Hello, ladies and gentlemen. Thank you for standing by for the fourth quarter and full year 2022 earnings conference call for Hesai Group. At this time, all participants are in listen-only mode. Please note that today's conference call is being recorded. I would now turn the call over to the first speaker today, Rachel Yang, Vice President of Operations for the company. Please go ahead. Thank you, operator. Hello, everyone, and thank you for joining Hesai Group's fourth quarter and full year 2022 earnings conference call. Our earnings press release distributed early today by Newswire Services and is posted in the investor relations section of our website at investors.hesaitech.com, along with the webcast access to today's call. On today's call, we have our CEO, David Li, and our Global CFO, Louis Hsieh. David and Louis will each provide prepared remarks and will conclude the call with the Q&A section. I'd like to remind everyone that our earnings call and investor materials contain forward-looking statements, which are subject to future events and uncertainties. Our actual results may differ materially from those forward-looking statements. All forward-looking statements should be considered in conjunction with the cautionary statement in our earnings release and the risk factors included in our filings with SEC. Finally, this call also includes certain non-GAAP financial measures. You should carefully consider the comparable GAAP measures. Reconciliation of non-GAAP and GAAP measures is included in our earnings release. I would now like to turn the call over to our CEO, David Li. Please go ahead. Thank you, Rachel, welcome everyone to Hesai's first earnings conference call as a public company. I'd like to first express my gratitude to our investors, partners, dedicated employees, and everyone who contributed to our successful IPO on February 9th. During our IPO, Hesai sold 10 million ADR at $19 per share, and underwriters partially exercised their overallotment option, raising approximately $192.4 million. Listing on the Nasdaq marks a milestone in Hesai's growth. We're excited to begin life as a public company and to deliver long-term value to shareholders, employees, and other stakeholders. Moving on to our operating results for the fourth quarter and 2022. We continued our strong growth momentum in fourth quarter. In September, the first company in the world to deliver more than 10,000 LiDAR units in a month. Total shipments during the fourth quarter reached 47,516 units, among which ADAS LiDAR shipments accounted for 91%. Note in December, we shipped more than 20,000 LiDAR units. These achievements are groundbreaking in the industry. In the fourth quarter, our new ADAS LiDAR product continued to win new customers, including firstly, the largest EV maker in China, and secondly, the largest China OEM, and thirdly, electric technology company, Zoox, followed in January by Seres, a leading China-based EV OEM. These were followed by a design win with DiDi's autonomous driving business. Additionally, in February 2023, the company secured a LiDAR design win for AT128 with the Li Auto on its new battery electric vehicle platform. Our successful Q4 capped a successful 2022. During the year, we proved that our mass production capabilities empower us to capitalize, develop ADAS and Autonomous Mobility. Our total shipment in 2022 reached more than 80,000 LiDAR units and accumulated and surpassed 100,000 shipped units. That represents an explosive 337% CAGR since 2020, significantly outpacing the global LiDAR market. In fact, our LiDAR deliveries and data revenues for 2022 were higher than the cumulative LiDAR unit deliveries and revenues of all eight of our U.S. public listed peers combined in 2022. Notably, we shipped more than 2x the number of automotive LiDAR units than our eight U.S. listed peers combined. The backbone of our success is our people. In 2022, we grew our talent force to more than 1,000, most of whom are on the R&D actually in engineering team, a scale significantly higher than our peers. Our success is further defined by our innovative customers and partners in-house manufacturing capabilities and breakthrough LiDAR technologies. In ADAS markets, we're working with many market-leading OEM partners, including Li Auto, Changan Automobile, Lotus, DiDi, HiPhi, Rox. In Autonomous Mobility market, where we are dominant, our customer base includes some of the most prominent global players, including world's leading robotic technology company in the U.S. Our customers also include Aurora, Pony.ai, WeRide, and Amazon's Zoox. In the robotics market, we provide products to the largest player in China, Meituan, alongside global players such as Nuro and others. Our commitment to building superior products, which also optimize performance, quality, and cost, is a key to our wins in both the ADAS and Autonomous Mobility markets. We believe advanced in-house manufacturing capabilities are critical for developing LiDAR products like ours that utilize fast advancing technologies. We combine R&D advances in application-specific integrated circuit, also known as ASICs, to drive