Lotus Technology Inc.

Good day and thank you for standing by. Welcome to Lotus Technology Inc. first half and second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your questions, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michelle Ma, Head of Investor Relations at Lotus Technology. Please go ahead. Thank you, Maggie.

Good morning and good evening, everyone. We appreciate you joining us as we review Lotus Tech's financial results for the first half and the second quarter of 2025. Our financial results and conference call materials were published earlier today and are available on our investor relations website. We are also broadcasting this call via webcast. Joining us today are CEO, Mr. Ching-Feng Feng, and the CFO, Dr. Dashie Wang. 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. 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. Securities and Exchange Commission. The company undertakes no obligation to update any forward-looking statement. except as required and applicable law. Please also note 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. You can find a reconciliation of these figures in the press release available on our investor relations website at ir.hisonlotus.com. With that, I'd like to turn the call over to our CFO, Dr. Wang, please.

Good morning, good day, and good evening, honored shareholders, analysts, and friends from the media. Thank you very much for joining our first half and second quarter 2025 earnings release. My name is Dashie Wang, the Chief Financial Officer of the Lotus. It's my privilege to briefly walk you through the companies that are audited entry in financial results. In the second quarter, The company delivered over 1,400 vehicles to distributors, a decrease of 49% year-on-year. As a result, total deliveries for the first half of the year exceeded 2,800 units, down by 43% compared to the same period last year. These figures reflect a scheduled transition period as upgraded models began delivery in Q2. The impact of the U.S. tariff policies, as well as ongoing destocking activities of the company. Revenue narrowed to $126 million in the second quarter and $218 million for the first half, down 44% and 45% year-on-year, respectively. Growth margin for the Q2 stood at 5%, down 4 percentage points from the same quarter last year. Although quarterly growth margin decreased by 5 percentage points a year-on-year basis, we achieved a first half gross margin of 8%, remaining us safely in the positive territory. Now, let me break down our sales by category and by region. By category, lifestyle vehicles accounted for 83% of the total deliveries in the Q2, up from 36% in Q1. As a result, They contributed 68% of total deliveries in the first half of the year. By region, deliveries in China showed notable growth following the start of the deliveries of the upgraded electric hyper-SEVs in the second quarter. In fact, it has become a leading model in China's premium battery electric SEV segment during this period. In the UK, our battery electric lifestyle vehicles demonstrated significant year-on-year improvement Deliveries of the EMEA to North America were disrupted in Q2 due to tariffs disputes, but already resumed in July. In terms of sales channels, the total number and regional composition of our retail stores remained stable throughout the first half of the year. Now turn to the key financials. I've already covered deliveries, revenues, and gross margin. Now let me move to other financial metrics. The cost of revenues decreased by 42% year-on-year, $299 million in Q2 and $200 million in the first half of the year. This resulted in a gross profit of $7 million for the second quarter and $80 million for the half. We reported operating loss of $160 million in Q2, a 22% improvement year-on-year, Net loss for the quarter was $130 million, down 36%. For the first half of the year, operating loss was $263 million, a 40% year-on-year decrease, while the net loss narrowed to $313 million, down by 32%. For reference, on a non-GAAP adjusted basis, net loss for the quarter was $2 million lower, primarily due to the impact of share-based compensation. Beyond these numbers, I would like to emphasize that we have now reduced operating expenses for seven consecutive quarters, underscoring the company's strong commitment to enhancing the operational efficiency and continuing to deliver values. Our first half operating expense has lowered by 42% year-on-year. and despite challenges posed by market volatility and policy uncertainties, we have achieved several key milestones. Our CEO, Ms. Feng, will elaborate on this shortly. With that, I will now turn the floor over to Ms. Feng. Thank you.