Good day and thank you for standing by. Welcome to the ECARX fourth quarter and full year 2023 earnings conference call. At this time, all participants are in listen-only mode. Dear participants, please kindly download the PDF presentation for your reference. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star one one on your telephone keypad, and then you will hear the automated message advising your hand is raised. To withdraw a question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Renee Du. Please go ahead. Thank you, Operator. Good morning and welcome to ECARX fourth quarter and full year 2023 earnings conference call. With me today for ECARX are Chairman and Chief Executive Officer Ziyu Shen, Chief Operating Officer Peter Cirino, and Chief Financial Officer Phil Zhou. Following their prepared remarks, they will all be available to answer your questions during the Q&A session that follows. Please note, today's call is being recorded. Before we start, I would like to refer you to our forward-looking statements at the bottom of our earnings press release, which also applies to this call. Further information on specific risk factors that could cause actual results to differ materially can be found in our filings with the SEC. In addition, this call will include discussions of certain Non-GAAP financial measures. A reconciliation of the Non-GAAP measure to GAAP measure can be also found at the bottom of our earnings release. With that, I'd like to hand the call over to Ziyu. Please go ahead. Thank you, Renee. Hello everyone, and thank you for participating in our fourth quarter and full year 2023 earnings call. 2023 was a pivotal year for China's automotive industry. China exported 4.9 million vehicles in 2023, surpassing Japan to become the world's top auto exporter. global auto sales topped at 74 million as EVs continued to gain significant market share, with their global penetration hitting another record high of 23% in December. With demand for EVs expanding globally, the software that defines them and the enriched in-car experience they offer will grow intelligent. According to BCG, software platforms for vehicles are forecast to grow at 12% CAGR by 2030 with a market value of $13 billion, creating enormous market opportunity that we are uniquely positioned to benefit from with our innovative product portfolio. There are now over 6 million vehicles on the road that incorporate our technology across 25 brands offered by our 16 automotive OEM customers. ECARX equipped vehicles on the road increased 8% from last quarter and 30% from the same period last year. We are starting out the year strongly with a solid pipeline that includes the expected launch of 49 vehicle models over the next 18 months, which we expect to translate into an additional 1 million vehicles on the road that incorporate our technology. This growth is reflected in our financial results, where revenue during the fourth quarter hit a record high of CNY 1.87 billion, up 22% year-over-year, while for year 2023, revenue hit CNY 4.67 billion, up 31% year-over-year. The sector continues to present enormous opportunities for growth despite increasing price pressure as competition intensifies. While we continue to invest in our future long-term growth, we are simultaneously working to improve operating efficiency across our supply chain to build a sustainable path towards profitability as our business grows to scale. Our net loss for the year narrowed significantly to CNY 1 billion compared to CNY 1.6 billion in 2022. Our customer base continues to grow as automotive OEMs increasingly recognize the significant value proposition that our solution offers them. We added one new mass-marketed Japanese brand in December and multiplied EV project wins through our strategic collaboration with one of China's top automotive OEM groups. This is all in addition to winning three new projects within the Geely ecosystem during the quarter. Our international profile and brand awareness continues to strengthen alongside our expanding customer base. Last month, we showcased our full product line and met with a number of well-known global automotive OEMs at CES Las Vegas. Quarter four also saw the launch of the Polestar 4 and Volvo EX30, which showcased the Polestar OS, the customized OS based on Flyme Auto, and ECARX Cloudp eak Software Stack. Both vehicles are equipped with Google Automotive Services, which highlights our ability to deploy these services at scale and support both Chinese and global automotive OEMs with the launch of their vehicles internationally. Our unique partnership ecosystem continues to be a key driver of our success. During Quarter four, we embarked on a new joint venture with smart to collaborate on intelligent automotive products and strengthened our existing partnership with Black Sesame Technologies to further develop our intelligent driving ecosystem. This is in addition to our partnership with Mobileye, which was on full display with the launch of the Polestar 4. I'm extremely pleased with the progress we have made throughout the year. With our profile growing internationally, strong partnerships, and cutting-edge solutions, we couldn't be in a better position to benefit from the enormous growth opportunities ahead. I will now pass the call over to Peter, who will go through the operating results for the quarter in more detail. Thank you, Ziyu, and good day, everyone. We gained