semiconductor performance with in-house manufacturing capabilities to design, iterate, and bring the best in-class products to our customers. Our integrated in-house model enables fast development and proprietary know-how to reinforce each other, establishing a virtual cycle and a formidable competitive advantage. Model also helps us to optimize cost, deliver higher performance solutions, and make our supply chain safer. Through this model and our talented R&D and manufacturing engineering teams, topping approximately 700 staff, we developed our FT120, a solid-state blind spot LiDAR sensor with no moving parts inside, designed for ADAS series production vehicles. We plan to launch the FT120 later this year. In addition to FT120, during the course of the year, we expect to announce several really exciting industry-leading LiDAR products, but you have to stay tuned for those future release announcements. We're proud that Hesai has become the most commercially successful LiDAR company in the world. To date, we've signed 11 OEMs, six of which will be in mass production, all 11 by 2024. We're presently in discussion with several other leading Chinese and global OEMs, which we expect to add in 2023 and look forward to sharing more information with you in due course. Moving forward, we'll continue to build partners and relationships with OEM and autonomous technology companies, perfect core LiDAR technologies and manufacturing capabilities. Our growth has just begun, and our path is clear. We're optimistic about the future trajectory. With that, I'd now like to turn the call over to Louis, who will share about our financial performance for Q4 2022 and our outlooks for the rest of 2023. Louis, please go ahead. Thank you, David. First, I want to thank everyone for attending Hesai's inaugural earnings call as a public company. In its operating figures, our commercial success is evident in our financial performance. To be mindful of the length of our earnings call today, I encourage listeners to refer to the earnings press release for the 2022 and full year results for further details. Clearly, Hesai had a stellar 2022 as we extended our market leadership in LiDAR solutions, both for Autonomous Mobility and now for ADAS. Today, I will just go over the highlights of our Q4 and full year 2022, as I'd like to spend the bulk of our time together talking about our future. We achieved record net revenues of RMB 409.2 million, equivalent to $59.3 million, fourth quarter of 2022, representing an increase of 56.6% from the same period of 2021, and an increase of 22.6% from the third quarter of 2022. Gross margin was 30% for the fourth quarter of 2022, compared to 52.4% for the same period of 2021, and 0.1% for the third quarter of 2022. Net revenues were RMB 1.203 billion, equal to $174.4 million for the full year of 2022, representing an increase of 6.9% from the previous year. Gross margin was 39.2% for the full year of 2022, compared with 53% for the prior year. Many of you have asked about our gross margin profile as we enter the nascent but rapidly growing ADAS market. 2023 is a transition year for Hesai as we migrate from traditionally higher margin Autonomous Mobility of Pandar, XT, and QT to the exploding but relative structurally lower margins ADAS sales of AT and FT. To give you an understanding of the difference, our average ASP for Autonomous Mobility has been over $5,000 with approximately 50% gross margins. Compared to that for ADAS, where the ASP is expected to be around $500, digit to low double-digit gross margins by year-end. In 2022, our ADAS AT sales accounted for about 25%, $46 million, expected to and account for 40%-45% of revenue in 2023, with an expected more than 3x increase from the 62,000 units in 2022. The bulk of the ADAS shipments will be in second half of 2023, as we expect to be SOP with all at least OEM partners by Q3 2023. It will take some time for us to gain economies of scale in manufacturing efficiency and utilization, material procurement, and labor intensity to reach our long-term target of 25%-30% gross margins in ADAS for AT and its progeny. Against this very strong demand and order backdrop. Entering the first half of 2023, we are going to expand our manufacturing footprint with investment in two plants and to get both operational by Q2 of this year. Let me give you more color about this capacity expansion. First, we are excited to confirm that our new in-house manufacturing facility, Maxwell, a state-of-the-art comprehensive R&D innovation design center, manufacturing and testing complex in Shanghai, covering over 600,000 sq ft, will come online in Q2 of this year. Maxwell will expand our manufacturing cap to 1 million units in terms of annual shipments and will equip us with a full range testing capability. Second, in late Q2 or Q3, we plan to open and start another AT production line in our 300,000 sq ft new manufacturing facility in Hangzhou, which will also eventually have capacity for over 1 million units annually and be highly automated. Along with our two smaller production facilities, which currently manufacture Pandar, QT, XT, and one line for