Hello, ladies and gentlemen. Thank you for standing by for the Q3 2023 earnings conference call for XPeng Inc. At this time, all participants are in listen-only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Alex Xie, Head of Investor Relations of the company. Please go ahead, Alex. Thank you. Hello, everyone, and welcome to XPeng's Q3 2023 earnings conference call. Our financial and operating results were issued via Newswire services earlier today and available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiaopeng.com. Participants on today's call from our management team will include our Co-founder, Chairman, and CEO, Mr. He Xiaopeng; Vice Chairman and President, Dr. Brian Gu; Vice President of Corporate Finance and Investment, Mr. Charles Zhang; Vice President of Finance Accounting, Mr. James Wu, and myself. Management will begin with prepared remarks, and the call will conclude with a Q&A session. A webcast replay of this conference call will be available on the IR section of our website. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from views expressed today. Further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable laws. Please also note that XPeng's earnings press release and this conference call include the disclosure of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. XPeng's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. I will now turn the call over to our Co-founder, Chairman, and CEO, Mr. He Xiaopeng. Please go ahead. Hello, everyone. Today, I'm pleased to report to our shareholders and customers that after three quarters of transformation and effort, we have entered into the initial phase of a virtuous cycle, driving improvements in sales, brand image, team morale, and free cash flow. It is extremely difficult to deliver such a turnaround in the smart car manufacturing industry. Therefore, I would like to express my gratitude for your support and patience throughout the journey. Going forward, we're confident in achieving rapid sales growth and multiple improvement of gross margin in the Q4, and we're ready to gain considerable market share in 2024, achieving a high growth target that is significantly above the industry average. China's new energy vehicle industry has witnessed resilience and growth amidst increasingly intensified competition throughout 2023, creating great opportunities to reshape the industry landscape. The competition on electrification and smartification is speeding up the replacement of ICE cars with NEVs, and AI is revolutionizing the technical structure of smart EVs and transforming automakers' business models. There are no shortcuts to ADAS technology. The only way to determine whether mass production and the inflection point of ADAS technology have been reached is the achievement of nationwide coverage with low cost, a high level of safety, and great customer experience across different models. ... During our Tech Day on October 24, we launched the public testing of XNGP in the first batch of 20 cities, where high-definition maps are unavailable. Our plan is to expand our coverage to 50 cities by the end of this year. Our technology and AI will empower our customers to use ADAS wherever they drive throughout the country. XPeng has been a pioneer and leader in ADAS technology and its customer adoption. I strongly believe that the demand for ADAS will surge in the next five years, and XPeng will be the preferred smart EV brand for customers. In the year, 2024, we will also integrate multiple different systems with full stack capabilities, and the next generation electronic architecture, unified intelligent driving domain, human-machine interaction intelligent assistance system, as well as intelligent voice, intelligent cockpit capabilities, and new large language model capabilities. The next generation intelligent chassis and intelligent powertrain will integrate these topics. Then it can be quickly deployed to different vehicle models and realize globalization, and it can also realize new XPeng in whole vehicle cross-platform, even from cars to other transportation tools integration. I believe that in the long run, this will greatly improve our engineering capabilities in global deployment and deployment of multiple products, and through the integration and development of different intelligent domains, strengthen our competitiveness in the entire field of intelligence. Next year, we'll consolidate and integrate our full stack in-house R&D capabilities in a wide range of systems, including the next-gen EE Architecture, the unified ADAS domain, smart cockpit and voice assistant, brand new large language models, the next-gen chassis and powertrain. As a result, we'll be able to deploy multiple models for the global market rapidly and realize the integration of cars between different platforms, as well as between cars and other vehicles. I believe this will significantly enhance our engineering capabilities to support various products in the global market, strengthening our edge in smart technologies by integrating different systems. While persisting with the intelligence strategy, in the past three quarters, we have undergone major adjustments and upgrades to the company's strategy, organization, management team, and product technology planning. Normally, such significant changes, if they happen simultaneously, would pose a very high risk and have a very adverse impact on the short term. But I am very happy that because of the mutual trust and hard work of the XPeng team, these changes not only did not affect our short-term performance, but also helped us achieve results that exceeded our initial expectations. Apart from our commitment to ADAS and smart EV technologies, we have made crucial changes to our corporate strategies, organizational structure, senior management team, and product and technology roadmap over the past three quarters. Making various changes of such a magnitude simultaneously could have brought risks and impacted near-term results. However, thanks to the mutual trust and endeavors of the whole XPeng team, these changes did not affect our short-term