significant momentum in diversifying our business and partners during the quarter. As Ziyu mentioned, we added a mass-marketed Japanese brand to our customer base and recently picked up multiple project wins for EV models throughout our collaboration with one of China's top automotive OEM groups, with the start of production expected by the end of 2024 or early 2025. To sustain this momentum and boost the visibility of our solutions, we held eight tech shows across five cities in China in Q4, which generated significant engagement with over 2,000 attendees. We also won three new projects from existing customers within the Geely Group and ecosystem brands during Q4. Our recent progress underscores the significant market opportunity for our innovative product portfolio and the strength of our technology. I'll start with the ECARX Antora series, which embodies the fundamental requirements needed for a truly intelligent vehicle. The Antora series integrates the world's leading 7-nanometer high-performance automotive-grade SoC SE1000, which features unique hardware architecture, including built-in function and information safety islands that don't require virtualization, and a high-performance programmable NPU with 8 TOPS AI computing power and multiple acceleration engines. Building on the Q3 debut of the Lynk & Co 08, the first vehicle to launch with our full-stack solution, Q4 saw the mass production of the Antora 1000 computing platform to be integrated into the updated version of the Lynk & Co 06. The Antora series has become the benchmark platform for a number of car models in our pipeline. The Makalu platform is one of the most powerful intelligent cockpits available on the market with its ultra-high-performance digital cockpit computing platform with unparalleled 3D graphics, security, and entertainment features. The Makalu platform is expected to begin production in the first half of this year on two car models, which we are very excited about. ECARX Skyland Pro, our first-generation autonomous driving control unit with L2+ capabilities, integrated safe parking and driving solutions, highway NOA, and remote parking assist, was deployed on the Lynk & Co 08 last September. With computing power of 118 TOPS and a high-safety MCU, ECARX Skyland Pro is able to support more advanced software such as bird's-eye view and lidar perception. Its integrated ADAS solutions combined with our cockpit solutions strengthen the loyalty of our automotive OEM customers while providing end users a seamless in-car experience. One of the key growth drivers for ECARX has been our focus on innovation. We continue to invest in research and development to ensure a steady pipeline of cutting-edge technologies and features for our products. This keeps us ahead of the curve. As of December 31st, 2023, we had 563 registered patents and 557 pending patent applications globally. We have a clear product roadmap that spans from entry-level solutions to premium level, with plans to integrate next-generation supercomputing platforms starting later this year and into 2025, a key driver for our ambitious market share objectives. Our profile continues to grow globally as more vehicles with our technology hit the road. The Polestar 4 launch was a significant milestone during this quarter. It is the first model to feature Polestar OS, an operating system based on Flyme Auto, which highlights our ability to build custom operating systems with iconic brand designs for global automakers. Polestar 4 also marked the debut of the integrated driver assist system we developed in partnership with Mobileye. This mass-produced one-box solution is a strong testament to our ability to put advanced technologies from our partner ecosystem onto the road. The Volvo EX30 was launched across 33 markets internationally during the quarter and comes equipped with ECARX Cloudp eak cross-domain software stack and Google Automotive Services. ECARX Cloudp eak manages the seamless integration of all the information an EX30 driver needs, including navigation instructions from Google Maps, hands-free help from the Google Assistant, and apps of Google Play. Of particular note, it also integrates wireless CarPlay for the first time in a Volvo, in addition to wireless Android Auto. Cloudp eak is also networked into the vehicle's comprehensive suite of ADAS features, including collision avoidance and mitigation, traffic jam assist, lane change assist, Park Pilot Assist, door opening alerts, and 360 camera views. Cloudp eak is a fully flexible modular platform created to provide global automotive OEMs with a customized and intelligent platform for state-of-the-art infotainment and advanced driver assist systems in the market today. This is a key product line for us and leverages our unique ability to develop full-stack solutions in-house in close collaboration with other suppliers, technology companies, and automotive OEMs. The successful launch of the Volvo EX30 will significantly boost our brand recognition in the industry. We also had a great presence at this year's CES in Las Vegas, where we showcased our latest cutting-edge technology offerings and sought to make new connections with global automotive OEMs. It was a highly productive week as we were able to meet over 50 customers and partners on the sidelines of the events. Lastly, I'll share a couple of key updates on our partnership ecosystem. In December, we formed a new joint