Earnings call transcript: EHang Q4 2024 sees 190% revenue surge, stock up 8.55%

EHang Holdings Ltd (market cap: $1.42 billion) reported a significant revenue increase of 190% year-over-year for Q4 2024, reaching RMB 164.3 million, surpassing forecasts. The company’s earnings per share (EPS) improved to -0.33, beating the forecast of -0.83. Following the announcement, EHang’s stock rose by 8.55% to $22.45, reflecting positive investor sentiment. InvestingPro analysis indicates a FAIR overall financial health score, with particularly strong growth metrics.

Key Takeaways

• EHang’s Q4 revenue increased by 190% year-over-year, reaching RMB 164.3 million.
• EPS outperformed expectations, coming in at -0.33 compared to the forecast of -0.83.
• The stock price rose 8.55% post-announcement, indicating strong market confidence.
• EHang achieved its first positive adjusted net income for the year.
• The company aims for GAAP profitability by the second half of 2025.

Company Performance

EHang’s performance in Q4 2024 marks a significant milestone, with revenues soaring by 190% compared to the same period last year. The company delivered 78 units of its EH216S model, a 239% increase from the previous year. This robust growth is attributed to strong domestic demand and strategic expansion efforts. EHang’s position as the first eVTOL company to achieve non-GAAP profitability highlights its competitive edge in the burgeoning urban air mobility market.

Financial Highlights

• Revenue: RMB 164.3 million, up 190% year-over-year.
• Full Year Revenue: RMB 456.2 million, up 288.5% year-over-year.
• EPS: -0.33, better than the forecast of -0.83.
• Gross Margin: 60.7% in Q4, 61.4% for the full year.
• Positive adjusted net income: RMB 43.1 million.

Earnings vs. Forecast

EHang’s Q4 EPS of -0.33 exceeded the forecast of -0.83, representing a significant positive surprise. The revenue of RMB 164.3 million also surpassed expectations of RMB 136.66 million, marking a 20.2% beat. This performance indicates the company’s strong operational execution and market positioning.

Market Reaction

Following the earnings announcement, EHang’s stock price increased by 8.55%, closing at $22.45. This upward movement reflects investor confidence in the company’s growth prospects and its ability to exceed market expectations. The stock has demonstrated strong momentum with a 42.58% gain year-to-date, while analyst targets range from $17.00 to $31.28. According to InvestingPro’s Fair Value analysis, the stock appears to be trading above its calculated Fair Value, suggesting investors should carefully consider entry points.

Outlook & Guidance

EHang has set an ambitious revenue target of RMB 900 million for 2025, nearly doubling its 2024 revenue. The company expects to achieve GAAP profitability in the latter half of 2025 and full-year profitability by 2026. Capital expenditures are projected at $14 million for 2025, with operating expenses expected to grow by 40% year-over-year.

Executive Commentary

CEO Huang Zhi Hu remarked, "2024 was a breakthrough year as we achieved positive adjusted net income," underscoring the company’s financial turnaround. He added, "We aim to lead the transformation of urban air mobility," highlighting EHang’s strategic focus. COO Wang Zhao emphasized, "Safety is the top priority of the sector," reflecting the company’s commitment to operational excellence.

Risks and Challenges

• Regulatory hurdles: EHang must navigate complex regulatory environments to expand its operations.
• Competition: The urban air mobility sector is becoming increasingly competitive with new entrants.
• Supply chain disruptions: Potential disruptions could impact production and delivery timelines.
• Economic conditions: Macroeconomic factors could influence consumer demand and investment.
• Technological advancements: Rapid changes in technology require continuous innovation and adaptation.

Q&A

During the earnings call, analysts focused on EHang’s domestic demand, which includes over 1,000 unit orders. Questions also addressed the company’s focus on tourism and low-altitude operations ahead of air taxi services. EHang’s diversification into logistics and emergency services was highlighted as a key area for future revenue growth.

Full transcript - Ehang Holdings Ltd (EH) Q4 2024:

Conference Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Ehang Fourth Quarter and Fiscal Year of twenty twenty four Earnings Conference Call. Please note that the management’s prepared remarks and the subsequent Q and A session will primarily be conducted in Chinese and the corresponding simultaneous or consecutive interpretation can be accessed on the English line. As a reminder, all translations are for convenient purpose only. In case of any discrepancy, the management statement in the original language will prevail.

