Hello, ladies and gentlemen. Thank you for standing by for Hesai Group's third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Please note that today's conference call is being recorded. I will now turn the call over to our first speaker today, Yuanting Shi, the company's Investor Relations Director. Please go ahead. Thank you, operator. Hello, everyone, and thank you for joining Hesai Group's third quarter 2023 earnings conference call. Our earnings release is now available on our IR website at investor.hesaitech.com, as well as via newswire services. Today, you will hear from our CEO, Dr. David Li, who will start the call with an overview of our recent updates. Next, our Global CFO, Mr. Louis Hsieh, will address our financial results before we open the call for questions. We also invite participants to view the slide that we have prepared for part of our discussion today. This doc is available on our IR website at investor.hesaitech.com in the Financial Filings Quarterly Results section. Before we continue, I refer you to the safe harbor statement in our earnings press release, which applies to this call, as we'll make forward-looking statements. Please also note that the company will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported on the GAAP in our earnings release and SEC filings. With that, I'm pleased to turn over the call to our CEO, Dr. David Li. David, please go ahead. Thank you, Yuanting, and thank you everyone for joining our call today. We're delighted to report that our third quarter financial performance surpassed our expectations. Our quarterly net revenues rose to reach another record high, and our total delivery doubled year over year. Both metrics outperformed our initial projections. We're also thrilled to announce that we successfully maintained a gross margin of over 30% in the third quarter, despite the challenges posed by the transition and upgrade phases for both robotaxi and ADAS products. The transition of ADAS products is now fully wrapped up. This accomplishment was made possible through exceptional efforts, as well as our robust manufacturing, engineering, and supply chain optimization capabilities. As a result, we not only accept that the dip in gross margin at the lower end of the V-shaped trajectory we initially anticipated at the beginning of the year, but it made a direct leap into a stable long-term gross margin instead. Upon careful comparison with our six U.S. listed peers using publicly available information, we can proudly say that our performance metrics have excelled across entire spectrum. This includes stellar achievement in revenue scale, delivery, market share, and gross margin. Remarkably, we have maintained a robust balance sheet throughout this process. Of particular significance is the fact that we have achieved positive operating cash flow for the third consecutive quarter, totaling $ 121 million, $17 million, for the first nine months of 2023. This places us as the sole standout company among the peers to achieve this feat, demonstrating our unwavering commitment to operational efficiency amid continuing growth. These financial milestones are a testament to our devoted team's hard work and underscore our steadfast dedication to achieving a long-term, sustainable growth and profitability. Let's dive into the third quarter business update, starting with notable ADAS design wins. We're making significant strides on the domestic front. In the third quarter, we achieved a global milestone by proudly announcing the first of its kind series production design win from our long-range, ultra-thin, in-cabin ET25 LiDAR with FAW Group, one of the top OEMs in China, for the next generation EV models under their prestigious Hongqi brand, defined by quality, luxury, and safety. ET25's revolutionized in-cabin placement protects the LiDAR unit itself from dirt, grime, and well, allowing OEMs to design car models with diminished aerodynamic resistance and sleek, aesthetic interiors. Fueled by our next generation, vertically integrated, high-performance module, ET25 has emerged as the in-cabin LiDAR forerunner in terms of range detection, achieving an impressive 250 m at 10% reflectivity rate. This success of this new design win with FAW Group signifies robust progress in the commercialization of this in-cabin product, and the market immense leap forward towards its mass production, scheduled to materialize by the first half of 2025. Furthermore, we recently broadened our client portfolio and secured exclusive partnerships, including multiple new design wins with Great Wall Motor, one of the largest automaker in China, as well as Leapmotor, Li Auto, and the Neta, Neta Auto, two leading EV automakers in Chinese market. Their new EV models will feature our flagship AT Series LiDAR, are set to debut starting in 2024 and 2025. It is noteworthy that among these recent design wins, several of them have prior engagement with our industry peers. Their choice to switch to our LiDAR products for certain existing or future models is a strong endorsement of the superior