Gogoro Inc.

Welcome to the Go-Go-Ro Inc. 2024 Q1 earnings call. This conference call is now being recorded and broadcast live over the internet. Webcast replay will be available within an hour after the conference is finished. I'd like to turn the call over to the Go-Go-Ro team.

Welcome to Go-Go-Ro's 2024 Q1 earnings conference call, hosted by our CEO, Horace Luke, and CFO, Bruce Aitken. Hopefully by now you've seen our earnings release. If you haven't, it is available on the Investor Relations tab of our website, investor.gogoro.com. We are hosting our earnings conference call via live webcast through Gogoro's website, where you can also download all the earnings release materials. We will also be displaying the materials on the webcast screen as we go. If you are joining us through the conference call, Your Dalian lines are in listen-only mode. After Horace provides some of the business highlights from Q1, Bruce will go a bit deeper into the Q1 financial results. And then we will open the line for a Q&A and answer as many questions as time allows. As usual, we would like to remind everyone that today's discussions may contain forward-looking statements that are subject to risk and uncertainty. which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the forward-looking statements that appear in our press release and investor presentation provided today. And now, I would like to turn the call over to Horace.

Thanks for joining our call today. We're pleased to have this opportunity to meet with you and provide a summary of our first quarter 2024 results. Gogoro's mission has always been to change the world via innovation, so I'm especially pleased and proud of the entire Gogoro team for contributing to the development of technology and products, which resulted in Fast Company naming Gogoro the most innovative company in the Asia-Pacific and the number 37 most innovative company in the world. This is another major recognition after MIT Technology Review naming Gogoro as one of the 15 climate tech companies to watch in 2023. we are focused on the long-term impact of our technology and our innovation, while we also focus on growing key financial metrics for both Taiwan and international markets. In order to facilitate that growth, we've always indicated that we plan to expand via a more asset-light business model, which allows GoGrowth to work with many different local infrastructure owners and diversify capital risk in each location. In Taiwan today, Due to the availability of low-cost bank debt and the need to have proof-of-concept network fully operational at scale, we own all battery packs and most of the GO station infrastructure, which makes up the GOGROW network in Taiwan. With the announcement we just made last week related to the non-binding memorandum of understanding with Sumitomo Corporation and Sumitomo Mitsui Finance and Leasing Company Limited, those plans and that asset-light business model takes a huge step toward being realized. Expansions into large regions like India and Southeast Asia will require scale greater than that of Taiwan. Sumitomo, who has been a shareholder since we were a private company, is well positioned to aid in that expansion. And with the support and the financial background of Sumitomo Mitsui Financing and Leasing Company, we'll be able to make even greater strides toward achieving launch at scale in new markets. This is a partnership long in the making, and we're excited to continue to work with Sumitomo and SMFL. Q1 was a busy quarter. We launched two new vehicles. Our market-leading Pulse vehicle shows what is possible in a smart scooter that is connected and interactive. And J-Goal is an affordable, easy-to-ride vehicle which is attracting new-to-EV customers. The two newly launched vehicles also represent two brand new vehicle platforms on which we can build additional future vehicles upon. Our Jayco vehicle launched in Q1 exceeded expectations for orders. We had more than 5,000 backlog orders for Jayco with approximately $8.6 million in revenue associated with these orders. These are orders where we have received full payment from customers or approved financing from third-party financing companies and will recognize that revenue when vehicles are registered and delivered to customers as is our normal practice. This means that Taiwan government published statistics which only indicates actual vehicle registration are substantially lower than that of our actual order received. Catching up on delivery of these vehicles over the next couple months is a focus for us, and we're slightly delayed in delivering vehicles to customers due to suppliers' capacity constraints. While customers can cancel these orders, we typically have a very small cancellation rate between order and delivery. J-GO is attracting new customers to Go-Gro, as it is an affordable but feature-rich vehicle and includes a fresh, brand-new body design. MSRP is around 59,000 NTD or about 1,800 USD. And if a customer can take advantage of all the central and local