AT128, our total capacity will exceed 2 million units on an annual basis by year-end. The combined effects of product mix with ADAS increasing in revenue mix from approximately 25% to 45% and the opening of two large production facilities, which will take time to reach optimal scale efficiencies and utilization, will put downward pressure on blended growth margin percentage in 2023 but rebound somewhat in 2024. Long-term target for blended gross margin remains at 33%-35% for Hesai. Now I'd like to turn to our business outlook. For the first quarter of 2023, the company expects net revenue to be between RMB 390 million, $56.5 million, and RMB 410 million, $59.4 million, representing a year-over-year increase of approximately 57%-65%. The above outlook is based on the current market conditions and reflects the company's preliminary estimates of market and operating conditions and customer demand, which all are subject to change. This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press. If you are on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question in Chinese, please immediately repeat your question in English. For the sake of clarity and order, one question at a time, management will respond, and then feel free to follow up with your next question. Your first question comes from Olivia Xu from Goldman Sachs. Please go ahead. Hi, David and Louis. Congrats on the company's solid performance. This is Olivia Xu from Goldman Sachs. Mainly have two questions. The first one is about the partnership. We noticed that Hesai has made a breakthrough in the partnership expansion and product nomination, including BYD, Seres, and the other pure EV platforms. On the other side, the company has recently launched the L version of L7, L8. Just wondering, will it cannibalize the high-end volume and impact the LiDAR installation on the two models? In addition, is there any more information can be shared on the supply relationship of two BYD and the Seres? For example, the timeline, which car models and an estimated volume. Thank you. That's my first question. Hi, this is David Li. Thank you for the question. Let me maybe address the Li Auto one first because it's one of our largest client. Right that the LiDARs are the standard configuration for the L9, and then they are optional for the L8 and L7. For both editions, they have the AD Max, which is the one with LiDAR, and AD Pro, which is the one without LiDAR. Having said that, the L7 and L8 are larger volume products. The take rate is actually pretty decent, even today. That, that's why we're able to come up with our projections for the rest of the year based on the take rate of the L7, L8, and L9, and all of the LiDARs, that, not from all our clients. Also, one interesting note is that if you watch very carefully of the Auto L7 release, they actually mentioned that now, and by end of the year, they're gonna have more urban NOA, Navigation- on-A utopiloting functions when it's with LiDAR. Which means that the version with LiDAR will be much more valuable in terms of the, its ability to provide advanced driving functions. That was actually a very big boost on the take rate of the Max version. Of the L7. Which is extremely encouraging to know that even L7 is technically considered a more affordable version. You would assume that people wouldn't have a higher take rate for the one, the configuration with the LiDAR. It turned out that it's not entirely true. People still like it, people still buy that with the more expensive configuration because they really look forward to the driving function that will be available down the road. Also on top of it, I want to point out the fact that if when you buy a smart EV today, you're paying the price today, but you're not getting the full function yet. Lot of the functions, especially on the autonomous driving side, are being released via OTA, Over- the-A ir, to you over time. Which means that technically you pay the money already, but the value will go up over time, which is a good signal for us because that's why we believe over time, more and more people will be buying into the function as the value go up. That's why long term, we're very optimistic on that. Now, you want me to comment on the series and- BYD. BYD, right? It's confirmed that we started working with them with some of the models. Unfortunately, we don't have more information about the more models that we're in discussion with them, as some of them have not come to the decisions yet. What I could say is that, because both Seres and the BYD, it's not on their entire fleet yet. There are quite a few exciting, design wins that could come out later this year, or even some of them are very soon. We look forward to it, and we'll keep you updated on that. Olivia, this is Louis. For Seres, we do expect to ship this year. BYD is more likely the volume will be next year when their models come out. Yeah. Thank you. Does that answer your question? Yeah. Right. That's very helpful. My next question is about the implication of the recent EV pricing cut. We noticed that year-to-date, Tesla has a greater price in China, and a lot of other EV makers