WeRide Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by. Welcome to Rewrite's third quarter 2025 conference call. At this time, all participants are in a listen-only mode. The company will be hosting a question-and-answer session after management preparation. Based on today's event, it's being recorded. The company's unaudited financial and operating results were released by the Newswire earlier today and are currently available online. Joining us today are WeWrite's founder, chairman, and CEO, Dr. Tony Han, and CFO and head of international, Ms. Jennifer Lee. Before we continue, I would like to refer you to the safe harbor statement in the company's earnings press release, which also applies to this call as today's call will include four working statements, including WeWrite strategies and future plans. These forward-looking statements are made under the same other provisions of the U.S. Private Security Certification Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. The company's actual results could differ naturally from those stated or implied by this forwarding statement as a result of their important factors, and please refer to these factor sections of the company's Form 20F found with the SEC and announcements on the website of the Hong Kong Stock Exchange for the full disclosure of these risk factors. The company does not assume any obligations to update any following statements except as required under applicable law. Please note that all numbers stated in management prepared remarks are in R&B terms and we will discuss non-IFRS measures today, which are more truly explained and reconciled to the most comparable measures reported in the company's earnings release and filings with the SEC and the Hong Kong Stock Exchange. With that, I'll now turn the call over to the company's founder, chairman, and CEO, Dr. Tony Han. Please go ahead, sir.