government subsidies, it can be as low as 680 USD. Additionally, we have launched a new promotional battery swapping subscription plan starting at $199 NTD or approximately $6.25 per month for approximately 500 km of range. And if a customer is willing to prepay for a 36-month commitment, they can ride approximately 1,000 km, making this our most affordable subscription option to date. This is a limit-time battery swapping subscription plan to encourage everyone to make the switch to clean, green electric mobility. Jayco's initial sales show the strongest demand for a new smart scooter since the pandemic began, with the majority of customers being first-time EV buyers. Orders in April continue to keep pace with the Q1 quantities. We now have over 6,500 total back orders. These orders will be included in the Taiwan registration data when the vehicles are registered and Google will account for the revenue of these vehicles upon customer delivery. We also launched our brand new flagship smart scooter, Pulse. And similarly to Joygo, we have already received a substantial quantity of backlog orders. These vehicles will start to deliver in late Q2, and revenue will be recognized as deliveries occur. The Pulse showcases our dedication to performance, innovation, and design, setting a new benchmark for advanced high-performance smart scooter with, among other features, a hybrid air and liquid-cooled 9-kilowatt motor, a 10.25-inch panoramic HD touch digital display, and it incorporates Qualcomm's latest QWM2290 Snapdragon digital chassis to drive Gogoro's latest digital experience and services. This vehicle's MSRP of approximately 110,000 NTD or approximately 3,500 USD creates an opportunity for a superb riding experience at a very competitive price. At first look, vehicle registration for both ICE and electric vehicle appears down dramatically in Q1 based on Taiwan government's data. But that isn't really the complete story. In the Taiwan market in Q1 2024, according to the Ministry of Transportation, The total number of registered electric scooter in Q1 in Taiwan was 10,211 units, down 39% from 16,741 in Q1 2023. If all of the approximately 5,300 Jaygo backlog orders had been delivered in Q1, the total market drop would have been a smaller 8.3%, and the electric power two-wheel would have slightly outperformed the broader market with only a 7.5% drop. we believe the ongoing excitement associated with our new vehicle models keeps us on track to a target of approximately 10% of total Taiwan's volume this year. Gogoro and total powered by Gogoro network vehicles registration figures were 7,321 and 8,240 respectively. Excluding JGO backlog orders, with Powered by GoGro network vehicles representing 80.7% of total EV sales in Q1. Q1 is always our seasonally lowest revenue and units quarter. While our first quarter revenue was lower than that in previous years, we believe that typical seasonal volume increases in the remainder of the year, as well as the volume of orders for J-Go, they're yet to be delivered and the pre-orders of the polls allow us to remain confident in these forecasts. The GoGo network continues to show strong retention as well as solid revenue and subscriber growth. We closed the quarter with 596,000 subscribers and $32.5 million in battery swapping revenues, an increase of 0.6% from Q1 2023. We do expect faster growth in our battery swapping subscription business in Q2 as we begin to deliver larger quantities of the JGO backorders. We added 39 GoGo Quick Service Centers in Q1 and continue to expand our services and sales footprint around Taiwan. In April, we were pleased to collaborate with TSMC once again. Extending the collaboration, we launched with TSMC in Taichung in 2022, now to Hsinchu. Together, we announced three mobility initiatives. These include the launch of 15 new gold stations powered 100% by clean energy, the introduction of Gogoro's GoldShare services, and the expansion of Gogoro Network in Hsinchu City, home to TSMC headquarters. These initiatives underscore our dedication to advancing Taiwan's focus on clean energy. Together, we aim to encourage the adoption of clean energy through the deployment of GoShare vehicles and green energy battery swapping stations nationwide. Our goal is for the public to embrace zero-carbon transportation for their daily commutes, fostering positive, impactful change together. GoShare continues to grow across Taiwan based on its unique battery swapping business model, which enables higher per vehicle utilization and less operating costs to charge or replace batteries, and consequently an improvement in the bottom line performance. This system and business model are primed for international expansion into selected markets. International markets and expansion continue to be an important strategy for us long term. In India, our battery pack factory equipment installation in Pune continues. Having this factory in India is a required precursor to ramping larger volumes of sales in India as a locally sourced and manufactured