have to revise their pricing there as well. Given the diminishing government subsidies, it is likely that the car makers' margin will get squeezed. Just wondering, does the pricing pressure has passed to the LiDAR suppliers now? What's Hesai's response strategy towards the EV pricing cut? Thanks. Yeah. We are observing that now also already. What I'd like to point out is that if you look at the pricing cut phenomena, it's really on the more affordable part of the spectrum of the market. If you think about it, the nature of LiDAR, it's at least now and is the penetration is mostly on the more premium part of the market, especially if you think about look at Li Au to. I don't think they have sold anything that's below 300,000 RMB. It's at least from what we receive and observe, that it is much less impacted, if at all, by the pricing cut. We do expect a lot of competition on the below 200,000 level for the cars. Those are also not our typical choices for cars when they want to buy LiDAR. If you're buying a car that's like costing you RMB 150,000, you probably don't really care about LiDARs today, right? You want the leather seat and all the big screens and all that today, the batteries, right? It only becomes a much more serious interest when you're paying for, I would say, at least RMB 200,000, ideally RMB 250,000, and that's the range where people started to look for things that's beyond battery and the infotainment system, and that's where LiDAR became a symbol of intelligent driving. Yeah. I think, Olivia, for us, as David said, we're basically more in the higher end of each of these lines, so we probably won't see as much impact from price reductions at the lower end of their pipelines. For us, all six OEM shipping this year, the majority will come in in Q3 and Q4. They will be in cars above RMB 250,000, so they're less impacted by price cut competition. The bulk of the volumes will be in 2024, right? Where we expect volume to at least, you know, double or triple from 2023 levels. That's when we'll, I guess, see if the price increases will affect the demand. Got it. That's very clear. Thank you, David. Thank you, Louis. Thank you, Olivia. Next, please. Next. Thank you. Your next question comes from Tim Hsiao from Morgan Stanley. Please go ahead. Hi, David. Hi, Louis. Congratulations on the solid results. I've got two questions. First one, I think David already touched on some feedback and the observations about the consumers on the LiDAR adoption. Based on your recent conversation with car makers, is there any change, any change to their thoughts about adoption pace of LiDAR during the mounting pricing pressure and competition? Will there be any risk of near-term downgrading to the spec or of the upcoming models with more adoption of LiDAR? Actually, the car makers would be getting more aggressive to operate a spec with more LiDAR adoptions to differentiate themselves. Could you share a little bit about what the feedback from the car makers may be? Thank you. Can you repeat the question? Yeah. Tim, is your question about in our conversations with car makers, are they more or less inclined to use LiDAR for next year? Is that sort of what you're getting at? Yes, yes. Because, I think some of the car makers, they might consider to be more cost conscious and buy more the effect or more the adoption rate of LiDAR, you know. But it probably is our customers might be even more aggressive in considering to adopt LiDAR. What's the feedback of your major customers you've got so far? I think this goes in line with Olivia's question, is that our LiDAR are typically on the premium models, so it's less likely that they will cut this because it is a marketing play, right? If you have LiDAR and your competitor doesn't have LiDAR, it's actually a big selling point. In addition, these models are coming out in 2024. What they don't wanna do is their new generation models be seen as really standard models with no differentiation. So far, as far as I know, we have not seen car makers in our 11 OEMs, they say they're gonna cut LiDAR out of any models or reduce the effect of LiDAR in those models. Those models are on track. The one thing they may happen is if there's a delay in the SOP of some of these models in 2024, 'cause several of these car makers, these are brand-new models, so there is some delay, risk on that side. I haven't seen any where they actually cut the LiDAR out. Have you, David? Correct. Yeah. Yeah. Does that, does that answer your question, Tim? Got it. Yeah. Great. Thank you, Louis. My second question is about the manufacturing. Hello? My second question is about the manufacturing capability, because I think this year's important milestone will be the launch of our new plan, Maxwell. Could you please share with us the current progress of our new plan? If it's still on track to kickstart the mass production in the mid-year and all the ramp up so far still on track to meet our target? Thank you. Okay. Okay. We have, we have Sun Kai, one of our other co-founders here and chief scientist. He can answer the question, when will Maxwell be operational? Okay. For the modeling, we'll