Thank you. Hello, everyone. Thank you for joining us today. I would like to begin by highlighting some of the key milestones we achieved this past quarter. Q3 was a period of extraordinary progress while we were right. Most notably, we made history in Abu Dhabi by securing the world's first city-level fully driverless robot taxi commercial permit outside the United States. We have already started the driverless operation through Uber, which I'm going to detail in the later slides this week. With our recent expansion to Belgium, and our inaugural driverless robot taxi license in Switzerland, V-Ride has become the only company with autonomous driving permits for eight countries. By October, we have developed L4 fleets in 11 countries and more than 30 cities with over 1,600 L4-level autonomous driving vehicles in operation worldwide. let's take a look at our third quarter accomplishments so uh let's let's let's let's turn into uh let's turn into a of derby slides okay next slide please So, as mentioned earlier, WeRide has been officially approved to provide full driverless commercial robot taxi service in the UAE's capital of Derby. This landmark authorization removes the requirements for in-car safety officer and demonstrates the regulator's strong confidence in our technology. Following this approval, WeRide and Uber directly launched the region's first fully driverless wire charging robot taxi service this week, starting from Yas Island and with a city-wide rollout underway. And next page. Our commercial operation at Abu Dhabi has begun in last December. Our service now covers roughly 50% of the city's core area. In half of 12 hours, our single vehicle can complete up to 20 trips per day. I think this is a quite exciting progress. In the mid-term, we aim to extend our service hours to 24-7, increase vehicle utilization to more than 25 trips per day, and improve human-to-vehicle ratio to 1 to 10. will lead us to a very healthy unit economics. We believe Abu Dhabi will set a global benchmark for large-scale and commercially viable robot taxi operation. And with all of these numbers, I think our unit economics is very, very healthy and can be profitable. So I just want to emphasize, you know, this kind of breakthrough is quite exciting, and we worked so hard for a whole year to achieve this full driverless robot taxi operation in Abu Dhabi, and this is the first city level outside of the United States who are capable of first city level robot taxi service out of the United States, and it is actually provided through Uber platform. So with all of these important factors, this is unparalleled, and we are so excited that we are making history. Now let's talk about our current operation in Dubai. In September, we secured a self-driving vehicle trial permit from Dubai's roads and transport authority and have begun road testing for our driverless operation in Dubai. Our goal is to launch supervised trial on Uber this year and the driverless commercial operation in the year of 2026. I mean, next year we are going to provide driverless robot tech service in Dubai. Next page, please. Then we are going to talk about our current operation in Saudi Arabia. In Riyadh, we began offering robo-taxi rides through Uber in October, making our robo-taxi service first and only publicly accessible robo-taxi service in the kingdom. With our development in the three largest cities in Mideast, that is Riyadh, Abu Dhabi and Dubai, We have more than 100 robo-taxi vehicles in the Mideast region. The launch of driverless operation of Derby is paving the way to scale the fleet to more than 500 vehicles by next year and to tens of thousands by 2030. So we are very excited and very confident and very optimistic about our full driverless robo-taxi operation in Mideast. But that's not only our operation region, and I want to talk about East Asia and Europe. First, in Singapore, together with Grab, we received approval from the Land Transport Authority for both robo-taxi and the robo-bus in the area called the Punggol District. We plan to increase our AV test volume by four times by the end of this year. integrating our technology into Grab speed management and the routing system so that in future we can provide driverless robot taxi through Grab in Singapore, just what we have done in Abu Dhabi through Uber. Actually, all of these efforts will pay the groundwork for commercial service in the next phase. And then let's talk about Switzerland. In Europe, the expansion in Switzerland continues to lead our robo-taxi deployment. We received the country's first driverless robo-taxi license, enabling our autonomous operation in the fertile region. A full driverless public service is expected to be launched in the first half of 2021. That is our current operation in Europe and in East Asia and Singapore. And now let's talk about China. In our China market, we continue to expand and innovate. As we scale our commercial fleets, we also launched a 24-7 driverless commercial service in the Huangpu district at Guangzhou. This is an area of 150 square kilometers. As of October, we have deployed more than 300 robo-taxi in Guangzhou and over 100 in Beijing. For all of these services, you can hail a driverless robo-taxi in this region through our WeRideGo app. User value is kept very close to our heart, and we recently introduced China's first free pickup and drop-off feature for RoboTaxi service, we call it to-do service, allowing our system to intelligently recommend optimal boarding locations. This greatly improved both operational flexibility and user experience, which is well captured by our operational data. In November, each RoboTaxi completed up to 25 They did trips in Guangzhou and the 23 in Beijing, which is clear evidence of accelerated adoption. And then, you know, this is all our current exciting progress about RoboTaxi. Next, let's talk about our other applications. First, RoboBus. Okay, next page. Our RoboBus obtained Belgium's first level four test permit, and we launched our operation in Leuven, making Belgium the 11th country covered by our service. In Guangzhou, after serving more than one million passengers since 2021, we received an offer, received an order for another, for additional 100 midsize local buses. This is a very exciting achievement. Actually, this is a newly developed RoboBus. In Hong Kong, we established a partnership with Guangchong Bus Holding to deploy more than 500 Level 4 vehicles over the next three years. And for our L2 Plus Level 8 ASUS system, WeRide and Bosch achieved a major milestone in November with the start of production of vPilot 3.0. This is an end-to-end system. It's just like what Tesla has achieved through their FSD system. Our vPilot is totally comparable to what Tesla can do with FSD. The vPilot 3.0 will debut with the refreshed Cheryx CDS and ET model. and existing owners will receive OTA upgrades. With this kind of new feature, every owner of Chery Exceed ES and ET can enjoy the experience of Tesla's FSD. With this exceptional end-to-end system, WePilot has also been selected as the major add-on system provider by Guangzhou Automotive Group, GAC, for several of their passenger car models. That part is actually a very exciting progress, demonstrating V-Ride are not only capable of doing L4 level robotaxi, but also are capable of doing L2++ level add-ons for a massive production car. And this page actually shows, summarizes our footprint in the global. Actually, V-Ride's strategy prioritizes a balanced development in a global market. I want to explain this slide a little bit. You can see in these 11 countries, we have different levels of operation. We have tested or we can operate it without the driver. They are showing in the legend. product offering has maximized the value of our strategy, making us the only company whose technology is available in the 11 countries shown here. So we actually have a wide spectrum of applications and service available for the global market. Next, let me discuss about the backbone of our technology. This is called We Run One Universal Platform. By starting from supporting L4 applications alone in the early days, WeRise 1 has gradually grown into a more powerful platform that empowers the full spectrum from L2 to L4 while continuously breeding new tools and systems. One of the most prominent is our world model, WeRise Genesis. In our Genesys model, you can see Genesys is a new platform and will allow autonomous vehicles to be tested in a digital twin of the real world, safely, efficiently, and at a large scale. It features the data loop, algorithm loop, and the simulation validation loop that are essential for scalable autonomy. This is our world model, and it's seemingly technology advantage. Our world model can be seamlessly integrated into an end-to-end system, and our L4 system can leverage on the data we collected from our L2-level data. So this genesis form as the core flywheel, actually, we call it a double flywheel. We can actually leverage on L2-plus plus-plus level massive production car data to improve our robo taxi. In turn, our robo taxi data with redundancy can help us to boost the performance I want to emphasize, in this world, there's only one company, WeWrite, can do so. On one hand side, we have a large-scale robo-taxi fleet, make WeWrite capable of doing leading robo-taxi service like Waymo and other companies like they can do in the U.S. so that we can actually capture all the characteristics of food driverless operations. At the same time, we write supply 3.0 and very advanced data system comparable to the FSD of Tesla, and we can leverage on mass production car data and collect all this kind of data in a very broad sense in all kinds of scenarios to help us to improve the performance of global taxi. We believe we can combine the benefits of L4 and L2+. This hybrid architecture enhances adaptability, reliability, safety, and transparency, ultimately enabling robust commercial deployment. We look forward to sharing more about this advantage soon. In summary, Q3 was a quarter of exceptional execution. We expand our global leadership and we translated technology innovation into commercial reality. With that, I will handle the call over to our CFO, Jennifer, to discuss our financial performance. Jennifer, please go ahead to discuss about the financial numbers.