To listen to the original remarks by management, please join the Chinese line. Additionally, both the Chinese and English lines are open for questions. And today’s call is being recorded. Now I will turn the call over to Angie Ehang’s Senior Director of Investor Relations. Ms.

Anne, please proceed.

Anne, Senior Director of Investor Relations, EHang: Hello, everyone. Thank you all for joining us on today’s conference call to discuss the company’s financial results for the fourth quarter and fiscal year of 2024. The earnings release is available on the company’s IR website. Please note the conference call is being recorded and the audio replay will be posted on the company’s IR website. On the call today, we have Mr.

Huang Zhi Hu, our Founder, Chairman and Chief Executive Officer Mr. Zhao Wang, Chief Operating Officer and Mr. Connor Yang, Chief Financial Officer. Before we continue, please note that today’s discussion will contain forward looking statements made pursuant to 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 actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties is included in the company’s public filings with SEC. The company does not assume any obligation to update any forward looking statements, except as required under applicable law.

Also, please note that all numbers presented are in RMB and are for the fourth quarter of twenty twenty four unless stated otherwise. With that, let me now turn the call over to our CEO, Mr. Huazhi Hu. Please go ahead, Mr. Hu.

Huang Zhi Hu, Founder, Chairman and CEO, EHang: Hello, everyone, and thank you for joining our earnings call. Q4 and full year 2024 marked another record breaking period for EHAN. We continue to grow significantly, beating our guidance and setting new record high quarterly and annual deliveries and revenues. In Q4, we delivered 78 units of EH216 series product generating revenues of RMB164 million representing an increase of 239.1% year over year. For the full year, we delivered two sixteen units with the total revenue reaching RMB456 million, marking a 288.5% year over year increase.

More importantly, 2024 was a breakthrough year as we achieved positive adjusted net income and positive operating cash flow for the first year, a significant milestone in Ehon’s decade long journey. With this, Ehon also became the first Evito company in the global urban air mobility industry to achieve non GAAP profitability, further solidifying our leadership. At China’s Twenty Twenty Five Two sessions, the low altitude economy took center stage as strategic emerging industry and a key driver of new quality productivity. For the second consecutive year, it was included in the government work report, which explicitly calls for large scale demonstration projects to advance new technologies, new products and new applications to promote the sector’s safe and healthy development. Additionally, China’s NDRC, National Development And Reform Commission, established a dedicated low altitude economy development department in December 2024.

Meanwhile, the local governments in over 50 cities across China have introduced their localized development plans for the sector. These government initiatives further highlight China’s long term national strategy and strong commitment to developing the low altitude economy. If 2024 was the year of planning for low altitude development, 2025 will be the year of implementation. Since obtaining the three airworthiness certificates, we have been accelerating the commercial deliveries and operational deployment of the EH216S. Our customers have already established over 20 in vitro operational demonstration sites and e ports across 16 cities in China, including Hefei, Guangzhou, Shenzhen, Shanghai, Wuxi, Taiyuan and Wenzhou.

This year, our top priority is to launch operational demonstration projects in key cities to enable the public to experience the Evito flights firsthand. To this end, we have been actively driving the operator certification process for a pilotless passenger carrying Evito aircraft. Currently, the Civil Aviation Administration of China has completed document and on-site inspections for the first two applicants accepted. They are Ehon General Aviation, our wholly owned subsidiary substantializing in UAM Operation Services and Hei Aviation, our joint venture in Hefei. Both are now awaiting the final approval.

We look forward to the early issues of the two operator certificates marking the beginning of the commercial in vitro operation era. Looking ahead, we expect more operators to apply for the operator certificates paving the way for broader commercial flight service of the EH216S in the future. 2025 marks a pivotal year for AI technology innovation in China and globally. This year’s government work report reaffirms the nation’s commitment to the AI plus initiative, emphasizing the acceleration of AI applications across various industries, including the low altitude economy. As a pioneer in pilotless in vitro technology, Ehon continues deepening our AI plus strategy, leveraging our core technologies, including safety redundancy, autonomous flight and fleet management, along with intelligent system platform, we’re integrating AI across the whole Evito lifecycle to drive intelligent upgrades and innovative practices in commercial operations.