performance. Instead, they allowed us to deliver better than expected results. In the Q3, our vehicle deliveries exceeded 40,000, representing a 72% increase quarter-over-quarter. Additionally, we achieved positive free cash flow with over CNY 1 billion in cash inflow. For the Q3 of 2023, our vehicle deliveries exceeded 40,000, representing a 72% increase quarter-over-quarter. Additionally, we achieved positive free cash flow with over CNY 1 billion in cash inflow. In the Q4, we expect vehicle deliveries to reach a new record high. Our target is over 60,000 units. We're confident of setting a new record for vehicle deliveries in the Q4. Our target is over 60,000 units Sorry, 60,000 units. In terms of models, the G6 became the sales champion of smart pure electric SUVs in the CNY 250,000 price range in its Q1 on the market. In October, deliveries exceeded 8,700. The successful performance of the G6 fully proves that XPeng can redefine the benchmark model in a sub-segment with highly differentiated product technology and effective marketing, leading the intelligence towards a larger customer base. Regarding product sales, the G6 electric SUV has become the top-selling vehicle in the CNY 250,000 price range during its Q1 on the market. In October, over 8,700 G6 vehicles were delivered. This early success of the G6 is a strong validation of XPeng's ability to create and introduce a new benchmark model in the relevant market segment, thanks to our highly differentiated technologies and effective marketing. By doing so, we're bringing smart EV technologies to a much broader customer base. In September, we launched the competitive, fully improved 2024 G9, and implemented technological advancements, achieving higher profitability than the original G9. The new G9's deliveries in October have already exceeded 4,000, becoming a popular product in the 30,000 level pure electric SUV market. In September, we launched the 2024 edition of XPeng G9, with a higher gross margin than that of the original version. This cost reduction was made possible through advancements in technology and engineering. In October, we delivered over 4,000 units of G9, making it one of the top-selling electric SUVs in the 300,000 CNY price segment. In October, we achieved a record-breaking sales month with over 20,000 vehicle deliveries and secured the top spot among EV startups for BEV sales volume again. We're excited to announce that we will showcase our flagship MPV, the XPeng X9, at the Guangzhou Auto Show, and start pre-sale on November 17th. The X9 is a 7-seater, pure electric smart MPV, built on the SEPA 2.0 architecture. It stands out from traditional MPV models with superior space, design, and maneuvering that perfectly combine the advantages of an MPV and SUV. Moreover, the X9 comes equipped with rear wheel steering as a standard configuration, enabling a turning radius similar to that of the P7. With XNGP, our industry-leading technology that does not rely on high-definition maps, maneuvering an MPV has never been easier and more agile. These technical capabilities are not found in any other MPV models on the market. X9 will be delivered from the beginning of January 2024. We're confident that X9 will become the top seller in the large electric MPV market. In 2024, we plan to launch highly competitive new models based on the SEPA 2.0 architecture. Additionally, we intend to introduce a new EV brand in the 150,000 RMB price segment. Leveraging our partnership with DiDi, China's leading mobility technology platform, we believe that this new brand will greatly accelerate our sales growth and expand our market share in the A-class EV market. Our team is currently on track to develop Mona, the first model under this brand, with an expected launch date in the Q3 of 2024. We believe that Mona is just the beginning of an exciting journey, and we're committed to pushing the boundaries of technology and keeping costs under control. This will enable us to launch smart EV models that boast autonomous driving technology in the mass market segment at a price point of CNY 150,000 or $20,000. This move will give our product a significant edge over other models in the segment, allowing us to reach a wider audience in the Blue Ocean market segment. Our president, Ms. Wang Fengying, has been leading a significant overhaul of our sales network, making it more efficient, flexible, and expanding faster to cover more tier three and tier four cities... We closed almost 100 low-performing stores during the first three quarters this year, and launched the Jupiter Project, a program to recruit more competent franchisee partners. We secured investment for over 100 new stores within two months, and established cooperation with top-tier dealer groups specializing in luxury vehicles. As we head into the Q4, we're accelerating new store openings and expanding our sales network to reach our goal of 500 stores by the end of the year or early next year. These upgrades and rapid expansions, coupled with innovations in marketing, will become one of the most important drivers for our sales growth in 2024 and beyond. During late September, I had the opportunity to visit the Volkswagen Group's headquarters in Wolfsburg. We had a detailed discussion with Mr. Blume and Volkswagen's senior management regarding our comprehensive strategic partnership, which helped clarify the blueprint for our long-term strategic cooperation in technology. We also explored deeper strategic cooperation opportunities in the international market. Currently, we're jointly developing models based on the G9 platform, which is in full swing. The strategic cooperation in the supply chain is also progressing effectively, and we expect cost reduction in the supply chain to generate meaningful results in the next year. To enhance our cost control, we learn from the best practice of OEMs in the industry. The progress of cost reduction in the entire process of design, R&D, and manufacturing and marketing, has given me confidence in accelerating the progress to reach the goal of 25% cost reduction by the end of 2024, or even exceed