performance of our high-quality LiDAR products and our proven record of timely delivery.... We're also excited to witness a rising trend where more OEMs are making the switch over to partner with us, while none of our existing customers have made the move to a competitor. With these recent partnerships, we have secured design wins with 14 OEMs and Tier One suppliers, including the top five OEMs in China, across over 50 vehicle models, a robust testament to our global market leadership. We eagerly look forward to contributing to the fulfillment of these automotive manufacturers' vision of creating more intelligent and safer vehicles. In international development, we're delighted to announce that we are currently deeply engaged in nine RFI and RFQ discussions with six leading global OEMs from North America and Europe. While none of these were slated for conclusion in the third quarter, we expect three RFQs to be finalized in Q4 per customers' projection, including one from global OEM and two from global OEM's joint ventures in China. It's worth noting that these vehicles are not exclusive to the Chinese market. Some of them are intended for global distribution. For two of these global OEMs, we have attained supplier qualification status following extensive audit procedures that include evaluation of the product quality, production line, supply chain, certification, financial stability, and other essential aspects, complemented by multiple rounds of site visits. We are enthusiastic about the potential partnerships that may emerge, and we look forward to sharing more exciting news and development in the near future. In addition, we have broadened our collaboration with the prominent European OEM mentioned in our last earnings call, including additional strategic development program focused on research and development of integrating our cutting-edge lidar technology into a multi-sensor package, targeting car models with SOP dates in 2028 and beyond. This expansion marks a deepened and reinforced partnership with this esteemed OEM, underscoring our acknowledged technical excellence and strategically positioning us for potential future design wins for them. As I highlighted in my previous quarterly update, development programs of this nature are an integral to our international market strategy. They provide us with distinctive opportunity to showcase our technological prowess and engineering capabilities for OEM customers before they make final decisions regarding vendor selection. Given our accelerating number of global and domestic OEM design wins, it is becoming clear that OEMs prefer Hesai LiDAR's superior performance in range and resolution and higher quality to that of our competitors' offering. Next, I'd like to share an update on our manufacturing and the product enhancement. As you're aware, Hesai is dedicated to expeditiously advancing new products towards the SOP phase. In September, we celebrated a new milestone with our FT120, the world's first fully solid-state blind spot LiDAR, to attain SOP and to be installed on a series production vehicle model, Polestones 01, the first full-size luxury SUV model from Rox Motor. By harnessing the advantages of the FT120’s ultra-wide FOV, field of view, and the minimum blind spot, coupled with our flagship long-range AT series LiDAR, the resulting car model features a powerful 3D high-precision perception system, providing smarter and safer driving experience across a wide range of road scenarios. Turning our attention to our AT series LiDAR, in the third quarter, we officially launched AT 128 P model, the upgraded iteration of our flagship AT128A long-range LiDAR. AT 128 P boasts an impressive set of improvements, including range extension to 240 meters at 10% reflectivity rate, higher resolution, enhanced point cloud regularity, and a 20% reduction in power consumption. Achieving a seamless transition from SOP to full-scale production at our Hertz Center in Hangzhou represents a momentous achievement that strategically positions us to leverage economy of scale through the highly automated production line in this facility, which is specifically tailored for the mass production of our mature products. We're now poised to reap the rewards of improved cost efficiency, with substantial volume shipment expected in the fourth quarter of this year. The success of our recent product upgrade and seamless ramp-up production at Hertz Center not only reflects our unwavering commitment to meeting market demand, but also stands as an invaluable learning experience. This endeavor has provided us with crucial insights and knowledge that will play a pivotal role as we contemplate expanding our production capabilities in the future. Moreover, it has strengthened our present market leadership in LiDAR deliveries, positioning us for sustained success. By leveraging our in-house manufacturing capabilities, we are well prepared to innovate and thrive in the dynamic landscape of ever-evolving industry... to share what we have recently completed, the construction of our R&D and in-house