This includes further optimizing our key technologies and capabilities such as intelligent flight control algorithms, autonomic detection, flight road planning, command and control, human machine interactions, narrow simulation and the UAV cloud system. Beyond enhancing our aircraft, AI is set to expedite the construction and enhancement of the digital infrastructure for air mobility. Ehan will collaborate with multiple Chinese universities, colleges and relevant government departments and the commercial conglomerates to advance the integration and innovative integration of digital technologies such as five gs, six gs satellite communication sensor technologies and high precision navigation with the low altitude aviation industry. Together, we aim to build a smart low altitude ecosystem interconnecting air traffic infrastructure, flight corridors, communication and navigation systems, aerospace management and operational services. This will establish a secure, efficient and intelligent digital foundation to support commercial operations for Ehon and our customers.

On the product front, we continue to advance our multi rotor Evito series through strategic collaborations with the leading upstream companies, including Inc. Greater Bay Technology and M Power. Together, we are developing customized the next generation high energy solid state lithium batteries, fast charging batteries and electric motors. We have achieved great progress in simple design, prototyping and testing. We conducted the industry’s first Evino test to fly powered by solid state lithium batteries, delivering an impressive endurance of over 48.

We are thrilled about this major technological breakthrough that reinforces our confidence in next phase overall performance enhancements. For our upgraded lift and cruise model VT-thirty five, its prototype is in its final assembly and testing. We plan to complete the full functionality test to fly it as soon as possible and initiate the airworthiness certification process. It will be unveiled soon. For the flying car that targets the mass consumer market, we formed a cross industry strategic partnership with China Automobile to actively design and discuss new product solutions to explore innovative approach to future personal transportation.

Over the past decade, Ehan has pioneered numerous industry firsts and we firmly believe the next ten years will witness the rise of the low altitude economy, disruptive development of AI technologies and transformative development in unmanned aviation. As the saying goes, a journey of thousand miles begins with the first step. As Ehon enters its next decade in 2025, we remain steadfast in our commitment to advancing technological innovation, industry standards, operational demonstration and ecosystem development of pilotless vehicles. We aim to lead the transformation of urban air mobility, while promoting the safe, healthy and sustainable development of the industry. Next, I’ll turn the call over to our COO, Mr.

Wang. Thank you. Hello, everyone. This is Wang Zhao. We closed 2024 with record high deliveries and revenues, exceeding our performance guidance.

This success is driven by strong market demand and growing customer orders. In particular, our EH216S autonomous messenger eVido has received a 30 unit order from Shandong province, a 30 unit order from Zhejiang province along with an initial five unit order and an indicative order from another 45 units from Sunriver with the result of 78 units deliveries in Q4 and $164,000,000 in revenues. The total annual deliveries reached two sixteen units with a total revenues of RMB $456,000,000. To meet the continuously growing order demands, we’re focusing on enhancing production efficiency, scaling production capability and planning capacity expansion. Guided by our manufacturer to order principle, we’re establishing our regional and networked production base layout in South China, East China and North China.

In South China, our Phase 1 Yunfu production base currently has an annual capacity of 300 units. This year, we plan to expand Phase II with 24,000 square meters of new production lines while upgrading automation and efficiency. By 2025, Yunfu production base is expected to reach double size and a total annual capacity of 1,000 units. It also produced large number of aviation materials and components for our customers. In East China, with Hefei as our regional headquarters, we are further deepening strategic cooperation with Hefei government, partnering with advanced new energy vehicle manufacturer JAC Group and Hefei Guoxian Holdings to build an advanced, generalized and automated in vitro manufacturing base.

Additionally, we are collaborating with the Weihai High-tech Zone in China province to establish a pilotless, pilot center in vitro R and D and manufacturing base there, creating an all round collaboration system integrated production, sales and operations. In North China, we have entered a partnership with the Beijing Fangshan District government to establish a national headquarters for low altitude emergency rescue equipment. The headquarters features a 72,000 square meter factory, a training center of over 100,000 square meters and a training and exercise space of hundreds of acres. Leveraging EHang’s current flight platform and autonomous flying technologies, we plan to vigorously develop R and D production and operations in the fire emergency rescue sector, providing support for the life safety with autonomous flying vehicles. This year’s two sessions promoted large scale application demonstration actions and the safe and healthy development of the low altitude economy, which are deeply in line with Ehan’s development strategy.

We fully endorse this principle. Safety is the top priority of the sector. From the Evito design to the flight and operational system, EHON has implemented comprehensive safeguards for commercial operations. EHON has integrated the full redundancy philosophy from the IT sector into the design of our pilotless passenger in vehicles and has passed vigorous airworthiness testing and certification. The three major electrical systems within aircraft all have sufficient redundancy with backups, eliminating single point failures.