Thank you, Tony. Hello, everyone. Before we dive into the third quarter financials, I want to highlight that all figures are in RMB and comparisons are year-over-year unless otherwise stated. Now let's discuss our third quarter financial performance. We delivered a total revenue of 171 million with a year-over-year growth of 144%, driven by our continued fleet expansion and increasing service penetration. The revenue growth also reflects a significant milestone we have achieved during this quarter. supported by our advanced technology, robust deployment, and operational capabilities. Our revenue came from both product revenue and service revenue. Product revenue delivered strong growth of 428% to 79 million in this quarter, an encouraging result driven by the increased sale of our robo-taxi and robo-buses. Service revenue grew 67% to 92 million in Q3. supported by an increase of $29 million from intelligent data service and an increase of $8 million in autonomous driving-related operational and technical services. Service revenue has surpassed product revenue in this quarter, demonstrating a continual growth, momentum, and healthy business structure. Among our product lines, what really stood out in Q3, same as in the last two quarters, was our robo-taxid businesses. Robo-taxid revenue increased 761% year-over-year to $35 million in Q3, accounting for 21% of total revenue in this quarter. With our new federal permit in UAE, we are the first and only robo-taxi company that have begun food driverless robo-taxi operation in UAE. Removing in-car safety officer is a critical milestone from a financial perspective. which will enable our RoboTaxi service to achieve uneconomic breakeven. The quality of our growth is also compelling. Group-level growth profit increased 1,124% to $56 million for the third quarter, with a group-level growth margin of 33%, demonstrating our industry-leading growth margin as our business continues to grow. We aim to keep delivering business value along with our global strategy. Operating expense decreased 51% to $436 million, with R&D expense accounting for 73% of the total operating expenses. To break down further, R&D expense increased by 24% to $316 million in the third quarter of 2025, compared to the same period of 2024. Excluding share-based compensation, R&D expense grew 39% to $288 million as we further strengthened our global data compliance and advanced R&D efforts for our pre-installed Robotaxi. The increase in R&D expense was primarily due to an increase of $31 million in service fee for R&D projects, an increase of $21 million in personnel-related expense from headcount increase, and an increase of $23 million in material consumption and depreciation and amortization expenses. Administrative expense decreased by 84% to $100 million in the third quarter of 2025 compared to the same period in 2024. Excluding share-based compensation, administrative expense increased by 23% to $74 million The increase was primarily due to an increase of $6 million in professional service fee, mainly related to legal compliance service, and an increase of $4 million in personnel costs as we continue to build necessary supporting functions to grow our business. Selling expenses increased 23% to $19 million in the third quarter of 2025 compared to the same period of 2024. Excluding share-based compensation, selling expense increased by a third 36% to 19 million, which was well below the sales increase. Our commitment to R&D is the backbone of our strategy. We will continue to direct our resource there to pioneer the industry innovation and keep building our competitive advantage. Alongside this, we will strategically grow our global team. It's a clear focus on a region that has an accelerating adoption of L4 solutions. This ensures that we have a world-class talent needed to support our business expansion. Our net loss narrowed by 71% to $307 million in the third quarter of 2025. On a non-IFRS basis, adjusted net loss increased 15% to $276 million. largely due to an ongoing R&D investment and broader operational support required for the expansion of our business. As of September 30, 2025, we had $4.5 billion in cash and cash equivalent and time deposit, $926 million in investment in wealth management products, and $18 million in restricted cash. We had short-term bank borrowing of $245 million, Our current liquidity reserve, along with the proceeds from our recent Hong Kong due primary listing in November, have enabled us with a resilient position for our R&D-focused strategy and our globalization deployment process progress. Our fully driverless robotaxi commercial permit in Abu Dhabi is not just a local milestone. It's a scalable blueprint for the global industry, It demonstrates a viable path for city-level food driverless cooperation outside the U.S., along with the potential for profitable unit economic and major international markets. Our strategy is to scale this model globally. We have the complete package, the technology, the operational experience, a proven city record, and regulatory trust. In the next five years, we will achieve large-scale L4 deployments, creating a sustainable business and delivering tremendous value of autonomous driving to the shareholders. With that, operator, we're now ready to take on some questions.