manufacturing facility, Maxwell Center, located in Jiading, Shanghai. In addition to actively preparing to produce our new fully solid-state FT120 LiDAR, this facility is now equipped with spearhead research and development of our next-generation LiDAR product. We've established 90 functional and performance testing programs, with plans to scale this number to 100 in the near future. The seamless integration of R&D activities and the production processes in this state-of-the-art facility, not only amplifies efficiency, but also expands our capability to introduce groundbreaking solutions to the market. We're enthusiastic about the potential this facility unlocks, driving our research initiative and enhancing the overall quality and time to market of our future product offering. To summarize, we steadily and effectively navigated our product transition during third quarter. This triumph, along with stronger-than-expected quarterly revenue, deliveries, and gross margins, put us on track for a strong finish to the year. Our continuous run of design wins and development programs from leading domestic and the global OEM is not just a remarkable feat, it's a resounding testament to our market leadership and strengthens our foundation and enduring growth. Our steadfast commitment to performance, quality, safety, and reliability will continue to guide our endeavors as we remain dedicated to advancing the cause of autonomous transportation by enhancing safety systems and saving lives worldwide. I'll now turn the call over to Louis to share more details on our financial performance and outlook. Louis, please go ahead. Thank you, David, and hello, everyone. Let's go through our operating and financial figures for the third quarter. To be mindful of the length of our earnings call today, I encourage listeners to refer to the third quarter earnings release for further details. We are pleased to see that our net revenues exceeded the top end of our guidance, increasing 33.5% year-over-year, reaching another record high of RMB 446 million, $61 million. We achieved this growth against the high comparable third quarter last year, which benefited from the bounce back after the Shanghai COVID lockdowns in the second quarter of 2022. Deliveries outperformed as well, more than doubling year-over-year to over 47,000 units in total, further solidifying our leading position in the global LiDAR market. In terms of gross margin, I would like to remind you that at the beginning of the year, we anticipated a simultaneous product transition for multiple products before we could fully benefit from economies of scale. Hence, Q2 and Q3 were designated as a product transition phase, and we are expecting a significant drop on gross margins, forming a V-shaped pattern. However, our gross margin for the third quarter of 2023 reached 30.6%, significantly higher than our earlier guidance, driven by continuous improvement in our manufacturing cost structure, as David just mentioned. Continued robust demand for high-margin autonomous mobility products also contributed to the quarter's margin uptake. As a result, both Q2 and Q3, which were previously considered as a product transition phase, has significantly outperformed our initial projections. Our relentless efforts to improve manufacturing scale and optimize cost structure also led to our unmatched financial strength in the global LiDAR industry, marked by our third quarter of positive operating cash flow, CNY 47.6 million, $6.5 million. Our robust year-to-date performance positions us to continue to advance strong our path toward profitability and achieve sustainable long-term growth. Now, turning to our financial outlook, where we expect a strong performance. Our robust third quarter results bode well for our seasonally strongest fourth quarter. For the fourth quarter of 2023, we expect net revenues to be between CNY 535 million, $73.3 million, and CNY 555 million, $76.1 million, representing a year-over-year increase of approximately 30.7%-35.6%. We are pleased to share that with the shift toward a more optimized AT128P product, we are now entered a mature stage of production for ADAS. Consequently, we anticipate a high level of predictability for ADAS in the future, characterized by stabilized manufacturing processes, controlled cost structure, and well-managed supply chain... We take pride in having overcome the challenges posed by the transition process and navigate it swiftly and carefully, thanks to our outstanding capability to in engineering, development, and adept supply chain management. We are delighted to announce that we are on track to deliver on our target of 220,000 lidars in total for 2023. In fact, we are seeing growth adoption of lidar systems equipment with lidar by OEMs globally. We anticipate this momentum will accelerate into 2024. For this reason, we expect our lidar volume to more than double to approximately 500,000 units next year. Based on our customer order forecast, by the end of 2024, we anticipate 13 ADAS OEM customers will reach SOP, expanding our portfolio