

Speaker 3

Thank you for staying with me, and we appreciate your attendance today. We look to deliver our cost to Lotus drivers and dividends to our shareholders. I'll pass it over to Danny to close the Q and A session. Thank you.

Speaker 2

Thank you, Alexis. Operator, we're ready for Q and A.

Speaker 3

Thank you,

Speaker 1

management. Your first question comes from the line of Edison Yu of Deutsche Bank. Please go ahead.

Speaker 4

Hi. Thank you for taking our questions. I have quite a few. Wanted to start on the guidance, the volume guidance. How much would you say of the reduction is related to tariffs and how much is related to other factors?

Operator

Hello. Mr. Phung, CEO of Lotus, would answer this question. Based on the original plan, the U. S.

Operator

Sales is 100% related to the tariff hikes of the U. S. Market and for the EU market, about 30% of our sales is related to the tariff hikes. And because of the tariff policies from the U. S.

Operator

Market, it dramatically affects our sales forecast. And we are now planning to have repositioning of our product in the U. S. Market. Next month in September, we are planning on launch of our Eletra in the U.

Operator

S. Market. And for such launch, the product will have a slight contribute to 2024 cells and more of the contribution will come in 2025. After the launch event in September in the U. S, Eletra will arrive at the or will enter the U.

Operator

S. Market as of the end of this year or roughly as of the end of December and the products will contribute our 2025 performance mainly. For Europe, we are also contemplate to relaunch or reposition our product in quarter 4. Specifically in Europe, we are thinking about to plan to launch different variants in this particular market. Besides that, there were also other elements affecting luxury premium vehicle segment.

Operator

For example, in China, in the luxury vehicle segment, it has been affected by 50% downwards, but for Lotus, we maintained our growth momentum. However, it does not necessarily mean that it's a tally of our expectation.

Speaker 5

Yes. Thank you.

Speaker 4

Sorry, keep going. So follow-up to that, I noticed in the press release, you mentioned that the company mentioned that the average selling price still is above $100,000 But can you just remind us the sort of accounting behind that? Because obviously, if you just take the automotive revenue and divide it by the units, it's not over $100,000 So can you just minus the mechanics behind the ASP again?

Speaker 3

Yes. Thank you. So this is on the accounting side because on the U. S. Side, all the IMeras is actually accounted for with our gross margin rather than the full ASP of the gross.

Speaker 3

So as we said there, we want to make sure the market is clear that the company is protecting the price integrity and not involve itself with discounting measures the market that will be detrimental to the brand equity value and the broader resale resaleability of the market, yes. But from accounting side, yes, we do not we treat it in a way whereby the U. S. Sales is only on the margin side rather than is the full car sales revenue.

Speaker 4

Got you. On the service revenue, I know it was a bit had gone down a bit sequentially quarter over quarter. How do we think about the service revenue for the rest of this year? And I think you had mentioned that longer term, it should be what $30,000,000 $50,000,000 from A and S?

Operator

Because currently in the luxury premium EV segment, particularly, we are facing or encountering headwinds. So we have to find the 2nd or the 3rd channel to help us boost their revenues. For example, we have launched our Chapman bespoke services and the different models to the China market first like EMEA Blossom and also our EVA visibility version. There have been a draw interest from customers from China, APAC and the U. S.

Operator

And currently we are planning to cover those three markets first. During the Elektra launch event in the U. S. We are currently planning, we will also in parallel launch our bespoke service there. Although such models or variants of bespoke service want to give us a huge boost in sales volume, it will give us strong momentum when it comes to gross margin.

Operator

Another revenue stream I want to elaborate on is our ADAS or intelligent driving services. As we all know that Lotus Engineering had a long experiences of offering services globally and they have a great caliber in chassis tuning and lightweight calibration. And currently, we are developing another revenue stream through intelligence driving solutions. At the end of this year, we project the revenue from this stream is roughly around RMB 400,000,000 and it is a business that can give us a greater gross margin. In China, we all know that in this particular area that our fierce competition for Lotus, we are unique as we can offer this solution globally.

Operator

Our solution can not only cover China market, but also Europe, Middle East and APAC, and we have already gained a lot of interest from other OEMs. Besides offering intelligence driving services internally within Geely Holding Group such as Verizon Commercial Vehicle and also Lincoln Cozy 10 vehicle, we are also offering services to non Geely brands in EU particularly. Currently, we have already acquired a nomination of 3 models from 1 of renowned OEMs in Europe and there are 4 models by applying this intelligent driving solutions ongoing. And I believe this is the unique address for Lotus. We can offer 1 intelligent driving solutions to cover global markets.