Thank you. We will now begin the question and answer session.

To ask the questions on the phone, please press star 1-1 and wait for a name to be announced. One moment for the first question. The first question comes from the line of Tim Hsiao from Morgan Stanley. Please go ahead, sir.

Hi, Tony and Jennifer. Thanks for taking my question. This is Tim from Morgan Stanley. Congratulations on the strong results in continuous expansion and Robotech separation globally. I have two questions. The first question, we noticed that we officially started commercial deployment of the driverless Robotech in Abu Dhabi, UAE. So in addition to the volume-up size to revise fleet sales, as Tony just mentioned, how should we quantify the revenue opportunities of a vehicle sales, revenue charge, and the profit sharing in the long run? That's my first question.

Okay. Thank you, Tim. That's a great question. I'll take the first one. So for the benefit of all listeners, I'd like to briefly elaborate on our robot access business model. In domestic China, We mainly own and operate the vehicles by ourselves and on our own ride-hailing platform, Virego. So before, after the UE gets to a break-even point in the next few years in China, we will gradually engage third-party app owners and the ownership of them. And for now, we pretty much own, like, all the vehicles by ourselves. And international market is different. From day one, we collaborate with platform partners such like Uber, Grab, SBB, TXAI, and we generate revenue from three main streams, three streams. The first one is revenue share from the ride fare, and second one is the annual licensing, and third is the sale of the vehicle. So vehicle sale is considered as the product revenue. V-Ride can scale up the robo-taxi fleet much quicker and in a lighter business model like assets on an asset basis since the Robotech operations fleet doesn't sit on our own balance sheet. We already just sell this to our partner already. And the revenue share and annual licensing are the recurring service revenue over the whole lifespan of the vehicle, which tend to be five to seven years. In particular, revenue share will become a significant multiplier following the expansion of the fleet size. We'll take Middle East as example. A robo taxi at a human level utilization, which means they can complete like 25 orders per day, can generate an annual like revenue of over 90,000 US dollars like on the platform. If we right take 30% of the revenue share, that will give us 30,000 US dollar per car per year as service as a revenue share. If we can take 70% of the revenue share, that will give us like $60,000 per car per year. So if we are moving this one step closer to the goal and to see what we have already, let's say in Abu Dhabi, right now we have a significant presence, this near 100 robo taxi in Abu Dhabi. Now we already cover 50% of the city core area. And the commercial model is we integrating on platform like Uber. Right now, we are charging at the same price level at UberX and Uber Comfort. In fact, if you get like get on the Uber and to call the robot, just to call normal ride-hailing car in half of the city, no matter you pick UberX, Uber Comfort, or the autonomous option, you can all get a vehicle. And this demonstrates that our service is competitive with the mainstream, like red healing from day one on the pricing level. And unit economic is, on the unit economic side, the most critical metric is utilization. Right now, we already achieve a daily average, like 12 order per vehicle in a 12-hour shift. Sometimes we can get to, on the good days, we can get to more than 20 orders per vehicle per day for the 12-hour shift. And it's already indicating a strong user preference and stickiness. So for your information, for 12 orders per vehicle per day, we can already get to the break-even threshold in this market. So there's huge profitability potential. Based on our current driverless cost structure and plan to extend the hours to 24 hours next year, We project an average daily order can reach to 25 per vehicle per day. And this level of utilization will lead to a very strong profitability potential next year. So, well, the specific percentage of revenue share as confidential between different partners, but this approach can empower a sustainable win-win partnership for everyone in the ecosystem. Thank you.