to include over 40 SOP vehicle models. As of now, we have secured design wins with 14 ADAS OEMs, covering over 50 vehicle models in total, and we expect these figures to climb significantly throughout 2024. Therefore, we reaffirm our annual revenue target of RMB 1.8 billion, approximately $250 million, in conjunction with a group-level blended gross margin of 30%-35% for full year 2023. By December, we anticipate achieving a monthly delivery rate of 40,000 units, positioning us well ahead of the competition in the global lidar industry. The above outlook is based on our current market conditions and reflects the company's preliminary estimates of market and operating conditions and customer demand, which are all subject to change. In summary, while the third quarter was a bridge quarter, we exceeded our own performance expectations in terms of financial and secured major design wins, setting us apart in the market and laying a solid foundation for further growth and development. Bolstered by the momentum we've generated, we are eagerly looking forward to the exceptionally promising fourth quarter as we continue our journey toward profitability. Before going into Q&A, I'd like to take a moment to add my personal opinion on Ouster's tactics and behavior towards Hesai. Specifically, I want to address the recent national origin-based smear campaign of false claims being made or directed by Ouster and other competitors against us. A point-by-point discussion of our competitors' fabricated claims regarding Hesai's lidar technology and possible intended uses, and Hesai's responses can be found in the company's October 12, 2023, press release, available on our website, and in presentation available on Hesai's IR website at investors.hesaitech.com in the financial filings quarterly results section. Ouster and its media and lobbying agents have attempted to discredit Hesai technology and business practices, seeking to ban Hesai products from the U.S. marketplace, relying primarily on baseless IP infringement claims and exploiting heightened China-U.S. geopolitical tensions. I find this line of attack focused on a company's national origin, deplorable and contemptuous. Ouster's claims are unsubstantiated, and Hesai denies all allegations and innuendo by Ouster. Ouster has spent $ millions on litigation expenses and lobbying fees on Capitol Hill in a desperate attempt to portray Hesai as a Chinese company that steals American IP and is possibly working with the Chinese military to undermine U.S. national security by potentially using our lidars to spy on Americans, launch cyberattacks, and aid the Chinese military in intelligence gathering. All are patently false. These underhanded tactics are the actions of a desperate company that is unable to compete effectively on the merits of its products in the lidar marketplace against Hesai. Frankly, Hesai lidars are preferred by customers because they perform much better range and resolution and are of higher quality than Ouster's products. As a result, the Ouster Velodyne combination has seen several years of declining revenues, dwindling lidar shipments, shrinking gross margins, and mounting losses. Losses of $335 million for the first nine months of 2023 on just $59 million in revenues alone. This is all reflected in declining global autonomous vehicle lidar market share, 1% in 2022 for Ouster, compared to Hesai's market-leading 47% share, according to Yole Intelligence. Ouster's precipitous share price drop of over 95% from its highs level several years ago. During the ITC investigation, Ouster's desperation became very clear. Earlier this year, Ouster Velodyne attempted to divest the litigation settlement and patent cross-licensing agreement entered into with Hesai, which is at the heart of the Ouster Hesai IP case. Is to try to divest it into a separate legal entity, Adapt Vision Holdings, LLC. Then Ouster claimed it wasn't bound and did not have to abide by its own contractual obligations contained therein, including the agreement's patent cross-licensing provision, allowing each side to use the other's patent LiDAR, LiDAR IP for 10 years and not to sue provision, designating arbitration as the dispute resolution mechanism. Obviously, Ouster knew the agreement was a major, major liability in their case. The ITC judge saw right through Ouster's legal sub-subterfuge and would have none of it. She ruled Ouster is an affiliate of Velodyne by a merger, so Ouster could not escape its legal life obligations simply by transferring the agreement to a new entity. If only things were just that simple, spin off the contract obligations you don't like and keep the ones you do like. In this bizarro world, contracts would cease to have a commercial value whatsoever. She then went on to grant Hesai's motion to terminate in the ITC case. As an American, I find Ouster's desperate national origin-based xenophobic tactics of attacking Hesai with baseless, stereotypical allegations and innuendo, repugnant and antithetical to American principles and values. In my opinion, such tactics and behavior should not be tolerated. Simply put, I believe Ouster's smear campaign against Hesai is downright un-American. 