Operator

This year, again, as I previously mentioned, we project a RMB 400,000,000 revenue next year and the year after next year. We believe the revenue will keep growing, and this is another important revenue channel that we are currently exploring. And we will disclose more information regarding the nomination or the collaboration with the particular OEM from the Europe. For our intelligence driving solutions, we believe we are very competitive in 3 markets, including the U. S, Europe and Japan.

Operator

And those are 3 markets will be our current focus and we will keep explore any potential opportunities with OEMs in those three markets. At this moment, we are carrying out to test the driving and riding experiences of our intelligent driving solutions in Frankfurt. A lot of OEMs actually have participated, including Hyundai, Mercedes Benz, Aston Martin and Volvo. More OEMs will join this 15 day tester driving and tester riding experiences. So in summary, non China market will give Lotus and its intelligence driving solutions edges.

Operator

And those 2 are extra revenue streams I'd like to share with you. Thank you.

Speaker 4

That's a great and very comprehensive overview. Quick follow-up on that specific point. How are we thinking about the economics? Is it unit based? Is it licensing?

Speaker 4

How does the 400,000,000 relate to the number of cars those customers would sell?

Operator

In summary, it will be 50% of development payments and also 50% through per vehicle licensing cost. To take a V10 model from LinkCo as an example, we have already started to collapse the development cost and we have already provided the support of intelligence driving solutions to freeways in China. And by the end of this year, we are going to cover more cities to about 100 cities and offer NOA capabilities on the vehicle. So development payment and also licensing payment per vehicle would be our common proposal to all OEMs. And for different we will also be flexible with our strategies for Z10 in the future they may have a loss of sales volume.

Operator

So when it comes to development cost or development payment, it is relatively less compared with the licensing per vehicle. And for commercial vehicles, the development payment or the quotation is relatively higher compared with the licensing per vehicle cost. Currently, within Jullio Holding Group, besides the Z10 that I previously mentioned, we have also acquired the nomination for other 3 models and also won extra potential nomination or collaborative opportunities with a new brand called Galaxy under Jilin Holdings. But for sure, we are not solely relying on Geely Business. While our target is started by 2027, the revenue brought by intelligence Driving will from non Geely side accounted for 70%.

Operator

Yes.

Speaker 5

Thank you.

Speaker 1

Thank you for the questions. Our next question comes from Lin Zhou from UE Capital. Please ask your question.

Speaker 2

Hi.

Operator

So the question is, for those intelligent driving solutions that we offered for Lotus and also other OEMs, is there any differences? And Mr. Fong Zhang says that the software is actually the same. They are based on the one same model, the difference is on the hardware. But we let the intelligence driving hardware will be adaptive to different OEMs.

Operator

For example, for Lotus ourselves, we are leveraging 2 ORIN chips and 4 LIDAR and for our solutions to Z10, we are using 1 ORIN chip and 1 LIDAR. So we have 3 different levels of solutions from high, medium to low. And based on those solutions, they can be adaptive to ORIN, X, Y and N. In addition to that, we have also come up with solutions that can be adaptive to Qualcomm solutions. The question is for Lotus owners or customers, what's the demand and how is the take rate for ADAS functional intelligence driving solutions?

Operator

And Mr. Fonze's answer is that for And I can elaborate with a specific number for ADAS ranking currently on our latest app that you can categorize based on the range of ADAS and also based on the monthly data. And currently, what I can see on this app is that there's a intelligence driving solutions used by one of our customers with no human interruptions for 533 kilometers. In other words, you charge the vehicle once and you don't have to interrupt it under the vehicle run by itself for 533 kilometers.

Speaker 3

I'll just add a little translation on that. Actually, what Mr. Feng mentioned was the non intervention mileage maximum was 533 kilometers. Yes, for one of the customers, 533 kilometers for single trip, non intervention distance.

Operator

And we believe that such a performance will be the benchmark whether in China and other markets. Well, the question is from the previous presentation. We know that latest projection of ADAS revenue this year is roughly RMB400 1,000,000. What's the long term ambition for gross margin and its revenue? And Mr.

Operator

Fernandez says that in the future, the gross margin is expected at 60%.

Speaker 1

Thank you for the questions. One moment for the next question. Next question comes from Royce Young from Morgan Stanley Investment Management China. Please go ahead.

Speaker 5

Hi. Thank you for taking my question and congrats on all successful delivering this year. And my question is about stock trading. I have noticed that trading volume has been relatively low ever since the company's lifting. And I was wondering if there's any actions going to be taken regarding this liquidity issue.

Speaker 5

And what are the capital needs to fix this problem regarding this liquidity issue? Yes, that's my only question. Thank you.