Thank you so much for sharing all the details. My second question is also related to Rewire's global business. So looking forward in addition to operations in Abu Dhabi and Switzerland, which we just announced, which markets could step up as a key volume driver to Rewire? And does Rewire need to accelerate R&D and expanding more aggressively into next year, 2026? to finance the company's robust expansion in overseas? That's my second question. Thank you.

Okay, I'll take the question. And so, first of all, I think, so, besides off-topics with land, you know, which markets would step up as key volume driver? So, to us, in our plans, like, so, first of all, in the Middle East, we have Two major cities in UAE, Dubai and Abu Dhabi, we have already got the permits and we are doing extensive road testing. UAE is definitely the one country we pay a lot of attention to. It's a very important market. There's also Saudi Arabia. You can see major countries in Saudi in the Middle East. They are part of the potential countries. Also, Europe. And also, and other developed countries in Asia like Japan, Singapore, and Korea, they are all potential markets can help us to drive the volume up. But one thing I want to point out is like Tim, you just asked a very good question. That is, it's also I have been thinking about this over the years all the time. That is, what are our target markets and which markets can we make our services and products very profitable? Through our testing, through our operation in Abu Dhabi, we find something so-called Abu Dhabi model. Together with Uber, we found the unique dynamics is good and give us a very promising projection that we will soon, in this region, we can make a good, very profitable service. This up-down model actually created a roadmap for other cities. With Uber, and I think we will try to copy this kind of model to the similar cities. Also, this is a good combination of our current technology, our strategy, and also our collaboration. So with this model, I think we tend to copy to Singapore by forming another alliance with Grab, our also very important strategic partner to do it in Singapore and also potentially all East Asia. And in China, we are focusing on developing a robo-taxing service based on our own application. And about expansion, you know, Although we are increasing R&D investment to build stronger technology platforms, and we also try hard to recruit top talents, but we expect our growth of related expenditure to be moderate because we want to adopt a satellite model to strike a balance between scaling and the investment. One of our very mid-term goal is trying to reach the profitability at the same time, maintain a strong market share. And also we still want to innovate. So we have to strike a balance between investment and expenditure and the development. But with our current progress, I think I'm very optimistic because I have already seen the success of the FW model and the places we can easily copy the Updavi model to, and by gathering all the strengths from these potential markets, we want to achieve profitability in the near future.

Thank you so much, Tony, for sharing that great insight, and congratulations, Tim, and looking forward to more exciting project practice from around the world. Thank you.

Thank you for the excellent question, Tim.

Thank you for the questions. The next questions will come from Alex Yao from JP Morgan. Please go ahead.

Hello, and good evening, management team. Thank you for taking my question. I have two questions. Number one, what is your take of the robot taxi business in China? How do you envision economics to change in the future? for China and for international market, respectively. The second question is, how quickly can the driverless milestone of the operation be replicated in other markets? What can we expect for your fleet expansion plan globally? And what are the catalysts or hurdles for your plan?