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 star two. If you're 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 to management in Chinese, please immediately repeat your question in English. For the sake of clarity and order, please ask one question at a time. Management will respond, and then feel free to follow up with your next question. Your first question comes from Tim Hsiao with Morgan Stanley. Please go ahead. Hello, good morning. Thanks for taking my question. So, I got a couple questions. The first one is about the growth opportunity, because over the past quarter, we noticed that in China, more and more EV makers are providing the so-called urban navigation on autopilot NOA functions on their reflection models, and claiming that as one of the key selling points into next year and the year after. So, just want to know that based on the company's project pipeline, have you seen that the LiDAR adoption at an inflection point might start kicking off from next year? So in the meantime, to get broadly adopted on not just the higher model we saw today, but also the mass market and mid-range models, would Hesai consider undercutting the competitors' prices more aggressively to capture the first wave of function upgrade? Especially, we noticed that some of our competitors are still suffer from supply constraints. So that's my first question. Thank you, Tim. This is Louis. Your point is very well taken, and I think that's exactly what is happening. So as you... You know, our largest customer, Li Auto, is pushing aggressively on urban NOA, and I think the take rate will continue to climb into 2024. And we've seen that across the high-end models from most of the new EV companies like Li Auto, NIO, Xiaopeng, and BYD. And so they, they're leading that area. The other ones are coming in behind, and we're very pleased with Hesai's market share gains. I think we have 14 out of the 17 OEMs in China, the largest ones, and so we're very pleased with these market share gains. We do have the ability to lower price, and in a Tesla-style strategy, it is something we will consider for 2024, and that's why you've seen us take up our numbers significantly. Does that answer your question? Yes. Yes, that that's great. My second question, I think Louis, you just provide additional details and comment about the dispute with the global players. But just want to follow up on that. So after ITC officially terminated the patent infringement investigations, I think it was brought up by Ouster. So do you think that's- Yeah Gonna help us actually increase Hesai's global awareness and then make global OEM and carmaker feel more confident and comfortable to co-work with us? Or, do you think there could be any likely more dispute coming through with the group of global LiDAR makers, as you just mentioned, that might actually urge the global players or global car makers to adopt a wait-and-see attitude? So will the car maker become more aggressive to place the order to Hesai, or basically they will tend to be more cautious in the near term? So could you share your, your view with us? Yeah. Thank you, Tim, this is David. This is a great question. I think it's very important for people to see evidences on a lot of the IP acquisitions. If we briefly review the history, we had a cross-licensing with Velodyne, and then Velodyne sued Ouster, and then Ouster sued us. And then, of course, it's in the competitor's best interest to say that we believe Hesai infringes us, right? But then in the end, we have to look at the rulings of the judges. So this termination is very important to us, and it also shows that our ability to defend ourselves at the international court level, and also it verifies that we decline all the accusations. And then I definitely believe the global OEMs and all the customers are feeling much more informed and confident to go with us. In the past, while there is ongoing litigation, there's always concern. But whenever there's strong evidence in favor of us, it further verifies that we have the strongest leadership, not only in the revenue shipment, but also in the intellectual property. I think, just to add to David's comment, I think the global OEMs will feel more comfortable selecting us. You have to remember, there has been no selections made by any global OEM so far this year on the ADAS side. The ones that were in the past were, you know, two, three, four years ago, those selections. So we're, definitely in the hunt and always in the top one or two for these globals, but they have not made official- Correct. - determinations at this time. Yeah. That's the way we are. But you can be rest assured that based on our feedback, our LiDARs are the best performing, bar none. Yeah. So I think it's just a matter of time, and we are working those global OEMs. Yeah, you know, we wouldn't know whether some of the, the delayed decision was because of IP or not. Of course, that we don't have evidence