be finished Q2 this year, probably the middle or late Q2, and we'll have some automatic line by the end of this year, yeah. That's the plan for the Maxwell. Then, for Hangzhou, Tim, that will come after Maxwell. We expect to have one or two operational lines in Hangzhou. These will be for new redesigns. The existing AT128, we have one line already in Shanghai that's producing. In order to, as we said in the earnings release, our goal this year is to work on the gross margin profile since ADAS typically has a lower gross margin profile. We have a redesign of the AT coming out, and we don't wanna put it in the same manufacturing line as the current AT. The Hangzhou plant will be most likely the current plant, is to use one line for the new AT redesign that will be much lower cost, and that will improve the gross margin profile. Great. You get to stay- Thank you very much. That's why we opened two manufacturing. We don't wanna cross the two production lines. We're doing one and then one's manufacturing a later model of the same one. We will. Plus we believe we will use that capacity up by 2024 or 2025. There, you know, we're just manufacturing, we're just getting the factories ready ahead of the expected demand. Which we think is a prudent thing to do. Okay. Understood. Thank you, Louis. Thank you, Tim. Next question, please. Thank you. Your next question comes from Bin Wang from Credit Suisse. Please go ahead. [foreign language] My questions are on the ADAS client from global automaker, because we found that your competitor, Mobiltech, got a order from Toyota. Is there any chance this year we can get a similar client from the global automaker, another Toyota, for Hesai? That's number one question. Number two is about our margin. In the number four quarter last year, you said that's about 30% cost margin. Can you provide a breakdown between the ADAS LiDAR and the Autonomous Mobility LiDAR? What's your outlook for the first quarter 2023 and a full year for the two LiDAR products? Thank you. David will take the first question. I'll take the second question. Yeah. Thank you, Wang Bin. Should I be doing this in English or Chinese? English. Oh, okay, cool. Question is about the global side of the business. It'd be hard for me to directly comment to competitors, 'cause if they're right to disclose things. I wanna point out that in our definition, when we say a global deal, and we consider only from the global programs, right. When it's talking about the localization of some of the joint venture car models and all that, and we actually have some of them, but for us, it's a China deal. For global, truly global, it has to be sourced from the car models that are shipping globally, which are typically the European Americans. We are in late stage discussions with multiple, including Europe and American, that will come out in Q3 and Q4 as the final results this year. We're in the either RFI or RFQ phase of them. We are very optimistic about it for the reasons I think we explained in the past. I'll quickly repeat them. One is that this round of sourcing from the global OEMs, they're really focused on the practicality of the ability to deliver. In the past, a lot of the global peers have not demonstrated the best ability to deliver volume products as ADAS. As you can imagine, this is one of the most critical ability for any automotive vendors to do, and we've illustrated that. We shipped, more than 80,000 units in total and, I think what was the official number for the ADAS sensors? That's close to fifty- Sixty. Yeah, close to. $62,000. 60,000- Yeah ADAS sensors. That's one of the numbers that OEMs really care about today, 'cause they want to make sure you have the ability to deliver, the one evidence you can use is past shipment, and now we have it. The other one is actually cost. Historically, for the first round of the sourcing, from a few years ago from the global players, they were the smaller volume, vehicles. For that, it's probably okay, it's at a relatively higher price. Now most of them are being much more serious about rolling those configurations into more affordable, price range, large volume vehicles and in which price becomes a much more critical issue. For us, with our ability and the history of developing in-house ASICs and in-house manufacturing, we have the best ability to do low cost ADAS sensor at a reasonable margin. That's what they care about. That's why we have very high confidence that at least some of those deals will come to us, and hopefully we'll be announcing that soon. All right. Thank you, David. Great questions, Wang Bin. On the gross margin side, in 2022, our gross margin for the Autonomous Mobility side was over 50%. On the ADAS side, it was less than 5% because we were just ramping AT, and it only, it was only for several months. Remember, the production line of the AT128 that's currently in effect has capacity for 300,000 units a year. We only manufactured 60,000 in, and delivered in 2022. This year for Q1 and Q2, utilization rate will not be quite as high. By Q3, Q4, it will ramp up. We expect to ship at least 200,000 AT plus FT units this year. It will