Thank you. Okay, let me try to answer these questions one by one. Although it's claimed to be two questions, I feel it's two groups of questions. First question, if I remember clearly, it's roughly about what do you think about China market and what's our plan for China market and our thoughts on the economics of China market. First of all, I have spoken a lot about the global market, Middle East Asian market, East Asian market, European market, but what about China? Our headquarters are located in China. China is definitely a major market. We also definitely think China is as is one of the most important market we are targeted at okay now let me elaborate about the pros and cons to put resources in china market and and what our strategy is so first of all china is a unique market with the largest user base and the dynamic economics and also it is a great test ground it has been both our technology proving ground and ideal operation, our sandbox for our very innovative ideas. But of course, That doesn't mean we treat them as a lab. When we do a robot taxi operation or trial operation, we keep safety as our top priority. But still, with all kinds of scenarios, all kinds of different climate, different weather conditions, China is a vast country, and we actually tested so many different methods, different algorithms. that part actually china is unique and a very big market but we believe but you know china is also a very in terms of development it's not that balanced you know they have tier one cities looks like paris So we believe profitability in tier one cities can be achieved with a combination of three elements. Number one, city-level driverless permit. Number two, average daily order of high double digits. That means like what we try to achieve in the Middle East should be achieved in China also, you know, more than 20 orders per day. Number three, a kind of relatively healthy price, okay. Although these days the taxi fare in China is still relatively low, but we expect to see the fare to grow a little bit. So it's still kind of relatively healthy. So with these three factors, we believe we still need to expand our market in China, mainly in tier one cities. So far we have achieved like as I mentioned before, right, 300 robot tech in Guangzhou and another 100 robot tech, more than 100 robot tech in Beijing in the areas of 150 kilometers area. And we are continuing to expand that. And also we have implemented the free to do, I mean, pick up and drop off features, help us to improve the user experience. And I think, you know, we aim at, supply better robo taxi service than the traditional taxi service supplied by human driver therefore we can get more orders and uh and and also we can uh we can give better user experience so that we we can be ordered more frequently and we expect that economics of all of these markets will help to improve over time. And also we want to actually learn what we have in China to expand to and learn what we have learned in China and use them as our competitive advantage in a global market. Therefore, I think we still treat China as one of the most important market and we will keep on invest and inject resources Okay, the second group question is about how quickly we can copy Updavi model to the rest of the world. Okay, first of all, thanks for asking this question, Andy. And we believe we have find this kind of Updavi model. It's kind of like a Matthew effect. And we write this kind of a unique first movement. It is the only one so far out of the United States that you can have a citywide driverless permit and you can provide this service through Uber. So that means make the service more ubiquitously available. Therefore, I think we can quickly copy to some similar market like Dubai in UAE same country, Riyadh in Saudi and same region, and Singapore with a graph support. So we are trying to copy to these kind of countries, and I believe the regulatory condition of all of other factors are quite similar. And we also want to emphasize Europe is a very important market and we are trying to see whether we can copy to Europe. And about the catalyst and hurdles, catalyst is actually, because of this massive effect, other countries are more prone to allow our operation, are more prone to give us permit. But at the same time, the hurdles is still the regulatory issues we want to make sure We leverage our current successful experience to get more driverless permits so that we can deploy the service. That's all I want to say about this question.

Thank you for the questions. One moment for the next question. Next question comes from Ming Sun Lee of Bank of America. Your line is now open.

Hello, dear management team. I have two questions as well. So first question, we are seeing more OEMs and ride-hailing companies announcing to plan to enter the robotics business. What are the key advantages and how should we think about the competitive landscape in the future? I think that's my first question.

Okay, so I think these days because of the increasing discussion and the increasing maturity of RoboTaxi, you see so many car OEMs and car-hailing platforms start to talk about RoboTaxi or start to announce their RoboTaxi strategy. But one thing I want to mention is like, RoboTaxi to do RoboTaxi is not easy. It takes many years of efforts, technology accumulation, regulatory exploration, and that's why there are so few mature RoboTaxi companies in this world. If you count the mature robo taxi service, one standard is they have open to public driverless robo taxi operation. I think you can count at most one or three or four. Not for many. It's not because of why you see a few companies getting matured, then you can announce your strategy. Better you need to show whether you have enough technology accumulation, enough experience to do robo taxi. But our VRI's competitive advantage is still in several areas. First of all, technology, right? VRI, our ability to massively deploy both L4 and L2++ level mass production vehicle help us to actually, first of all, gain data, to gather data more efficiently. and make our algorithm more generalizable. So that's what actually in turn strengthens our technology. Second, our capability actually for fast iteration is there. And, you know, think about for cloud OEMs, right? Usually they have a relatively small data system development team. what you can do for L2++ ADAS system is far from what you can achieve in L4 L2 is just like a system, driving system. For the L2 system, you don't need to take the final responsibility, but for L4 system, you have to be redundant, have to take the responsibility. Over the past nine years, we have to accumulate lots of experience. That's why we can roll out taxi service. And I haven't seen any other car OEMs or car-having platform be able to do so. So that is one of our advantages. And the last thing I want to emphasize is about the core of a company. The core of WeRide is really the AI technology. WeRide, since day one, has been an AI company, and we hire so many top talents and set up our company for the fast iteration in the AI algorithm. I don't think traditional car OEMs or traditional car-hailing platforms are capable of this kind of faster iteration so that's when let's wait and see but so far i haven't seen any major car oems or car hailing platform company have successfully rolled out any normal taxi service driverless remote taxi service to public okay that's my answer to these two questions uh sorry uh one more question from me

So following the last question, do you think the amount of data and the development of AI models have given OEMs to enter and compete in robotics? Is it possible to evolve from L2 to L4?