it, which will significantly increase the growth, profit margin next year. Let's look at the cash flow. We had approximately CNY 36.5 billion in cash at the end of the Q3 of 2023, and we generated over CNY 1 billion in positive free cash flow during the same quarter. With our new products and technology-driven cost reduction, we expect to see a significant improvement in our gross margin, resulting in even stronger positive free cash flow in the Q4. This is an important milestone for us to achieve profitability at scale in the long term. Looking ahead, we're projecting our total vehicle deliveries to be between 59,500 and 63,500 units in the Q4 of 2023, with a quarter-over-quarter growth rate of 48.7%-58.7%. We expect our revenue to be between CNY 12.7 billion and CNY 13.6 billion during this period. We are committed to implementing transformation, primarily in our organization and marketing strategy, which we believe will produce more favorable results in 2024 and beyond. This, in turn, will enable us to accelerate our growth and expand our scale from the Q4 of 2024. Our aim is to capitalize on global opportunities arising from our leadership in smart EV technologies, improve our organizational efficiency, and gain a dominant market share. ... Our ultimate goal is to establish XPeng as the top smart EV company by 2020, by 2030. Thank you, everyone. With that, I'll now turn the call over to our VP of Finance, Mr. James Wu, to discuss our financial performance for the Q3 of 2023. Thank you, Xiaopeng. Now I'd like to provide a brief overview of our financial results for the Q3 of 2023. I'll reference RMB only in my discussion today, unless otherwise stated. Our total revenues were CNY 8.53 billion for the Q3 of 2023, an increase of 25% year-over-year, and an increase of 68.5% quarter-over-quarter. Revenues from vehicle sales were CNY 7.84 billion for the Q3 of 2023, representing an increase of 25.7% year-over-year, and an increase of 77.3% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were mainly attributable to the accelerating sales growth of the G6 in the Q3 of 2023. Gross margin was negative 2.7% for the Q3 of 2023, compared with 13.5% for the same period of 2022, and negative 3.9% for the Q2 of 2023. Excluding the negative impact attributable to the G3i and the production as we described in the prior quarter, the gross margin would have been break even for this quarter. Vehicle margin was negative 6.1% for the Q3 of 2023, compared with 11.6% for the same period of 2022, and negative 8.6% for the second quarter of 2023. The year-over-year decrease was explained by, first, the inventory write-downs amounting to CNY 0.23 billion related to the model G3i, as we finished the rest of the production in its life cycle, with a negative impact of 2.9 percentage points on vehicle margin. And secondly, increased sales promotions and the expiry of new energy vehicle subsidies. The quarter-over-quarter increase was primarily attributable to the improvement in our product mix and battery cost reduction. R&D expenses were CNY 1.31 billion for the Q3 of 2023, representing a decrease of 12.9% year-over-year, and a decrease of 4.5% quarter-over-quarter. The year-over-year and quarter-over-quarter decreases were mainly in line with the development, timing, and progress of new vehicle programs. SG&A expenses were CNY 1.69 billion for the Q3 of 2023, representing an increase of 4% year-over-year, and an increase of 9.6% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were primarily attributable to the higher commissions paid to our franchise stores. As a result of the foregoing, loss from operations were CNY 3.16 billion for the third quarter of 2023, compared with CNY 2.18 billion for the same period of 2022, and CNY 3.09 billion for the Q2 of 2023. Fair value loss on derivative liability was CNY 0.97 billion for the Q3 of 2023. On July 26, 2023, our company entered into a agreement with Volkswagen Group to issue up to 4.99% of our company's ordinary shares for a fixed purchase price of $15 per ADS. Until the transaction closes, fluctuations in the fair value of the forward share purchase agreement were measured through profit or loss, resulting in a non-cash loss of RMB 0.97 billion for this quarter. Net loss was RMB 3.89 billion for the Q3 of 2023, compared with RMB 2.38 billion for the same period of 2022, and RMB 2.8 billion for the Q2 of 2023. Non-GAAP net loss, which excludes share-based compensation expenses and fair value loss on derivative liability, was CNY 2.79 billion for the Q3 of 2023, compared with CNY 2.22 billion for the same period of 2022, and CNY 2.67 billion for the Q2 of 2023. As of September 30, 2023, our company had cash and cash equivalents, restricted cash, short-term investments, and time deposits in total of CNY 36.48 billion. The positive free cash flow in Q3, as Xiaopeng mentioned earlier, was the main driver for our higher quarter-over-quarter cash balance. To be mindful of the length of our earnings call, I would encourage listeners to refer to our earnings press release for more details on our Q3 financial results. This concludes our prepared remarks. We'll now open the line to questions. Operator, please go ahead. 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, then two. If you are on a speakerphone, please pick up the handset to ask a 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. 管理层，你们好，非常感谢接受我的提问啊。我有两个问题，那第二个问题是关于竞争的，因为我们也看到了过去几个季度有更多的科技企业，啊，包含像华为、小米相继加入的这个电车的竞争，那也增加了这个有像华为销售谈判能力如此之强啊。所以就您的看法，电车电动车未来的这个竞争，是不是大概率是商业生态圈里的竞争呢？那我们也看到科技厂可以利用消费电子业务延伸的渠道和用户生态去强化产品销售。但是对于我们电车企业的话，呃，管理层怎么去补足这一块的差距？啊，这是第一个问题。 So my first question is about the competition. As we notice that there are more tech companies like Huawei and Xiaomi challenging the incumbent EV makers. We noticed that tech companies have the advantages of a cross-division ecosystem as well as the channel that remain quite difficult for car makers to replicate. How would XPeng make up for such shortcomings versus tech players in the following quarters? That's my first question. Thank you. Thank you, my XPeng, this... 非常好，但是我觉得也很难回复的问题啊。