get better with the gross margin profile. For this year on AT, it will go up from under 5%. By the end of this year, we expect the gross margin to be in the high single digits to low double digits, so probably 9%-13% as we exit this year. The long-term gross margin we expect for AT should be around 30% to a little bit over 35% as we redesign the model and as we go to mass production. Remember in 2024, we have 11 OEMs shipping in AT, the volumes will be just that we can get the higher gross margins. On the Autonomous Mobility side for 2023, this year, we are undergoing in Q2 and Q3 a price reduction on the blended basis for Pandar. The ASP last year was about RMB 13,000 for Autonomous Mobility products. This year, we expect that number to be around RMB 9,000. Because of the price cut, it will put some downward pressure on the gross margin profile for probably Q2 and Q3 of this year. Q1 should be okay, but Q2, Q3, it will have some negative impact. I wanted to also say is that we are addressing this as well. We will have a lower cost Pandar model coming out in the second half of this year that will significantly reduce our production costs, and we'll still be able to maintain our margin at around 50% for this product at scale. That will mean by end of the next year, the margin will bounce back. As you asked earlier, our long-term gross margin target remains unchanged at 35%, where we have Autonomous Mobility at between 45% and 50% and ADAS at probably 27%-33%, you know, with a target of 30% or so. That blended number should come out at 35%. Nothing has changed on the long-term perspective. On the transition for this year, the first half will be slower. It's always a seasonal slower time for us, Q1, Q2. In Q3, Q4, the margins should begin to ramp up again. Does that answer your question, Wang Bin? Sure. Can I have a follow-up? I think you're speaking quite recent in the time sense that you still call the fourth quarter. Can I assume that your possibility to secure the pipeline from 90% is very likely? Can I understand feeling with you? Sorry, I didn't hear that. Repeat. Yeah, repeat. I mean, you already give the timing for the third quarter and the fourth quarter to potentially have a conclusion with global client. That's why can I assume that the possibility to announce a global ADAS data customer is around 90%, very high? What's your chance of getting global ADAS announcement in the first half of? Of first half? You meant first half of this year, Wang Bin? No, no, no. I mean- So we're- Yes or no, whether this year you will announce a client from global automaker, the possibility is the ranking from 1%-100%. This year, I think for the. Yeah, we have. For the year. We have actually multiple European and, at least one, American major design decisions coming out by Q3 and Q4. The chance of getting more than one, at least one, is very high. Okay, thank you. Also, Wang Bin, I will remind our investors that the adoption for China is actually more rapid than the US, right? You know, we have 11 Chinese OEMs. The volume in China will be four or five times the volume for the US in the next and Europe in the next two or three years. You know, we went after the, where the market is, and the market is China today. We went after it, and we have 11. We have a dominant share in China already. On the global side, the game is just beginning in 2023 for the volume production in 2026, 2027. We are fighting, and we are in the game, the results won't come out till second half of this year. Okay. Also the actual shipment will only. Starting in 2026 and 2027. Yeah. Yeah. Earliest at 2026. For the next two years, it's more important to focus on our China deliveries, 'cause that's where the revenue drivers, and that's where the know-how and the production will come from, and that's where the margin will come from. That's why you can see the reason is we completely dominate our global peers is because they have no volume in production. We're larger than all eight combined because we are winning China, whereas that's where the ballgame is. You can only play where there's a game. The game for North America and Europe really won't begin. You can just start scoring in 2026 and 2027. Okay. Thank you so much. Thank you, Wang Bin. Next question, please. Thank you. Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Paul Gong from UBS. Please go ahead. Hi. Thanks management for taking my questions. I have two questions. The first one is, you mentioned that the mechanical LiDAR has a more than 50% gross margin, while the ADAS LiDAR has less than 5% gross margin in 2022. From the revenue of the Q4, is it true to, is it fair to assume the revenue mix or revenue split is roughly like 50/50 between the Robotaxi LiDAR and ADAS LiDAR? Is that a fair estimate of the revenue splits? For Q4, that's pretty close. For the whole year, ADAS was 25% and Autonomous Mobility was the other 75%. Going forward for, which is now in 2023, ADAS should be 40%-45% of revenue in this year. As I said earlier, the bulk of the units will come in Q3 and Q4 as new models are released. That's a seasonal factor of our business, is that Q3, Q4 