Oh, very good question. So first of all, I want us to think about one thing. So who are the best L2++ or other system company in this world? Probably Tesla. In China, I think, we can name a few, maybe Xpeng, Li Auto. But if you look at their strategy, they are doing L2++ in the system, and they talk about RoboTaxi, but when they come to RoboTaxi, they always try to attack this problem or approach this project directly from L4 level. Why there's no L3 strategy? Where are their L3 strategies? There's no L3 strategy from Tesla. There's no Xpeng and the Li Auto. They all skipped at L3. Why is that? Because if you directly grow L2++ to L3 and then to L4, they find that it's really very, very difficult. It's just like you are climbing a cliff. Instead, you maybe directly solve the problem. your experience direct solve L4 system level problem. That is just like we have already done for past eight or nine years. You know, the technology has been there. You know, we have used deep learning algorithms based on large language model or lots of data. But all of this, I want to say, uh you know it's it's it's based on our past eight years experience uh currently true uh carl yam can leverage on the cutting edge uh large language model stuff but there are lots of infrastructures that are relevant like uh data simulation and the cloud computing platform. All of this, I don't think the cloud OEMs have enough accumulation. It still takes many years of them to really roll out a simulation platform, to roll out the protocol, to roll out the pipeline to test the driverless robotaxi. One thing I want to emphasize, having a Pretty good data system can let you drive for 100 miles without takeover. It's far from to roll out a driverless robot taxi. To roll out a driverless robot taxi, you have to be capable of making that car drive by itself more than 10,000 miles. So that is kind of magnetic. magnitude of difficulties so it's just like swimming your swimming pool and then you want to swim and then across the English Channel that's different so I think, I'm not going to say it's absolutely not possible to gradually grow from L2++ to L4, but it will take a long, long time. Before then that, I think, first class, the tier one robo-taxicons like we will have already taken over the global market, has already been very profitable. So time left for this major car OEMs to gradually grow from L2++ to L4 is very, very limited. Any other questions?

Thank you for the questions. We will now take the next question from Li Ping Chao from CIGC. Your line is now open.

Good evening, Tony and Jennifer. Thanks for taking my questions. So, first, I want to follow the previous technical question. And this question is for Tony, because you are quite confident in maintaining the leadership in the industry. What tools and technology approaches help you stay ahead of the curve? Could you please share more color from a technical perspective? And then I'll have a follow-up.

Okay. So first of all, As I have discussed, there's only one company in the world, to my best knowledge, that are capable of doing robo-taxi, have already achieved open-to-public driverless operation, and at the same time supply ADAS system to mass production car company. That's WeRide. We have a so-called dual flywheel strategy. That is, we can gather the data, we collect it through our robo-taxi fleet. all kinds of corner cases, and use that to facilitate our L2++ development. At the same time, we can also get what we have collected from L2++ system, like AI drive based on navigation, and make our L4 system more stable and more generalizable. And so by combining these two source of data, two source of problem, we actually gradually evolve to a super platform that are capable of RoboTaxi at the same time with limited hardware and limited HD map or navigation map make us to cover the whole global market. So these two parts actually leverage on each other, help us cannot be achieved by the single strategy company. That's one of our advantage. The other thing is the globalization. Since we have deployed the fleets in the global market, we can collect the data and also we can get heterogeneous source of data from all over the world. We can have the data collected in a very dry climate in the Middle East, and sometimes you can get data from very humid tropical areas in Singapore and very cold areas in Japan and in China, and I can't imagine any other company has this kind of wide spectrum of application area. And with all of this data and also we hired a group of talented engineers, we actually evolved very fast. The other thing I want to emphasize is our Genesys platform. It's actually based on a physical AI model and, you know, with lots of considerations on a really world model physical AI or physical AI world. and it actually seamlessly integrates with our end-to-end system. This kind of simulation platform gives us a big advantage to develop. And with the combination of all of this kind of algorithm and data, I think this method is effective here. We have many, many driverless permits all over the world in many countries, and we have many car OEMs collaborating with us. We have heterogeneous data collected from different countries, different levels of autonomy, and by combining all of this, I think we can achieve accelerated development speed, which is much faster than our competitors. That's my answer to your question.