for it, but we do know that getting this out of way, out of the way, is extremely helpful for people to make a decision purely based on performance and the quality of a vendor. Yeah. So Tim, you need to understand that all these LiDAR decisions made in ADAS this year all go to us, right? So, it's a, it's a testament- Awesome ... to the quality and the performance of our products. Thank you. Got it. Thanks for all the additional callers, David and Louis. Just, just one last question, if I may. Because I noticed that during the presentation just now, I think Louis mentioned that we saw the increasing shift to AT128 to AT128P, because I think the quarter results actually surprised us on the OpEx- the, the margin surprised us on the OpEx side. So could you share a little more information about what the sales mix of AT128 to AT128P in fourth quarter? Yes. And, uh- Yeah ... when do you expect the major customers to fully upgrade their LiDAR to Pro? So if that's the case- Yeah ... could we see the further or more meaningful margin improvement in the following quarters? Yeah, that's a great question. So in Q3, the mix of old one, AT128 was 75%. AT128P, AT Pro or P, was 25%. It will flip in Q4. In Q4, AT128P, the AT Pro version, will account for 75% of shipments, and the older AT128 will be about 25%- So- as it slowly phases out. Yeah, I want to point out that I think it's a, we call it AT 128 P- Yes ... as opposed to Pro. I think the word Pro in different industries sometimes means better, sometimes it means an inferior product than the original one. In our case, this is a major upgrade with better range and better accuracy, better point cloud density, and lower power consumption. So it is a major upgrade. That's why we decided not to call that a Pro, and really because it's a, if anything, it's a max version, not Pro, so. It can be the LiDAR. Right. So we don't want people to confuse. Okay. Just for the record, we will call that AT128P. So it'll be 75% in this quarter, Tim, Q4. AT P. Got it. Version. Got it. Super clear. Thanks for sharing all the details and looking forward to more exciting upgrade in the following quarter. Thank you. Thank you. Thank you, Tim. Your next question comes from Jeff Chung with Citi. Please go ahead. Hi, good morning. This is Jeff from Citi. So my first question is about the new shipment guidance that Louis made in the presentation on around 500,000 units lidar next year. So my understanding is the previous guidance was a 400,000 unit next year. So did the company just upgraded the sales guidance in the next year? So this is the first things I want to check, and if yes, why? And was that due to the new shipments and the new customers? This is my first question. Yeah. ... Then, separately, Louis also said the 40,000-unit shipment in a single month, December. Which means that, by the end of this year, we can achieve a 480,000-unit annualized rate. So this is very close to the 500,000 units shipment target next year, which means that, we do not need to invest much on CapEx. This should result in a very strong cash flow generation into 2 to 4. So I just want to check, this. Those are my first questions. Yeah, I think the upgraded guidance on the delivery numbers was from several things. I just answered was one was on the adoption of Li Auto is pushing very hard on adoption of city or urban NOA, and that's going to push volumes up significantly. You also saw Li Auto take up their forecast for 2024 to 650,000 units. So that also helps us as the adoption rate goes up. When you get close to level three, it's almost inevitable you have to have LiDAR. And so that's why, as we said, we've been saying for a while, as these OEMs, especially the ones who are way ahead of the game in software, are going to adopt city NOA and other advanced features, LiDAR will become a must. It also includes new wins like Great Wall Motor. Great Wall Motor has five models with us, so that wasn't accounted for last year, I mean, last quarter. All those models will debut SOP in 2024, is the schedule. Then you've seen upgraded numbers from our existing customers, as we said, plus new wins, and that doesn't account for wins we expect in Q4. We have another two or three that will come in in Q4. So basically, that's why the uptick. I think 500,000, honestly, is probably conservative, but that's, as you guys know, is my nature. Second point is on the... You had a question? Sorry, Jeff. So the question is, the other question is the CapEx. Yeah, CapEx, we are. We have two factories now, right? The Hertz factory has one line. It can hold three or four lines. So the first line in December is an unusually high month because it's pre-built for the Chinese New Year. So it's always going to be our highest, or typically is our highest delivery month. And so that's why. So it probably will not be as high in January, you know, in front of Chinese New Year. So I think it's typical, but we're fine on the CapEx side, but we will also. CapEx will not necessarily go down because we do have plans to build overseas plants as well. So, you