这个，在我原来的互联网创业，在我当时投资小鹏汽车的时候，当然都在思考这个话题。我先举一些以前的案例吧，在我上一次的移动互联网创业里面，我们看到了两种竞争，第一种是不是可以用流量去能够在很多领域都能够进行一个生态的互补的竞争，最后我们的结果发现流量是有很多地方可以互补，因为它可以穿透不同的能力。但是，在终端方面，比如说在PC，在手机，在电视领域里面，他们的内容，他们的流量是无法互连的。也就是说，在这样一个案例中，它并没有成功。所以在今天的情况下，我们可以看到，越来多的跨界的企业的，以前我们有的看到彼此来自地产，有来自于手机，有来自于互联网，或者来自于其他行业的这个企业在跨界竞争。我们要看一看，这个跨界和电动车这样一个大型制造强AI的这样的一个能力，它是不是会有多少的延伸性，这是一个非常需要思考的话题。我想说的是说，当然在小鹏汽车的布局里面，一直都是非常期望去看小鹏自己在这一领域里面有这样的一个布局。所以，我举一个例子，在几年前，小鹏一直 在考虑在出行跟AI上面如何能够进行生态的布局，包括了我们的飞行汽车，今年已经是第9年，机器人已经是第5年的这样的一个布局。包括了在最近7月份宣布的我们和大众的合作，我们实际上更多的想在供应链，在制造领域去跟大众的合作，在全球的品牌销售、售后服务领域，甚至制造领域跟大众合作，那么这也是我们的这个生态布局。包括我们在8月份和滴滴在A级车，在出行车，在未来的这个Robotaxi相关领域的生态布局，实际上都是期望将不同的能力进行的组合。但是我们也想非常明确的是说，那么最终做强是要靠自己，但是做大锦上添花可以靠生态的合作，我还是这样的一个认为，谢谢。 Thank you so much for your question. This is Xiaopeng. Now, this is a very good question, but not an easy question. I'd like to start by reviewing my past entrepreneurial experience. I first started with an international internet company and also – and then I went on to invest in XPeng. I mean, your question has always been a question of thinking, you know, for many years in the past of my experience. Let me give you an example. When I was in the internet mobile internet business, we saw a lot of competition, and there are different ways to compete in that landscape. For example, people turn to acquiring traffic, and that is a good way to actually make up for different shortcomings in your ecosystem, or the lack of different capabilities or abilities in different aspects. And you saw a lot of, you know, a crossover from different players in different sectors. And you realize that the problem with using or relying purely on traffic is that there are a lot of media that has the traffic that is not transferable. Let me give you an example. You know, audience from, you know, from traditional watching traditional TV, you know, may not be the same audience who, you know, rely so heavily on mobile phones, etc. And so that actually leads to a lot of failures. But right now, you also are seeing a lot of competitions from players across different sectors, you know, who try to actually enter a new domain using different ecosystem or capabilities from their, you know, own sector. For example, you see players from the real estate, the mobile smartphone industry, and also from the internet, and a lot of tech companies as well. So when we compare ourselves against these players from other sectors, we have to really come down to our internal capability. We have to look at what we have as our strengths. For example, we are very strong with our technology; we're, you know, very strong with our AI capability and also manufacturing capability, as well as our supply chain as well. So really, what help us to differentiate ourselves and stand out from the crowd is that we can actually focus on what we already have and expand using different partnerships. For example, we have been very committed to actually expand our ecosystem by, for example, investing in our other formats of mobility, different vehicle formats. We have invested in our robotics technology and flying cars, etc. We also have announced our partnership with Volkswagen in different aspects, including, you know, supply chain technology, global sales and marketing, and also after sales services as well. And in August, we also announced our partnership with DiDi, a leading mobility tech platform, to expand our market share in the A-class vehicle segment, also to build the foundation for our future expansion in robotaxi, etc. Now, these are just some of the examples of how we try to make up for our shortcoming in the ecosystem. And we believe that by combining different capabilities through this partnership, we can actually strengthen our overall competency, you know, building on the strong foundation that we already have, which is our technology and our core manufacturing capability as a car maker. Thank you. 谢谢小鹏总详细讲啊。那我第二个问题是关于产品的定价权。好，虽然刚才在call上面，小鹏总也提到，计划明年实现整体降本25%这个目标，那如果我们希望从四季度到明年开始，这个能够有一个比较可持续的毛利率的增长之外，是不是除了降本之外，产品在细分市场的定价权，会不会扮演一个更重要的角色？因为我们看到国内部分车企是，似乎是外包的这个价格策略，给特斯拉跟比亚迪等企业，就是被动做一些价格调整。所以也想要请问一下管理层啊，我，就是小鹏汽车在未来如何在细分市场里面取得更强的一个定价权啊，除了这个降本之外。So my second question is about the pricing power, because, as mentioned early in the call, I think the company targets to cut the 2024 production cost by 25%, as the company optimizes design and efficiency, etc. However, without enhancing the pricing power, very likely the benefit of cost saving might still be depleted by the constant price cutting, especially quite a lot of car makers outsource their pricing strategies these days to like Tesla and BYD and just respond passively. So how does XPeng plan to strengthen its pricing power on top of a cost reduction into 2024? That's my second question. Thank you. 对，谢谢啊，我非常认同你的观点啊，这个。虽然我们都期望在长期来看，在全球能够像苹果手机一样拥有非常好的这个定价权呢。这个我相信在汽车领域里面，首先这个定价权来自于规模，以及对于综合的这个成本控制能力啊。虽然规模影响了成本，且规模也影响了销量，那么特别是在现在这个整个的，能力重塑，啊，品牌重塑的这个过程中间。那么其次，定价权我认为还来自于品牌的溢价，以及对于客户，满足客户这个差异化能力。呃，按照我们跟我们的总裁王凤英一直聊着，他是品类创新的坚定的拥护者，所以我们在后面的不少产品里面都会考虑到如何差异化地满足客户的需求，啊。所以在定价权的领域里面，我相信在小鹏的2024、2025年，我们会不断地看到我们在最开始的这个四个要素规模、成本、品牌以及差异化，这四个方面，小鹏会综合来发力，来获得更强大的定价权。谢谢。 Thank you for your question. First of all, I agree with your opinion that pricing power is very important, and in the long term, we definitely want to become the Apple in automaking, which has very, very strong bargaining power and pricing power. As a car maker and OEM, we believe that there are several aspects that are important that's affecting our pricing power. One is scale, and the other is cost control capability as well as our branding and differentiation. Definitely, the scale of sales affect our costs, and it's also the same the other way around as well. Right now we are in the process of reshaping our overall capability as well as our brand. It is very important that we can actually, first of all, build our brand image as well as contributing to the customer value by really strengthening our differentiation. Our President, Ms. Wang Fengying, is a big advocate on internal and also systematic innovation. So going forward, going into 2024 and 2025, we will continue our effort and commitment in scaling up our sales and volume, controlling our costs, building our brand as well as our differentiation in order to gain a bigger pricing power. Thank you. Xie xie, Xiaopeng Zong. Thank you very much for sharing all the great insight. Thank you. Your next question comes from Ming-Hsun Lee with Bank of America. Please go ahead. Thank you. 