Thanks, Tony. That's very helpful. And my second question is for Jennifer. The board of the company has authorized a 1 million USD share repurchase program in May this year. And could you please update what is the status on this program? Thank you.

Thank you, Leiping. Regarding the $100 million US dollar share repurchase program, which is authorized by the board in May, we haven't, no purchase has been initiated to date. The reason is the pre-priority work for our Hong Kong IPO constituted for a close period under the security regulation, which during which the trading was restricted. As a do listed company, we're also required to obtain specific shareholder approval to ratify this program. We are currently preparing the call and extraordinary general meeting to seek this approval, which will allow the program to proceed. Thank you.

Thank you, Jennifer.

All right, operator, we're ready to take the next question.

Certainly. Our last question comes from Paul Gong from Goldman Sachs. I beg your pardon, from UBS. Please go ahead.

Thanks for taking my question. Yes, Paul Gong from UBS. I have two questions. The first one is regarding the robot taxi revenue contribution. We have noticed that this is about seven times year-over-year growth. It seems to have a little bit of fluctuation compared to the second quarter. Could you please elaborate more on this? And my second question is regarding the European strategy. Congratulations for the permit in Switzerland recently. Can you share more on the next step of the company's plan for European expansion? Thank you.

Okay, I'll take the first question. Tony probably want to take the second. So regarding the fluctuation of robo-tax revenue, we will say for the past three quarters, you can see our robo-tax revenue made like a 22% contribution in first quarter, 36%, and a 21% revenue contribution for the past two quarters, which already showcase a very continuous momentum. The fluctuation was expected, given that our delivery schedule is in tandem with the permit upgrade and the corresponding expansion of our operating area. We made a significant step forward by securing the city-level driverless operation permit in Abu Dhabi, which will pave the way for accelerating expansion in the entire Middle East going forward. Thank you. Tony, you want to take the second one?

Yes, I will take the second one. Okay, the second question is about our, actually, our, you know, since we have already got the driverless robo-taxi permitting in Switzerland, and what's our next step for Europe? Okay, so European market is a great market for robo-taxi. I think the taxi fare in Europe in European market, they are short of labor. And that is actually a very, very good scenario or opportunity for robo taxi company to do these days we know the numbers that people, you know, especially after the coronavirus, you know, if possible, people like to take a kind of private transportation if possible. So I think, you know, there's an actual growing demand for taxi. So if we can deploy a robot taxi as a very, cost-effective method people will love this kind of product so since in switzerland we have already got it and now we are considering some other countries like we established an office in stuttgart and also try to explore in in paris so uh in the next 12 months we will solidify our foundation uh actually uh in with our prior operation in in france in belgium and and also our current operation in Switzerland and talk to all the possible countries. And we also form a strategic partnership with Uber, with Renault, with SBB, STL, et cetera. And there are a lot of airports talking to us to explore the possibility of our RoboBus. So we want to use all of our applications like RoboBus, RoboSweeper to actually help us to explore the possibility to to extend to certain countries because in certain European countries, they would like to tend to adopt RoboBus or RoboSweeper first and then try to do RoboTaxi. Gradually, we want to go to Switzerland, Belgium, Germany, France, Spain, and Norway, you know, these kind of countries to extend to more countries. And then, you know, of course, I want to emphasize our approach is dynamic. It depends on the availability of strong local partner and also depends on regulatory requirements. policy and the local weather shortage of the neighbors, all of these factors we have to consider. But for sure, we will gradually expand to the aforementioned countries and all other potential countries in Europe.

Thank you so much. Very helpful.

Thank you. If there are no further questions, I'll conclude the call today. Thank you for your participation in today's conference. This does conclude the program. We will now disconnect.

Thank you very much.

Thank you. Bye.