know, in the plans is one for Southeast Asia and also one for North America to service our global customers. But we're in a strong cash position, right? When we IPO, we're $450 million. Today, we're $440 million. Yeah. Uh, great. The other thing is- Yeah. So- Go ahead. So the other comment I want to make is that the current estimate could be an underestimate, and our customers are very bullish. Quite a few of them are very optimistic about their take rate and shipment volume in the coming year. And if you think about it, as a vendor, the last thing you want to do is not prepare for that. So which means that internally, we need to be prepared for a volume that's higher than our current estimate. But that's always a good thing because a lot of the investment on the infrastructure, the construction side has already been done, so it's very limited additional investment, but the volume could go much higher than what we expect today. Jeff, don't forget, the 500,000 unit capacity for Hertz line one means one shift. We could add a second shift if necessary. So I think we're fine as far as capacity goes. Great. Yeah, that's excellent. And, Yeah, but also- Yeah. Okay, Kai wants to say something. So, Jeff, and also the real demand from some of the customers next year, for some months, their demand is well above 50K units a month. So that's why we needed to prepare for the new line. Well, that's fantastic. And my second- It's a high-class problem. Don't worry. Sure, sure. That's great. And my second question is about the fourth quarter GB margin guidance. Could you give us some colors? Given that, number one, we observe the third quarter blended ASP actually went up by about 10% Q-over-Q. So I'm just wondering what was the mix of the robotaxi-related LiDAR in 3Q, and how does this should further ramp up in the fourth quarter? And could we challenge the 35%-40% GB margin in a single quarter? Thank you. To be honest, if we challenge it, it'll be at around the 35 market-mark, but our current forecast is 32%-34% gross margins for Q4. The reason Q3 was better is because it was more of a autonomy mobility quarter, right? I mean, the ADAS units were only 40,000. The ADAS units in Q4, our internal forecasts are double that. So ADAS will typically have a slightly lower margin than the robotaxi business, but because of the new upgrade and the manufacturing facility at Hertz, it actually-- the margin is quite good. So if you remember back to the beginning of the year, we forecasted that ADAS margins, gross margins, would fall in somewhere between 9%-13% for this calendar year. Because of the Q4 transition to ATP-... We will hit that. We'll be squarely up in the double digits. So everything is on track, and then next year, those numbers will go up as we hit scale. So you can count for about 32-34 as our internal guidance. Great. Thank you. There is less. Yeah, actually, I forgot one more point. There's less robotaxi revenue in Q4. That was originally forecast. So this is an ADAS quarter. So the fact that we can take up margins is actually pretty, pretty amazing that we can take a margin even in an ADAS-heavy quarter. Thank you, Louis. Your next question comes from Tina Hou with Goldman Sachs. Please go ahead. Thank you, management, for taking my question, and congrats on the very strong quarter of results. So my first- Thank you. A set of questions is relating to price. Yeah, so first of all, I’m just wondering, how much is the price for ATP versus AT? Is it- Yeah. more expensive product or similar or? So it's more- It's in a similar range, because it's a major upgrade. Okay, got it. And then the second one related to price is obviously great to see so many new OEMs are taking up LiDAR, but we also know that the price competition is super intense, especially in Chinese market, and then a lot of the OEMs are loss-making. So just wondering, like, how much of a potential price cut are they looking at in order to adopt LiDAR? I think on the ADAS side, we are planning a price reduction in 2024 at the request of our, in... Yeah, so I think it's the price decline is always requested by the customer, and we do work with them. But it's at a scale of a very low number because really, in the end, it's a decision as a trade-off between the performance and the quality. A lot of the competitors will want to try to offer a lower price, but in the end, if your product cannot ship or doesn't meet the quality and the customers cannot use it, in the end, it's the passenger's safety on the line. Understood. And another question, I guess, related to price is that obviously now it's more like higher-end vehicles or brands that are adopting LiDAR, but in the mid to longer term, we believe that autonomous driving or ADAS is gonna be, like, quite prevalent in the market. So, what kind of timing do you foresee, like, the mass market brand, like, for example, BYD, they're like mass brand, taking up LiDAR? And then, what is holding them back at this point? We won't be able to comment on specific customer, but what we do see is that I think in the end, it's