battery pack is necessary to gain access to government initiatives and incentive programs like FAME II. We continue to anticipate completion of the factory and initial testing of battery packs to be complete in late Q2 or early Q3 with manufacturing capability online in Q3. Equally critical is having the right partner in India. B2B fleet operators and demand generators. Partners with location to place GO Station as we ramp and grow in India and into other cities. as well as partners who will help us grow in an asset-like business model. These partnerships take time to develop, but we're making good progress, as indicated by our recent MOU with HPCL and our very recent MOU announcement with both Sumitomo Corporation and Sumitomo Mitsui Finance and Leasing Company, SMFL. Large, philosophically aligned partnerships set the stage for growth in India and Southeast Asia. A critical component of our global expansion strategy, which we are now rolling out in India, is the enabling of other OEMs to develop vehicles which are powered by GoGrow technology and uses the GoGrow's battery swapping solution. Leveraging all of the smart battery technology and wireless connectivity we have built into our own smart batteries, we have developed a simple kit of components ranging from an e-tag up to a more capable set of electronics which allow any existing motor to be powered by Gogoro Smart's battery packs. We're actively working with a number of local Indian electric vehicle OEMs who see the possibility for battery swapping to better meet the needs of their B2B customers and broaden their portfolio of products. Working directly with these local OEMs allow for the development of a number of different vehicle types across a broad range of price points, which can more broadly service the overall market needs. This is similar to the Power by Go-Go Network strategy we have deployed in Taiwan, which allows consumers to choose the right vehicle amongst the more than 50 alternatives that exist. One battery vehicle, two battery vehicles, and even larger, four battery-powered three-wheelers. We expect to see India OEM PBGN vehicles in the second half of 2024. In late April, Gogoro and Nebula Energy announced the launch of Gogoro battery swapping services and unveiled the Gogoro Crossover GX250 smart scooter in Nepal. The announcement took place in Kathmandu, where the first battery swapping station is located. Nebula is Gogoro's authorized and exclusive partners in Nepal. Initially, GOGO battery swapping will be available to B2B customers in Kathmandu with plans to offer it to consumers later this year. This expansion into Nepal follows our commercialization effort in India, utilizing the new India-made crossover GX250 smart scooter. Nebula intends to deploy battery swapping station every 2-3 km in Kathmandu Valley and will offer Go-Go Smart Scooter to consumer retail locations later this year. This partnership aligns with our India strategy, leveraging our India-based manufacturing capabilities to introduce the crossover series and other forthcoming vehicles to the region. Go-Go Philippines unveiled this Pulse Smart Scooter at the Makati Motor Show this April, marking a significant addition to our vehicle lineup. this cutting-edge vehicle will be available for purchase in the Philippines by late June, complementing our existing range of offerings in the Philippines. As we look ahead to the second half of 2024, we're excited to introduce lower-cost vehicles and an energy plan into reducing barrier to entry and driving mass market adoption of electric two-wheelers. In light of recent announcement by the Metro Manila Development Authority, Regarding the use of e-bikes on the road, it is important to clarify that Go-Gro Philippines remains unaffected. All our vehicles are locally certified and registered as L1 or L3. Our L3 models require a traditional motorcycle license for operation and can be used anywhere in the country except on paved tollways. Meanwhile, our L1 model, while not requiring a license, will be fully registered with the MMDA and other national agencies, underscoring our commitment to promoting road safety and compliance. We're thrilled to report continued high foot traffic in our Makati Experience Center with a notable demand for our premium scooters, particularly the Gogoro 2 Premium. With over 10 live GO station sites and numerous more in development, Riders in Manila are increasingly confident to swap and go across the city, laying the groundwork for scale with our lower cost units in the Philippines. This momentum is set to surge further with vehicle financing plans to be introduced soon, providing consumers with flexible and competitive payment plans for Gogo Smart Scooter. Sales of hardware to South Korea partners and the growth of the Guru Network in South Korea continues, and we continue to investigate and assess other markets for opportunities. With that high-level overview of our Q1 results, I'd like to now invite Bruce to provide a more detailed update on our Q1 financials.