小鹏总，还有各位领导，你们好，那，这边的话，容我也发问两个问题。那第一个问题呢，想要请问的，多关于就是，渠道的这个改革，因为从，王总加入，我们公司以来，其实，渠道改革就是一个，一个持续性的。那，刚才其实在这个，一开始的这个，开场的时候，小鹏总也有提到这个，包括，第三季，这个门店，然后开了一些新店了。那想了解一下，就是说，可以讲一讲，就是说目前来讲的话，这个渠道，改革进行的这个，进度大概是怎么样的，那，未来我们有没有一个，就是，比如说，到明年年底的时候，我们希望，我们这个店呢，能够，开到多少家？那另外就是还有一个最新的，我们希望，将来的这个，直营的店跟这个经销商的店的一个，占比。然后也想了解一下，就是说如果我们从一些，这个数字的指标来看的话，能不能看得出来，就是说经过这个，渠道的改革，我们这个比如在店效啊，运营的效率啊，或者是有哪些其他的这个，财务的指标，可以量化的指标，可以看到我们这边的一个，渠道改革，逐步，有一些成效。那我翻译一下，so after Miss Wang join XPeng the channel channels sales stores reforming is is continuing. So do you have any metrics regarding to evaluate your progress on your channel reform? Besides that, do you have any targets to about the long term, direct sales and also dealership, percentage? 谢谢。 谢谢啊，明娜。这个我来讲一讲这个关于渠道的变革，这个，凤英原本来自于这个长城，在成本渠道，品类创新领域是做得非常好的。那么在她入职的前面几个月，她一直观察小鹏的渠道跟小鹏的销售体系。因为在过去，小鹏是创新做到是这个，这个自营，但是不全直营，啊，这个有直营渠道，有经销商渠道，但是控制这个价格，啊，统一价格这样的一个情况。那么所以一直观察跟讨论。那么我们在三季度明确我们这个讨论的方式，因为它跟着我们的，未来2025年、2026年我们的车型的数量相关啊。嗯，也可以跟大家分享，2025年我们的车的数量比现在会有比较大的这个提高，那么同时也会考虑到未来的市场的变化、竞争，以及考虑到到从现在的 一二线为主，到未来的要一二线，要加上三四线城市的组合。所以我们在三季度开始进行了变革。好，先翻译第一段，谢谢。 Thank you for your question. Now, I would like to address this by giving you a little bit of background information about our President Miss Wang. She come from 长城, Great Wall, and traditional OEM, and she has been excellent in controlling costs, developing channels and also innovative systematic overhaul of the company. So in the first few months that she joined our company, she spent a lot of time observing what we currently have. We used to have this, hybrid channel, of having our cell phone stores together with some franchisee stores, but we had a total control of the pricing for all of the stores, I mean all of the channels. And going into Q3, I mean for the past quarter, in Q3, we have already set our future strategy of channel innovation or reform, which will actually cater to different kinds of dynamics or changes coming to going into 2025 to 2026. We are talking about, for example, significantly more models that we're going to launch in 2025. And also we take into consideration the future market competition, market environment, and also our future expansion to cover not just tier one, tier two cities, but also tier three, tier four cities as well. 那么 所以呢，这个我们的中长期目标，在接下来的数年内，我们会建设500家集销售与服务功能一体的综合店，以及近1000家体验中心和卫星店，实现销售服务的的大型闭环。我们同时会在预计在今年的四季度，会开出超过100家全新的经销商门店，来使我们在年底的总数超过500家，那么比例上是以经销商为主。当然，我们都知道，一个店从新店到熟练需要一定的时间，所以我们更有信心在明年的第一季度、第二季度，它会给我们带来巨大的销售的增长。同时，因为我们在低线城市的扩张，也会来自我们在这个低线城市的销量得到提高。那么我们会保持在我们原来体系下仍然掌控的定价权，所以小鹏的各个区域的销售负责人会同时为直营跟经销商两个体系的销量、满意度、NPS等负责。我们会用一致的标准服务，并且会大力投入在工具流程上面去来加强赋能与管控。至于刚刚您最后的问题，就是关于在店效，我觉得今天来看，小鹏的店效相比行业的领先者还有很大的提升空间，我们现在在做非常多的事情，我们预期在2024年我们会大幅提高。谢谢。 So in the mid to long term, we aim to have at least 500 stores that are capable of not only doing sales but services as well. In the mid to long term, we also plan to have a total of at least 1,000 service centers across the country that can help us to provide better services to our customers. Going to Q4, we plan to open 100 new stores that can allow us to expand our sales network more extensively. So by the end of 2023, we're gonna have a total of 500 stores of different modes. Over time, because it takes time for those new stores to build up their capability and experience, so we believe that the time of the Q1 and Q2 next year will be the time when we can actually see a lot of growth in our deliveries and sales, and that can also allow us to see growth in deliveries and sales in lower tier cities in China as well, because we are going to build more stores in those areas and regions. In terms of the pricing control, we will remain very strong in terms of the extent of price control, and we are going to evaluate the performance of different stores from different aspects, including their NPS, and we can equip them and empower them with a wide range of tools, and we can control the procedures, and we can do a lot more things to maintain our strong control of the service qualities of those stores as well. Now, in terms of the efficiencies of the performance of the stores, I agree with you, and we believe that, you know, it is very important that we keep improving the overall efficiencies of our stores, because currently we see still a lot of room for growth there, for improvement there. And by 2024, we expect to see a huge uptake in terms of the efficiencies of our store. Thank you. Let me translate my question. My second question is that is related to export business. So in October, you also ship us a few thousands of cars to overseas market. So in the future, will you consider to build more the direct operator stores, or you will rely on more on the distributor locally? And then regarding your current product portfolio, do you think you will export all the models overseas, or you will select a few models for overseas market? And lastly, do you have any plan for Southeast Asia market? Ming, it's Brian. Let me address your question. Regarding the international expansion, you're correct that we currently employ, you know, sort of hybrid model in the Nordic countries. We have direct-owned stores as well as our partnerships and agents. But going forward, we probably gonna opt to use more of a collaborative partnership model, using either agents or distributors for specific markets, so that's probably gonna be likely the mix will shift towards a more partnership-oriented model. And in terms of products for international markets, you saw that we currently have G9 and P7i currently selling in Europe already. We will be launching G6 as a global product next year. So I would say it's only the subset of product that we will design and prove for international use, not all our products. So the products I mentioned are the ones that we're currently decided for global markets. And also we have plans for right-hand