Speaker 3

Okay. Thank you. This is CFO, Alex Xie. I think you mentioned it right, trading turnover or liquidity for the stock is actually very low. Given that the unlocking of the restricted shares actually happened only 23rd August, which is about just last week or this probably yes.

Speaker 3

So after in which we will start to see investors, other trading activities broadening. On one end, that is on a timeline basis. On the other hand, we have very rigid IR plan to go to market. We also work with various institutions in terms of our coverage and also communicate having more deployment into the retail market. So I think those are fundamentally some of the actions that we are actually working on in terms of moving up our liquidity, broadening our coverage and also assessing the capital market with institutional investors and both retail and institutional investors.

Speaker 1

Thank you for the question.

Speaker 5

Thank you. I'm looking forward for improvements. Thank you.

Speaker 1

Thank you very much. One moment for the next question. Our next question comes from Mengyang Lin from Shenzhen Yekusa Asset Management Company. Please go ahead.

Operator

The question is, we can see that the gross margin for 2026 is relatively high and how Lutus are going to deliver this target. And also for Lutus as a premium luxury brand, we're not agreeing to or we will secure the price integrity. For example, for Imira, currently the demand is much bigger than the supply. So we have a plan to increase the price. In addition to that, we are also controlling the cost for the bond cost of our velocis.

Operator

This year is expected to reduce 8%. In addition to that, we are also managing other costs from other areas. Besides, we have also proposed a Win 26 plan. During this plan, we projected to deliver 30,000 vehicle sales in that year and it will give us more revenue.

Speaker 3

So sorry, yes. For gross profit margin, we definitely will want to be able to

Operator

The question is for this year and the next year, what's the target of gross margin? And the answer is that this year, we have been affected by many elements and we are going to deliver our targeted product and also price increase. And gradually, we will deliver the gross margin of 20% in 2026.

Speaker 5

Thank you. Thank you for

Speaker 1

the questions. One moment for the next question. The next question comes from Yi Tong Huang. Please ask your question.

Operator

The question is, in 2024, how does this improve its cost management and also its cost structure? And the answer is that in 2023 2024, basically the costs have already peaked and we have already launched 4 models supported by the platform and technology that we have previously developed. We will continue to invest in technological development, but the cost is relatively less. In addition to that, in the plan of the Wing 26, we proposed an idea of a small part effective organization. In other words, the company or organizational structure would be less relatively streamlined and people would be less relatively less.

Operator

However, the most important thing is to deliver great quality products and to provide excellent customer experiences so that we can secure the price integrity. For our staff and employee at this moment, it is relatively at a balanced status. It is less than 2,000 people that they can support when it comes to commercial R and D and other necessary departments. This is how we keep the cost at an acceptable status. So for a company, the most important thing is to explore more revenue streams, which I previously elaborated.

Operator

And another approach is to reduce the cost. Alex, that's for Lotus, we are operating with asset light mode. We don't own any factory. And for the commercial side, only China is operating with the D2C mode. For our non channel markets.

Operator

They are operating with dealers with great experiences in the past. For our company, the most important thing is how to keep streamlined, how to keep lean and light and how to leverage the existing talent to support our achievements and promise in 2026. So the most important thing is not to is not about redundancy process. The most important thing is how to establish a good team that can help us to deliver Win26 plan. Question is, Mr.

Operator

Feng previously mentioned about revenue exploration and the safe cost and Lotus has also mentioned about targeted to deliver 30,000 vehicles and to achieve positive EBITDA and how Lotus could deliver that target. Answer or response is that we have a robust product plan besides 2 revenue streams that I previously mentioned, bespoke service and also ADAS solutions. In 2024, we are also planning to launch a new vehicle model and this model will go into the market in Q1 2026. And this model is going to be the major volume boost for us in 2026. In 2026, we will have a strong and comprehensive retail channels unlike when we launched the 1st and second models years ago, which we didn't have a mature retail channels.

Operator

So when we launch this new model in 20252026, it will give us immediate return. Although this vehicle won't be launched until 2025, the technology of this vehicle will be released in Q4. So stay tuned to Guangzhou Auto Show. Thank

Speaker 5

you.

Speaker 1

Thank you for the questions. With that, I would like to hand the call back to management for closing.

Speaker 2

Thank you, everyone, for your questions and thank you, management. Well, given the time constraint, we will conclude the call very soon. If you have any further questions, please feel free to contact our IT team. And this concludes the call. Thank you, everyone, and have a great day.

Speaker 3

Thank you.

Speaker 5

Thank you.

Powered by Quartr
Earnings Conference Call
Lotus Technology Q2 2024
00:00 / 00:00