venture with smart to locally develop intelligent experiences within smart vehicles. We previously worked with smart to co-develop a customized smart OS operating system for two of their earlier models and are excited about what we can accomplish as we deepen our collaboration. We also strengthened our partnership with Black Sesame, which will pave the way for us to bring a powerful new ADAS solution into the market. We have lots of synergies with Black Sesame and are incorporating their cutting-edge intelligent driving technologies into our products, and this will enable us to offer a compelling full-stack solution to automotive OEMs. In conclusion, our growing commercial momentum, leading technology, and rich partner ecosystem ideally positions us to seize the tremendous opportunities created by the growth of the EV and software-defined vehicles in China and globally. While we are pleased with the progress we've made in 2023, we recognize that we are still in the early stages of our journey, with a lot of work ahead of us to meet our ambitious market share goals. With confidence at all-time highs, we eagerly look forward to execute our plan and our vision for the future. I will now turn the call over to Phil, who will go through our financial results. Thank you, Peter. And hello, everyone. We closed out the year with strong momentum as our business continues to grow and our financials improve. Total revenue for the quarter was CNY 1.87 billion, a significant increase of 22% year-over-year. Computing hardware goods revenue was CNY 1.31 billion, up 26% year-over-year driven by volume increases in digital cockpit sales for new vehicle programs. Software license revenue came in at CNY 93 million, a decrease of 62% year-over-year and 32% sequentially, primarily due to the timing of booking intellectual property license revenues and the decrease in volume of software sales. Service revenue maintained strong growth momentum, surging 95% year-over-year to CNY 463 million. This remarkable increase was primarily due to launch of the Volvo EX30 and the Polestar 4 during the quarter. Gross profit was CNY 432 million, an increase of 1% year-over-year, which translates into a gross margin of 23.1%. Total cost of revenue was up 31% year-over-year, primarily driven by an increase in sales volume of digital cockpits and service revenue. As discussed on the last earnings call, we expected margin pressure on our hardware products to continue over the medium term, driven by intense industry-wide pricing competition, customer EE architecture evolution and transition, acquisitions, and strategic programs we have in the pipeline. Our focus going forward will remain on enhancing the adaptability of our business and improving operating efficiency. We will do this by driving products and solutions revenue growth, strategically cutting costs, and making targeted new investments. This will allow us to strike a balance between top-line growth and profitability, as well as mitigate any potential impact on our margins. Operating expense during the quarter increased 28% sequentially and decreased 37% year-over-year. The sequential increase was primarily due to the impact of seasonality, as well as continued investments in our core product roadmap and international R&D expansion. The year-over-year decrease was mostly due to lower share-based compensation expenses. Adjusted EBITDA loss was CNY 232 million, up from a loss of CNY 222 million during the same period last year, primarily attributable to change in fair value of equity investment. Loss per share was -0.87 CNY compared to -3.26 CNY during the same period last year. Having finished the year on a solid footing, 2023 full-year revenue came in at CNY 4.67 billion, up 31% year-over-year, with gross profit of CNY 1.27 billion, an increase of 28% year-over-year, giving a gross margin of 27.2%. Throughout the year, we further optimized and improved operating efficiency by prioritizing investments in our global expansion and technology development. Full-year operating expenses decreased 17% year-over-year, with adjusted EBITDA loss of CNY 710 million, an improvement of CNY 37 million from last year. Moving on to our balance sheet, as of December 31st, 2023, we had CNY 588 million of cash and restricted cash, which gives us sufficient resources to invest in our future and accelerate growth. Going forward, we will further optimize our operating expenses with a particular focus on product sales and supply chain and manufacturing strategies. On the product side, we will continue to invest in R&D to drive mid to long-term growth opportunities. On the sales side, we will focus on engaging with new automotive OEMs partners, both in China and internationally. And finally, we will further optimize supply chain management and improve cost structure of products and components. This will also support a strategic transition of our manufacturing strategy from ODM to an OEM model. To summarize in other words, a focus on a balanced portfolio and a wider area of higher margin premium products. Lastly, in order to proactively mitigate the impact of an increasingly challenging geopolitical environment, we are strategically expanding our global presence for both R&D and customer acquisition. We want to build two closed-loop systems, one for China and the other for global markets. Each closed-loop system will span the entire process from R&D to delivery. To do so, we