typically are much larger quarters than Q1, Q2. Q1, the reason the gross margin will be better is because there are more Autonomous Mobility shipments in Q1. Okay. The other, quick point I wanna make on the g ross margin side is that it's true that last year's ADAS gross margin wasn't as it'd like to be. Remember that this is the first time we're shipping a larger volume ADAS. Right? If you compare that number to all the peers, that's still not crazily bad considering most of the people are having really minus gross margin. Paul, I'll give you a stat so you understand the how fast we are working on the cost side. The average COGS for AT in 2022 was $700. The average COGS today is under $500. Okay? As the ASPs come down, 'cause we have contracts, the cost is also coming down commensurately, if not faster. There's a transition period, right? Another quarter or two to ramp up the new production line in Hangzhou for the new AT. That has significant price reduction versus the current version that is in Shanghai. That's why there's a slight lag in the gross margin profile as a new line comes up, and then it needs to scale. I think this is the right decision for us. We invest this year, and 2024 should be a blockbuster year for us in terms of the deliveries, right? I mean, we expect to be delivering, you know, 600,000-800,000, even maybe close to 1 million units in 2024, when our competitors aren't even at, you know, 50,000 yet. We're basically trying to extend our lead and key is manufacturing. Understood. Understood. Just to double-check, you said, for the full year this year, the ADAS LiDAR is going to contribute roughly 40%-45% annual. Is that right? Correct. About RMB 150 million-RMB 120 million. Yes. Okay. The long-term margin for the Robotaxi LiDAR is 45%-50%. The long-term target for the ADAS LiDAR margin is 25%-30%, right? These are the right numbers to recap, right? Yes. That's about correct. Okay. Okay. Yes, that's correct. Okay. If you blend it out, because ADAS is growing faster, it'll be about 35% target. Understood, understood. My second question is regarding the Q1 guidance. I understand right now the ADAS LiDAR is mainly from the Li Auto, I think the Li Auto's guidance, somewhere like 10%-20% quarter-over-quarter of volume growth in Q1 versus Q4. Even though maybe the mix is going to be more skewed towards L8 instead of L9. That is basically means the Q1 versus Q4, your guidance is also flattish. That basically means flattish in both the ADAS LiDAR as well as the robotaxi LiDAR. Is that the right way to understand this? Yeah. To be honest, that's not entirely correct for us. For Q1. No, because there's nothing you didn't know. In Q4, we had higher pricing for ADAS LiDAR, we shipped more units. That's why we shipped 20,000 units in December. Q1 there will be a slight slowdown in ADAS for January, February as those December units are used up. Mid-March we'll pick up again. I would expect my current forecast is only about 30,000 ADAS units in Q1. Robotaxi will have a very strong Q1. That's why you see the guidance where it is. You say it's flattish over Q4, you have to remember, Q1 is seasonally our slowest quarter because Chinese New Year, and also it's, you know, there's usually a leg effect. Q4 is the biggest quarter. Q1 and Q2 are slower. For us to be flattish over Q4 is quite an accomplishment. It's over 60% year-over-year growth. Paul, you've known me for four years, five years. You know I guide conservatively. Understood. Understood. You know, it could be we will have our record quarter, the biggest quarter of our history. Understood. In view that the mix is going to be more skewed towards the Robotaxi or LiDAR in Q1. Only in Q1. Yeah. That also means Only in Q1. The margin profile would be even better than Q4. Yeah. Yeah. That's what I told you earlier. I said that already. Okay. So. Okay. Sure. Q2, ADAS takes over. Q2 is when a price reduction in the Robotaxi LiDAR takes effect. Q2 then will have a negative impact on the gross margins because the highest gross margin product is taking a price cut before the new design goes into effect in Q4. There's a two quarter impact on the gross margin from the robotaxi because of a price decrease, whereas the reduced price model, cost model won't come in until Q4. That's why I'm letting you guys know ahead of time, so you properly model this. It's a short-term blip, but it's important that we don't misguide, mislead you. Yeah. That's very responsible and very transparent guidance. Rhank you so much for the color and- You know me, I tell you straight, good or bad. Okay. Okay. Thank you so much. Thank you, Paul. That is very helpful. Yeah. Thank you. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. We'll now pause a moment to allow for any final register. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks. Okay. Thank you once again for joining us today. If you have further questions, please feel free to contact our investor relations through the contact information provided or Piacente Financial Communications. Thank you. Thank you. This concludes today's conference call. You may now disconnect your line. Thank you.