drive models next year as well. For example, by the end of next year, we plan to roll out our first right-hand drive model, likely to be based on the G6 model. So with that, we'll be able to tackle Southeast Asia markets, so that will definitely be in our sights, and we'll be also looking at other right-hand drive model markets as well. Brian. I don't have any questions. Thank you. Your next question comes from Tina Hou with Goldman Sachs. Please go ahead. Thank you very much for management's time. So my first question is regarding our sales volume. So according to our Q4 sales volume guidance, it seems that November and December will be flat versus the October volume. So just wondering what is the reason here? Are we just being conservative or is there any specific trends that we've observed in the industry? And then the second question is regarding gross margin, so management mentioned excluding the impairment loss of G3, the vehicle gross margin was break even in Q3 2023, so the last time we delivered over 40,000 units of vehicles was in the Q4 of 2021, and then back then the vehicle gross margin was actually 10.9%. So, just wondering what is leading to the differential in gross margin? And also related to that, management mentioned that next year, we're expecting to see a greater gross margin enhancement. Obviously, we know the cost reduction is pretty on track, even ahead of our progress. But then how much price decline are we factored into this growth margin expectation? Because we see that this year, for the three quarters this year, an average ASP actually declined by 6% year-over-year. So how much of the competition are we factoring into next year in terms of gross margin guidance? Thank you. So Tina, this is Brian. Let me first answer your first question. You know, the guidance of 60,000 this quarter, I think reflect of our confidence of the progress we've made in you know the recent months. We think it's actually a very important milestone for us to reach an average 20,000 per month. So this is I think is a very I would say important milestone for us. And also by guiding, giving this guidance, we also are considering the competition as well as the macroeconomic backdrop that we're facing in the Q4. We're very confident with the guidance because obviously the backlog we have already as well as the momentum we're seeing in our order intake. But I think this is also reflective of the market at the moment, and we hope that this is a realistic target for us. And now I'll hand off to James for the gross profit comments. Yeah, Tina, from a gross margin perspective, first of all, as we talked about earlier, even if we compare to on a year-over-year basis, the reduction in margin came from, as you mentioned, the G3 EOP impact that we have booked in this quarter. And this will be the final impact from the G3 EOP perspective. And secondly, you know, going into 2023, the new energy vehicle subsidy has been removed from the market, and that obviously has an impact on our margin as well. You did mention our ASP has reduced over time. I believe that's a overall market dynamic as well, because we are, we've been trying to improve the product competitiveness for our product as well throughout this journey. In the meantime, as Xiaopeng mentioned, we do expect our gross margin to improve in Q4 meaningfully. Particularly our vehicle margin will become positive, we believe in the Q4. And a proving factor as we improve our product mix is that, as we launch the new G9 2024, we see the gross profit margin is actually higher than our older version of G9. This is a great proving point for us to continue to drive profitability of our products. Hopefully that answers your question. I just have a very quick follow-up. So in terms of the cost reduction, technology improvement cost reduction, which are the models that can benefit from the cost reduction? Thank you. All of the models that we have will benefit from the cost reduction driven by technology advancement. But among our top-selling models, we are going to put more effort into driving up the cost reduction. Thank you. Your next question comes from Paul Gong with UBS. Please go ahead. My first question is regarding the positioning of the Mona brand. I understand the pricing point is generally lower than our main brands, but it's not really too much lower. And so how shall we differentiate the brand positioning of the two brands? Is Mona also going to be available at our current stores, to be sold simultaneously? Thank you. We are going to disclose more information regarding Mona next year, I mean, 2024. We'll talk about this new brand in terms of its branding, positioning, its, you know, channels and after-sale services. And right now, we are actively preparing for the launch of Mona for next year. One thing that I can address or I can share is that there's definitely going to have separate channels to sell Mona, with, you know, ... apart from, you know, our current, expanding lineups. 好的，那我的第二个问题是关于就小鹏总在开场的时候说过，就是跟大众也讨论过国际化市场的这么一个话题。那不知道，就说从小鹏总这个角度看来，像领跑跟斯塔拉那些事，他们成立的这个领跑国际的这种JV，相当于把领跑的这个产品，把中方的产品拿到国际市场，双方各取所长，这么一种方式，是否也是一种可以快速扩大国际化市场的一种方式呢？ So my question, my second question is regarding your earlier comments. You have discussed with Volkswagen regarding the global markets. How do you think the business model between Stellantis and Leapmotor that's going the Chinese products leverage with a global OEMs, global footprints and going to the global markets, would that accelerate your globalization in terms of the market reach? Hey, Paul, this is Charles here. I'll address the question. I think first of all, our joint development on the for the model based on the G9 platform has been going on really efficiently, and I think we're going to achieve a milestone very soon. And I think the international market collaboration is one of the strategic initiatives we are exploring with our partner, Volkswagen. And I think that we are, I think Volkswagen has global manufacturing footprint and also the supply chain capabilities. I think there's a lot of things, areas we can learn from our partner and also leverage each other's strength in the international market. We wouldn't comment on other companies' collaboration model. Thank you. Thank you。 