have had to make acquisitions, strategic investments and supply chain upgrades that will take time to mature but are critical to ensuring the sustainability of our business model. The acquisition of ECARX and investments in ADAS over the past few quarters reflect the careful and strategic nature of this approach. This will ensure our business will be in a healthier and more sustainable position over the long term. In conclusion, we are pleased with the strong finish to 2023 and eagerly look forward to the enormous opportunities ahead of us. Let's conclude our prepared remarks today. I would now like to have the call back to the operator to begin the Q&A session. Thank you, dear participants. As a reminder, if you wish to ask a question over the phone, please press star one one on your telephone keypad and wait for your name to be announced. To address a question, please press star one one again. I will now compile the Q&A roster. This will take a few moments. And now we're going to take our first question. Just give us a moment. And the first question comes from the line of Derek Soderberg from Cantor Fitzgerald. Your line is open. Please ask your question. Yeah, good evening, everyone. Congrats on reaching the six million vehicle mark. So you talked a bit about operational efficiencies. How will that impact gross margins for 2024? Can you talk about your expectations on how gross margins will trend throughout the year and when do you guys think you'll hit EBITDA profitability? Hey, Derek, thank you. This is Phil. I'm happy to address your questions. We had communicated earlier that we foresee pricing competition in the entire industry, right? We will observe that many Tier 1 players are having profits decrease due to the faster pricing erosion. Well, the cost optimization is behind the pricing erosion. We also foresee that the hardware product profitability will face headwinds in the upcoming quarters as we see continued high competition and pricing pressure through our customers. We also want to do new business acquisitions and strategic program developments in the pipeline. In order to mitigate the headwind impact, we will continue to provide our diversified and full-stack solutions. We will also implement our proactive pricing and improve our cost structure through proactive cost-down activities. At the same time, our consistent strategy is to embrace software-defined EV evolution in a big way. Okay? As a result, the share of volume in the BOM structure keeps increasing and the content per vehicle keeps improving as well. We also expand our coverage to sub-OEM brands both in China and overseas markets. Lots of customer names like in the smart, Lotus, Volvo, and Polestar. The Volvo EX30 is a typical example. We support Volvo to launch the flagship vehicle in 33 global markets with our unique Cloudp eak cross-domain software, which is highly integrated into the advanced ADAS features. We are very few players in the market, in the industry, with the ability to deploy Google Automotive Services globally. Those dedicated focuses enable us to diversify our business portfolios, and we are able to drive sustainable profit growth. In your words, Derek, we will maintain our focus on product software service portfolio selling and drive ecosystem-service products and solutions from growth, cost reduction, supply chain, and fulfillment efficiencies, while staying very disciplined on new investments and a balance between top-line growth and profitability to mitigate margin impact. Got it. That's helpful. Just on a little bit of the pricing pressure, what's your average content per vehicle today, and how do you see that trending through 2024 as you guys continue to innovate, add new feature sets, you guys continually sign new partnerships? It seems like from an R&D standpoint, you continue to add more features. Can you just talk about how you expect that to trend? Additionally, can you talk a bit about the software element within the content per vehicle and how we should think about how you're allocating the content on the software side per vehicle? What's the revenue per vehicle on the software side? Or maybe talk about some of the attach rates on software. Anything there would be helpful. Thanks. Yeah, sure, Derek. So I will talk about the content per vehicle numbers. And Peter, maybe you can address the question regarding how to allocate the software, how to increase our profitability through the content per vehicle improvement. So Derek, we have a wide portfolio of our product solutions, and the content per vehicle range from CNY 1,000-CNY 15,000 per car. We have solutions covering low-end to high-end and just want to meet the different customer demands on their vehicle programs. And take Lynk & Co 08, for example. Last time we discussed, it's almost our full-stack solution installed on a Lynk & Co 08. We provide Antora 1000 Pro computing platform. We provide a Flyme Auto solution, the operating system, and on top of that, we also provide our Skyland Pro, the ADCU autonomous driving solutions as well. And that helps us increase our content per vehicle to around CNY 9,000. Take the Volvo EX30, for example. We also provide our unique cross-domain Cloudp eak solution. That is also a newly developed functionality. It's the first launch in the market. Definitely, the software will improve our profitability as well. So these are the numbers I can share with you. Peter, maybe