not only about the hardware cost, it's also about the function they develop. For example, when people are able to roll out with the city NOA and other more advanced functions, the value added by such function is much higher than if you're just doing playing level two with the LiDAR, which, you know, isn't of greater value compared to the more advanced function. So in the end, I don't think it's about specific brand, it's about all, all the car makers as a whole. Can we develop more advanced functions to generate more value for the customer? Thank you, David. So my next question is relating to cost or margin. So just wondering, for our factory, when the utilization rate ramp up at a relatively full stage, what kind of gross margin can we see for our AT product? I think it's we've... Thank you, Greg. Tina, it's a good question, but we don't break out the specific margins by product for competitive reasons, because then it makes us lose... It doesn't give us leverage in our negotiations with OEMs. That's why we give you a blended number, and that will be somewhere between 32%-35% for next year is our target. Yeah, but you can imagine the AM margin is slightly higher than... But you know it, you know that our ADAS margin is quite good for us to get to 32%, because ADAS becomes over 50% for sure of revenue next year and growing. So we can take that to there, you know. Right. It's quite good. Okay. Got it. Thank you, Louis. That's all of my questions. Your next question comes from Jessie Lo with Bank of America. Please go ahead. Thank you for taking my question. So my first question would be, on our OpEx guidance, because we noticed that in, third quarter, it came up, quite significantly, probably because we have, are, mass producing, in the, Hertz Center, and also, we probably will be entering, into the mass production for the Maxwell in fourth quarter as well. So what will be, the guidance for the OpEx ratio entering into fourth quarter in, 2024? That's a good question. I think for, the OpEx number was high, mostly in the G&A side, and that's because of actual professional fees. So as we became a public company, we've had to ramp up, on the, on the, you know, all the hiring for G&A, for financial, for SOX compliance, for internal audit, and also we had to deal with legal fees, from the—for the suits from Ouster. So mostly is from that side. I think long term, last year, on a non-GAAP basis, our OpEx margin, our, our net margin non-GAAP was about 11%, 12%. This year will probably be around 9% or 10%. Next year, we're hoping to get to profitability on a non-GAAP basis, as you know. So OpEx is actually not out of control, it is because of the professional fees. Got it. Very clear. And my next question would be: can you share some thoughts and the works we have done regarding of our overseas plan? Because previously there has been news saying that we potentially would build a plant in Mexico. Oh, I see. So, so we haven't made the decision to build a factory in Mexico. So we are looking at different options in the North American regions, because the customers there prefer if we could build locally, locally meaning in either in the U.S. or Mexico. So, there might be some false news about us deciding to build in Mexico, but that's, that's actually not true. But, we are actively working with the customer and for the customer in finding a plant in North America. So the plan is- Got it. To put a plant. We start a plant in 2024, if not finish the whole thing. In North America. Got it. Got it, got it. Thank you so much. That's all from me. Thank you. Thank you. Your next question comes from Shihi Tang with Huatai Securities. Please go ahead. Shihi Tang, your line is now live. Please proceed with your question. Your next question comes from Olivia Zhang with Haitong. Please go ahead. Olivia Zhang, your line is now live. Please proceed with your question. Hi, can you hear me? Yes, we can hear you. Go ahead, Olivia. Okay. Okay, maybe just one quick question from me. As Hesai's product, you know, gets adopted by, you know, maybe in the future, global OEMs, do you have relevant overseas revenue targets for the next two or three years? Thanks. Currently, our overseas revenue is close to 40% of our total. It's a little bit below. It used to be a little bit higher because of the autonomous mobility. I think ADAS is growing much faster in Asia than it is in the U.S. and Europe currently. So we would expect Asia to continue to increase the percentage. I think the overseas OEMs will catch, begin to add significant volume in 2026, 2027. So I think this trend will continue, but long term, we expect, ideally would be 40% overseas and 60%, China and Asia. That would be our target. Okay. That's, that's very clear. Thanks. Thank you. As there are no further questions now, I'll turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact our IR team. This concludes today's call, and we look forward to speaking to you again next quarter. Thank you and goodbye. This concludes today's conference call. You may now disconnect your line. Thank you.