Your next question come from Bin Wang with CITIC Securities. Please go ahead. 感谢管理层的这个提问的机会。那么我也有两个问题。那刚才投资者其实，就是请教了关于下沉市场我们的渠道的这个问题，那我想跟进一个关于产品的提问，就是我们怎么看，下沉市场的一些需求，以及我们怎么通过产品，在下沉市场上发挥我们的一些强项。So my first question is about to sell cars in the lower tier markets. How do we think of the demand for the lower tier cities? How do we utilize our strengths in those markets? 好，那我的第二个问题是关于这个R&D，明年的R&D的这个计划。那么我们其实看到，包括今年和去年，整个R&D的这个，总的费用基本上是走平的，那么明年我们的销量会继续提升的情况下，我们会不会就是用更多，用更多的钱花在这个研发上，那么可能我们研发就是增加的部分，主要是投入在哪边？My second question is about the research and development for 2024, as what will the R&D total amount like increase of next year and where will this money be spent on? Thank you. 对，你好，吴小姐。这个我来回答你的前两个问题。啊，这个关于产品的问题，实际上对于下沉市场的需求，实际上我们在，摸了这个平台，以及我们在另外一个，品类创新上，我们都有考虑，啊，就是在产品上，啊。首先因为在这里面我并不想，因为在没有发布产品之前，并不想要去提供产品具体的方向，但首先我们第一个就是说，我们期望将最优秀智能辅助驾驶也能够在，三四线或者二三线城市的需要用户里面能够得到很好的支持，这是我们会将这样的一个能力会标配，并且在这些城市都会全面地使用，啊，这是我们想说的第一个重要的点。第二个呢，我们一定会在，整个的渠道以及在这个渠道的方面也会做出很大的变化，跟现在的逻辑。那么现在可以先分享这两点，谢谢。 Let me address your first question regarding our product line up. We are going to meet the lower tier city demands by offering Mona and other new products. And right now, you know, we're not in a position to disclose too much specific information, but what I can see, what I can say right now is that we aim to offer top notch ADS technology and capabilities to a lower tier market as well, including tier two all the way to tier four cities audience, I mean customers, and we are going to set those autonomous driving capability as standard configurations in our future lineups for those cities as well. And we are also going to reform our distribution channels for the lower tier market. Thank you. 对，关于 R&D 的问题，这个非常好，也是我近期在一路一直思考的一个话题啊。我想说的是，小鹏在最近的三个季度，我们在做一系列的事情来使 R&D 的费用更有效率啊。例如第一件事情，当我重新调整组织的时候，第一件事情就是做减法，啊，把不必要的 R&D 去掉。第二是大力推动模块化，啊，让不同车型、不同平台进入一个扶摇架构体系。... 那么例如第三个，我举一个例子，我们现在在很多的研发的这个跟供应商的沟通过程中间，我们将供应商的R&D的研发费用直接计入到BOM，我们宁愿让BOM更高，但是我们要降低这个研发费用。那么通过这一系列事情，那么第四个，我加强在整个整体系R&D工具体系的打通，这是我们最近在做的一系列事情。那么在明年开始，我们一定会在多个地方，随着我们的能力提高了，我们会在多个地方会进一步加强。第一个加强就是造型，然后其次是智能化，包括还有工艺，我们认为工艺有巨大的提高的空间，以及国际化的R&D等方面，以及在我们的一些，对未来的布局的长期的战略的这个R&D里面，我们都会来进行加速。所以在明年，我们的R&D的费用，相对我们的这个今年的绝对数字，肯定是会有一个，一定程度明显的提高，谢谢。 Regarding your second question, on the R&D expenses, actually we've been putting in a lot of thoughts in the past three quarters, and we've actually done a lot, you know, starting from the beginning of this year to reduce our R&D fee. Let me give you several examples. When we started the overhaul in our, you know, restructuring of the organization, the first thing what we did is to cut R&D expenses, and we also have been advocating this module based design, rationale that can, allow us to put everything on the same architecture, the SEPA 2.0. We also have actually encouraged and asked our suppliers to put their R&D expenses into the BOM, you know, to reduce the overall R&D expenses on our front. The last thing we—another thing that we did was to actually equipped our R&D team with a more systematic tools and ways that could allow better integration and, you know, mutual compatibility of different parts, so that our overall R&D expenses can be cut even further. So going into 2024, we are going to actually strengthen several capabilities. The first one is our overall, you know, design capability of our models and products. We also will strengthen our craftsmanship, which is also critical in manufacturing. We will continue to improve our smartification, I mean, the intelligence of our products. We will also do R&D improvement in the for the international markets to strengthen our globalization capability. And we will also put in some R&D efforts to prepare for our long term development, you know, and also for our long term strategy as well. So in terms of the absolute value of our R&D expenses in 2024, definitely is going to be higher than this year. 好的，谢谢，谢谢您的回答，感谢。 The next question comes from Jing Chang with CICC. Please go ahead. Okay, this is my only one question. Regarding autonomous driving, which we believe will become a key factor in the next few years. So how do we expect the speed of autonomous driving to reshape the competitive landscape of the industry? Will it be very quickly seen in the next one to two years, or will it take much longer time? We also see that many traditional OEMs have chosen to cooperate with other companies in the practice of autonomous driving. So in contrast, can you share some details of our advantages of our in-house research? 嗨，静，这是小鹏。那么关于自动驾驶，我们认为在这个五年里面会类似2018年到2022年新能源汽车的高速发展的五年。我大概认为，在2025年相当于2020年新能源汽车的快速发展，在我们可以看到，如果看到2020年中国新能源汽车的新车占比，渗透率是在2020年快速起来的。那么现在我认为还是在技术的准备，在行业的铺垫，在预热的进程中间，现在是有很多越来越多的，有创新精神，愿意探索，喜欢科技的，这个年轻心态的客户都开始来尝试。但是我相信在随着，一段时间之后，会有更多的大众用户，我特别，会进入到这个市场。我特别开心的是，现在有越来越多的友商跟我们在一起，在去整个智能驾驶的市场来进行铺垫、教育和孵化，我觉得这是非常好的事情。那么对于全栈，帮，先帮我翻译第一段吧，谢谢。 Thank you for your question. This is Xiaopeng. I think the upcoming five years will actually usher in an era of rapid development for ADAS adoption and technology development. It's going to be very similar to the stage where we see the rapid development of, you know, NEV penetration from back in 2018 to 2022. And I remember back in 2020, we saw a huge uptake in the penetration rate of new energy vehicles in the market. And I think right now, in terms of ADAS technology adoption, we're still in a warming up stage, you know, in terms of the technology readiness and also for the whole industry as well. We definitely are seeing more and more younger customers who are embracing this new technology, who are willing to try this new experience. And in the future, we are very optimistic, optimistic about the adoption rate improvement because we, you know, first of all, we are very excited to see that there are more and more participants in the industry, you know, that are helping us to educate the wider, a wider audience, that are cultivating the market to get it ready for this upcoming exciting era of ADAS adoption. 对，关于全栈自研，我相信的优势太多了，我随便举几个例子。第一，例如如何进行本地化？