you can add on more information. Yeah, sure. Good morning, Derek. Hope you're doing well. Nice to talk to you today. So just a few comments on the product portfolio and impact of software. This tends to be a very OEM-specific topic. With some OEMs, we're providing a base platform with base-level capabilities and then working with that OEM to build the software stack on top of it. Others, Phil mentioned a few examples, Lynk & Co and Volvo, we're doing the complete software stack. I think it's very dependent on the OEM strategy and how we engage with them. But certainly, I think we're very confident from an ECARX perspective that with our capabilities, we really from silicon to cloud. We bring a unique value proposition that we can work very closely with the OEMs and line up to their model and make sure we can drive value to those customers in all markets. Appreciate the detail. Thanks, guys. Thank you. Now we're going to take our next question. The next question comes from the line of Sheila from Jefferies. Your line is open. Please ask your question. Hi. Thanks for taking my question. My first question is regarding ECARX cooperation with Mobileye. It was mentioned that we will have a collaboration with Mobileye on the EyeQ6 platform. I'm just curious if there are more details to be provided for the EyeQ6 project at the moment. Yeah, Sheila, thank you. This is Peter. I'll address that question. I think we announced we were collaborating with Mobileye on a number of different platforms. The first one will come out with Polestar in 2024. And then the one you mentioned, the more advanced Chauffeur system, we would expect to be a few years later launched. So we're very excited with the collaboration with Mobileye. They've got a great system. And we've partnered with them in a unique way where we can bring our specific value propositions to the table as we integrate the systems into the vehicles. So I think as we are able to help customize and adapt those solutions into the OEM's needs and requirements, we're pretty excited about what we could see on a go-forward basis from Mobileye across a number of different brands. Thanks. That's very helpful. And my second question is regarding the progress of overseas expansion. So what proportion of overseas revenue do we expect longer term? And do we have any breakdown by each market? Yeah, sure. I mean, as you know, we started our international expansion a few years ago. I think this year marks a very significant event that we're able to launch the Volvo EX30 with the Google Automotive Services on top and bring that across north of 30 different markets throughout the world. So it's a very significant milestone for ECARX to be able to demonstrate that capability. As we continue to move forward, we're having a number of great engagements with a few European OEMs. And I think hopefully, we'll be able to make further announcements as we go throughout the year. Design cycles in this industry can be a number of years. So as those programs continue to develop and launch and ramp up in terms of volume, it could be this period of time before we start to see meaningful movement on the financial numbers. But I think the traction we're seeing as we're approaching a number of different large customers now that we've demonstrated clear capability, we're quite excited about the potential there. Okay, understood. I have a number of questions. Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Ivan Zhang from Soochow Securities. Your line is open. Please ask your question. Hello, everyone. Congratulations on the performance. My first question is, Intel has already applied AI PC to the car. Therefore, I would like to know if there is any impact on our company. Is it a challenge or an opportunity? Yeah, thank you for the question. I think if we look at the AI impact, I think we'll see a broad set of changes throughout the entire environment. You look at the application of the vehicle, speech can be enhanced, capabilities of the vehicle to provide a better user experience can show significant details. We've got a number of projects inside our pipeline that we anticipate providing more detail on, especially as we have some events as we go through this quarter. But we've got a large number of programs and projects deploying AI into our systems throughout both what the user will experience plus the backend capabilities to drive efficiency and effectiveness inside the software. I think we also see fairly significant opportunities internally to improve our capability to deliver great software in the vehicle by using AI in our internal development processes and even rapidly accelerate our capabilities to deliver solutions very quickly in the automotive market. We see that as a strong capability of the company, our ability to operate very effectively in tight development timelines. I think the use of AI can even enhance that capability as well. Yes, thank you very much. The next question is, I would like to know how we view the impact of exchange rate fluctuations on our company. Okay. Thank you for the question. We are monitoring the Chinese yuan, the RMB, trend carefully, but decide not to do any hedge, considering the cost of hedging could be higher than the benefit. We also observe that many multinational companies also choose not to hedge RMB for their business operations in China because of the same reason. Our revenue and the operating expense is mainly in RMB, while 70% of our costs are in foreign currency. In order to mitigate the risks, we have the foreign exchange rate clauses in the procurement and the sales contract to mitigate the potential forex fluctuations. Meanwhile, we are reinventing ECARX outside of China. As I quote in my script, "We will form a closed-loop system in the overseas market from R&D production to customer delivery." With the overseas revenue mix increasing, we will launch proactive treasury tactics, including currency hedging to stabilize the forex impact. Okay. Thank you very much. I have no more questions. Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Zhang from CICC. Your line is open. Please ask your question. Thank you for taking my questions. A big congratulations for the team for having a very strong revenue for the year 2023. So I have three questions. The first one is regarding the gross margin. The gross margin for the 2023, we have seen there's a trend of erosion. And we are also experiencing that there's fierce competition going on in China. And the trend is definitely going to be more fierce for the year 2024. So my question is, could the team give us a forecast on the quarterly gross margin in 2024? And what are the actions ECARX will take to improve the profit margin? For example, to have more software content. So that's my first question. Please. Yeah. Thank you for the good question. Yeah, since the second half of 2023, we observe the fierce pricing competition throughout the entire industry. The value chain profits are compressed. Well, our goal is still to maintain 20-ish gross margin through our product, service, software portfolio selling, as well as the premium product launching while managing a good balance between our revenue growth and profitability achievements. As I mentioned earlier, ECARX has very unique solutions. We also launched a proactive pricing protection plan. We aggressively drove cost down, cost reduction initiatives in 2023. We are going to do that in 2024 as well. We will continue to increase the average selling price or content per vehicle. The example is Lynk & Co 08 and Volvo EX30. The successful launch demonstrates what our ecosystem can deliver and support our path to profitable growth. Again, we will mitigate the impact of this pricing competition or margin erosion with our diversified and full-stack solutions, proactive pricing activities, and cost structure improvement. That is basically our approach to drive the mitigation about our margin erosion. We will continue to fight for the margin improvement or margin stabilization in 2024. Right. Thank you. So my second question is regarding the project design win with the Japanese company. So congratulations on the design win. Could you provide us more insights into how did you manage to secure this design win with this Japanese OEM? And is this project to be a global project, or it's going to face the Chinese market? Thank you. Yeah, sure. Thank you for the question. As we put a lot of energy inside the organization towards customer diversification, I would say it's certainly one of our top priorities to continue to broaden our customer base, onboard new clients, and then execute with excellence as we work very closely with them. So I think we've made some significant progress as we've gone through the quarter. Today, as we got through the end of last year, today, we talked about onboarding of two new customers. Now, these will initially start with the market here in China. And I think we have an opportunity to continue to work more closely with those customers to broaden that partnership and grow outside of China as well. So we'll continue to put a tremendous amount of focus inside the organization. I think we'll see continued advancements as we go through 2024 of similar announcements where we can engage quite deeply with new customers, both in our markets in China as well as in markets in the rest of the world. Right. Thank you. Yeah, the engagement is definitely very important. Right. So my second question is regarding actually extension from the previous Mobileye questions. So could you give us more clear indication on the boundary of collaborations? Are we going to develop on the Mobileye's domain controller, or Mobileye is going to develop on the maybe ECARX's domain controller, etc.? Thank you. Yeah, sure. I mean, our engagement with Mobileye is really quite a tight collaboration of ECARX capabilities as well as Mobileye capabilities as we implement those systems. So I think we're bringing the best of both organizations together. Mobileye certainly brings some fantastic technology in their SoCs, in their perception software stack, in their sensor set for the vehicles. ECARX brings an overall system integration capability to that partnership, supply chain capabilities as well. And we also help inject key software that's inside our portfolio in terms of its bases like the driving decision software of the vehicle as well as some parking and other functions that we bring to that overall system solution to the automakers. So we've had a great discussion with the Mobileye team in CES. I think we'll continue to work on opportunities to collaborate quite closely with them and bring great systems into the vehicle. Right. That's very clear. Thank you so much. Thank you. Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Meghan Zheng from Macquarie. Your line is open. Please ask your question. Thanks for taking my question. I have two questions. One is on our overseas business. I noticed that from this year in Europe and the U.S., the trend of the EV transition seems to start to slow. There are plans of delaying the deadline of transitioning. And also, Mercedes-Benz has been announcing the delaying plans. I'm wondering how this would impact on the growth outlook for this year to our business. And also, on overseas business, what is our competitive advantage versus the more established T1 player like Bosch and the Continental when we try to get orders in this OEM? Thanks. That's my first question. Yeah, thank you. I think that's a great question. You look at, first of all, outlook on the market, we continue to see a lot of significant opportunities in the market for our technologies. As we continue to advance in this industry, these spaces in the vehicle are definitely undergoing significant investment. I think they tend to be often focused on EVs, but not exclusively. So the digital experience inside the vehicle, autonomous driving, the software-enabled vehicle, the OEMs have tended to make those investments in the big EV platforms as they launch those new. But certainly, those same technologies are somewhat drivetrain agnostic because they provide great experience for the vehicle driver. There's a number of opportunities concerning connectivity and electrification that can help these systems work efficiently, but they're not exclusive to the EV industry. So we continue to see, as we scan the market, both across all of our markets, a very large and growing opportunity in our space. Car makers are making fairly significant investments in these technologies. I think we'll continue to do as we go through future cycles. When we look at the ECARX capabilities, I think there's a number of unique capabilities that ECARX brings into the market. As we talk with new customers, I think the first one, we highlight very frequently our full-stack solution. So as we look across us in a very tight partnership ecosystem, whether that's through joint ventures or deep strategic collaborations, we are able to take a very unique self-developed full-stack solution from the silicon all the way to the cloud services through the entire full-stack of the system capabilities. That deep understanding helps us bring a very customized, unique solution built on platforms to each customer. Today, we operate with a very broad set of customers, those that are very cost-conscious and extremely cost-competitive to extremely premium brands throughout the customers that we talk about in these calls. Having that capability and that wide breadth and built on platforms, I think, is something very unique to ECARX. The second piece, I think, is speed. I mean, we operate at an extremely rapid speed with scale and with high quality. We're able to deliver systems that drive safety, operate at an automotive capability into vehicles at a very rapid pace. We're a company that's been operating only since 2017. We've already got six million vehicles on the road. That continues to grow quite substantially. Last year, we saw a 30% growth in those number of vehicles. So to be able to operate at that speed with the number of launches in our pipeline with a strong capability, I think, is very impressive. And then you talk about scale. Again, 30% growth on the number of vehicles last year, wide variety of brands. And you see the capabilities we're bringing to the international market. These are big differentiators for ECARX as we're talking to our existing customers as well as new customers. Got it. Thanks. That's very clear. My second question is on the China's market. I also noticed that there is this fast-growing trend to have more and more advanced features installed in the cheaper and cheaper models in China. And I'm wondering, how do we think about this trend and how that impacts our business? Especially, how do we think about the competition as we move into maybe more lower-end parts of the product in the market? Yeah. And And I think we see the China market is a very dynamic market, right? This market evolves very quickly. Customers move very fast and react to the advancing trends in the industry. And ECARX, as a company, over our seven years has done a fantastic job executing in that market. And we continue to do that. There are times we conceive bringing new technologies into a vehicle within less than 12 months. And I think this is something very unique that we can demonstrate that capability and do it with a high quality and at a global quality-level certification. And this is something very special for ECARX. I think the market in China will continue to be very dynamic and diverse, for sure. There's a lot of pressure on cost. There's a lot of pressure on competition here. But ECARX has been very successful competing in that environment in our 6-7 years of existence. I think we'll continue to do very well in that environment. Got it. Thanks. I've got no more questions. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one or telephone keypad. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Michael Liu from HSBC. Your line is open. Please ask your question. Thanks, management, for taking my questions. I have two following the previous investor's questions. The first one is regarding the customer. Could you just roughly map out the model mix with our smart hardware this year in both domestic market and in global market? What is the pipeline the next few years as well? Yeah, for sure. I mean, in the environment we're in, I don't think we always get hyper-specific on launches that we see coming. But we've had a great 2023, especially kind of capped off with the Volvo EX30 launch. I think we certainly talked about the Polestar launch inside of China. We will launch that vehicle at a global scale as we go through 2024. We've already talked about that. We'll continue to see a broad set of launches. And we discussed two new customers. We will probably see at least one of them launch vehicles towards the end of this year. So we can start to get more specific on those platforms that are coming. As I mentioned earlier, we're having some great dialogue with some customers in Europe that I think could even produce launches as we go into 2025. So that shortening of the development cycle, we'll continue to see across the global market. And as I said earlier, I think ECARX has executed extremely well in that tight launch window environment. So I think we're excited to see that pressure come to the global markets and see that we can add a lot of value in our ability to deliver great solutions at automotive-grade quality at a very, very fast and rapid pace. Got it. Thanks. The second one is regarding the cost. Obviously, we note that the competition environment is very fierce this year. You touched on this in previous questions. Also, we see customers attaching more importance on the smart functions, including the digital cockpit and autonomous driving functions. But the willingness of the customers to pay for this kind of smart hardwares or softwares is not that strong. So last year, the OEMs, XPeng, they mentioned in their earnings call that they're going to cut 50% of their smart hardware of the cost. So how do we project our trajectory of cost reduction as well as the overall smart hardware cost reduction in the coming years? Thanks. Thank you. This is also a very good question. So for cost, because ECARX provides our full-stack solution covering computing platform, software, and a lot of other advanced features to our customers. So regarding the hardware solution, for sure, we will drive and we are driving our cost-down activities aggressively. So there's always no boundary about the cost of optimization. So we have a large scale. We have lots of bargaining power. We can work on the effective pricing negotiation with our suppliers. At the same time, as I mentioned earlier, we also put some protection costs into software products. All those activities can protect us from a faster cost challenge. With that, we are able to maintain a relatively healthier cost structure in our hardware solution. At the same time, we are investing heavily into our next-generation computing solutions as well. With that, actually, we can build up our price premium. We can launch those solutions firstly in the market. All those time windows can gain us lots of pricing room for us to play. At the same time, our service revenue mix and the service margin mix also play a significant part of our total business. As long as we can deliver our service to customers within a faster time frame and we can satisfy our customer in terms of those features requirements, we still can make lots of profit from service revenue. Again, with our software service and the hardware portfolio play, at the same time, driving an effective customer activity from our hardware, we have full confidence in delivering a balanced profitability in our coming year. Yeah. Maybe I just add to that. I think you also see that in our OpEx results, especially in 2023. We had this very significant growth in the top-line revenue. We continue to invest in technology and produce a lot of launches through our pipeline. And we do that under a very tight cost control from an OpEx perspective in 2023. And I think we'll get better at that as the business continues to scale into 2024. So I think we see a lot of the activities that Phil mentioned on the gross margin line, but we also see that in the engineering and technology efficiencies and investments that we're making. Yeah. We drive lean operations in our business. For operating expense, as Peter mentioned, it's a very effective control. From a year-to-year perspective, it's a 17% decrease. In parallel, we just redeploy our savings from the SG&A to our R&D and global expansion. So all those are the right approach to capture our future growth opportunity. Got it. Thanks, management. That's very helpful. Thank you. Thank you. There are no further questions at this time. I would now like to hand the conference over to ECARX management team for any closing remarks. All right. Well, first of all, thank you, everyone, for the time and the questions today. I think ECARX, we've continued to execute quite well in an ever-competitive environment. But we've done that for many years and continue to anticipate that we'll execute well and have the right focus on the growth mindset, but also making the right investments in the business to drive the right behavior in terms of profitability expansion. So I think we're looking forward to a very exciting 2024 with a number of new activities as we go forward in terms of new launches, new product debuts, as well as new customers. So thank you again for the time you spent with us today. Thank you. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.