那么在中国有很多ETC，中国有很多的不同减速带，那么想要做到这个，在这个技术里面做得好，你需要有本地化的资源，我举例，这是第一。第二点，如何做到超低的成本？客户现在对于全自动驾驶的接受度越来越高了，但是他期望是在合适成本和合适的安全和体验的环境下，如何让整个的成本能够做到更好？只有全栈资源。那么例如如何能够拥抱新的技术变化？我们都看到，在过去的一年里面，大语言的模型的变化，如何让大语言模型从哪些环节是部分的端到端，还是在全域的端到端去来协助自动驾驶，只有全栈自研才能做到。另外，我们看到一个非常有趣的观点，就是说现在的智能汽车跟原来的汽车从松耦合越来越进入到AI的紧耦合，只有在多个领域，比如说在座舱，在智能驾驶，在EE架构，在语言模型等多个地方的全栈资源，它才能够把不同的硬件、软件、能力、成本和运营体系耦合在一起。所以基本上我们认为在未来的这个，这个趋势里面，像部分资源或者部分领域全栈资源是非常困难的，应付这个长期的这个竞争的，谢谢。 Now, regarding our advantages or strength in having this full stack in-house R&D capability, you know, there's a long list of examples of strength that I can give you. I mean, just to name a few, localization of the self development of the technology is one of them. And the second thing is to control the cost of production, because, you know, even though we are seeing a wider customer base that are trying to embrace the technology, they still want to have both safety in terms of experience and also affordability as well. So having full stack development capability definitely allow us to control the cost better. And another good, you know, advantage of having that capability is that it can allow us to embrace upcoming and very cutting edge technology very timely as well. For example, in the past year, we saw this emergence of the application of large language models and having full stack R&D capability allow us to do full domain end to end application of this new technology, which you know would not be possible without that capability. And that is actually happening with our a lot of our peers who are struggling to adopt new technology as well. And another good point that I would like to make is that we are seeing more and more, you know, a tighter and tighter coupling with AI technology, with, you know, car manufacturing capability or R&D capability. And we need to have, for example, the next gen EE Architecture, the unified ADAS domain, you know, smart cockpit and voice assistant to actually embrace this tighter coupling with AI technology. And that actually requires a lot of integration on not just the hardware level, but also hardware together with software and AI as well. And we are very proud that currently we are very capable of doing that thanks to our full stack R&D capability. 好的，谢谢。我这边没有其他问题。 The last question is coming from Nick Lai with J.P. Morgan. Please go ahead. Good, thank you management. This is relatively simple, related to profitability question. In the Q4, I remember in the last conference call, if I didn't remember wrong, in the last conference call it was mentioned that the Q4 whole vehicle gross margin should have the opportunity to turn positive. Not sure if this guidance is still valid now? Then at the same time, next year's, next year's this whole profit margin's trend, because I see this, next year has this G6, G9 MPV price relatively high, so basically next year's gross margin should be, should be, much higher than now. Can it be understood this way? Then at the same time, another one just mentioned that Mona this product CNY 150,000 price, if just now President Xiaopeng mentioned that at this CNY 150,000 price, at the same time will launch relatively high-tier ADAS product, then currently on the market, in the CNY 150,000 pure electric car models, most of the profitability is not particularly high, then how do we guess and understand that we could at this CNY 150,000 price, at the same time launch relatively more content, this, this, has competitiveness, at the same time maintain profitability. I am very worried... Let me introduce my question very briefly. I recall in the Q2 result call, management indicate that the full Q vehicle margin will likely turn to positive territory. Is our guidance still so at the moment? And at the same time, we are launching the new A-class EV under Mona brand, which pricing point of about CNY 150,000. At the same time, the new product will be equipped with a high-end ADAS product. How do we reconcile the capacity competition in the low-end segment and also the fact that we are equipping the product with a much more advanced ADAS content? Thank you. Hey, thanks, Nick. This is James. So I'll answer your questions one by one. First of all, to reconfirm, we do believe our Q4 vehicle margin will turn positive, to confirm your question. This is bolstered by a better mix of products in Q4 compared to Q3. As I mentioned earlier, we did see some level of battery cost reduction that came through towards the end of Q3. So for Q4, we'll see a full quarter of battery cost reduction coming through, empowering the lithium prices stable over time. Going into 2024, we do, we do expect our gross margin to be meaningfully improved versus 2023 on a full year basis, and this is also bolstered by our continued cost reduction to achieve our, you know, 25% or even more cost reduction targets, as Xiaopeng mentioned earlier. We will have better product mix next year as we launch, for example, G9, which will be, you know, amongst the highest... X9, I'm sorry, X9, the highest, gross margin product at this point in our portfolio. And obviously, the new products coming from our SEPA 2.0 platform next year will be, will have better margin as well. And lastly, to your question on Mona. You're correct. It is targeting, you know, A segment. But we do see the Mona has a very good cost control and planning process, a very competitive from a cost perspective, first of all. And second of all, Mona will help us achieve great scale, which will benefit to the entire company from a scale perspective, as we've seen our cost allocation, and therefore improve our margin. And lastly, we do expect, you know, more controlled associated sales expense related to the Mona sales because of the scale. So it should not be a drag from a bottom-line perspective in terms of profitability. Thank you. Okay, thanks. Was there a follow-up question? No, it's, it's all clear. Thank you. It's clear. Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact XPeng's Investor Relations through the contact information provided on our website for the Piacente Financial Communications. This concludes today's conference call. You may now disconnect your lines.