As the low altitude economy approaches a critical phase of mass adoption, the industry requires a suite of scientific comprehensive rigorous and safety oriented operational framework for Evitos. During the operator certification review process, Ehon worked closely with government agencies, regulators, academic institutions and industry associations to advance the establishment and improvement of relevant standards and regulations. To strengthen safety operations, we have internally optimized our organizational structure to establish a comprehensive safety operational system and team. From product sales, customer service, personal training, aviation material sales, maintenance and repair and software system to landing path design, route planning and integrated operational services, we are building a full cycle value chain encompassing hardware services and operations to provide customers with one stop solution. Looking ahead, our revenue streams will become more diversified.

This year, Ehon remains committed to the safety first principle while focusing on low altitude tourism as the key entry point in urban air mobility as a large scale goal to expand our UAM operational network in pioneer cities to demonstrate the low altitude economy and then systematically scaling operations from point to point connections to a fully integrated network. For example, our second UAM hub at Logang Park in Hefei, the Ivedo Operations Center at Longhua Airport in Shanghai’s Xuhui Riverside and the first automated Verti port at the UAM Center in Ruohu, Shenzhen. These flagship projects serve as typical models. Over the next three years, we will work with partners such as China Construction Group, China Communications Construction Company and other infrastructure construction units, local governments and major commercial partners to jointly develop more than 100 urban air mobility terminals and more than 100 low altitude cultural tourism terminals in national five level Scenic areas across China. We aim to build a city level, low altitude economy flight service system and carry out integrated business cooperation that combines culture and tourism, transportation, emergency response and logistics.

In 2025, based on Ehan’s current and mature flight platform and autonomous flying technologies, we will not only vigorously develop passenger business, but also develop non passenger business. The fire emergency rescue sector has already been established in the capital Beijing. Besides, Ehan is committed to developing low energy, lawn endurance logistics UAV products, which will greatly promote the development of low cost to high efficiency aerial logistics transportation. We aim to realize applications in interprovincial, interprovincial and cross border logistics scenarios. Currently, we have started exploration and layout in Beijing, Guangdong, Guangxi and Hainan.

Overseas, we are expanding our presence in Asia, Europe and South America to continuously advance our market development, flight scenarios and regulatory approvals. In Q4 last year, we conducted three consecutive days of EH216S passenger carrying flights in Central Bangkok, Thailand and plan to launch commercial trial operations this year within the sandbox areas designated by the Thai Civil Aviation Authority. In Japan, we completed a new four city flight tour, expanding our flight footprint across 16 cities and showcasing multiple use cases, including aerial sightseeing, intra island transportation, aerial logistics and emergency services. In February, EH216S completed Europe’s First autonomous Evito flight in an urban environment in Benidorm, Spain, setting a precedent for future urban air mobility deployment in Europe. Most recently, we conducted our first flight in Mexico, cumulative flight record has surpassed 64,000 flights.

As we move into 2025, we will continue to execute our global market strategy of deepening domestic business while expanding globally. We’ll remain focused on both sales and operations, further diversifying our revenue streams. Amidst China’s Trillion level low altitude economy and the Blue Ocean market, along with the great potentials for areas I see across nearly 15,000 Class A and above tourist attractions and nearly 700 cities for urban air mobility, we remain optimistic about the strong demand for our Evito product and operational services. Confident in our long term growth prospects, we expect total revenue for 2025 to reach RMB900 million, representing an approximately 97% increase year over year. Now I’ll turn the call over to our CFO, Connor, for the financial performance.

Thank you. Hello, everyone. This is Connor. Before I go into details, please note that all numbers presented are in RMB unless otherwise stated. Detailed analysis are contained in our earnings press release, which is available on our IR site.

I will now highlight some of the key points here. I am pleased to report that we closed 2024 on a strong note, surpassing expectations for both Q4 and the full year. In Q4, we achieved record revenues of 164,300,000 representing an impressive 190% year over year growth. For 2024, our total revenues reached an all time high of $456,200,000 dollars up a substantial $2.89 percent year over year. This outstanding performance was primarily driven by strong Evito market demand along with our well coordinated and impactful strategic initiatives in key areas including OC certification, production scaling and commercial readiness.

On deliveries, we set a new quarterly record with 78 units of the EH216S delivered in Q4, marking a 239% year over year increase and a 24% sequential growth. For 2024, total deliveries of the EH216 series reached two sixteen units, up 315% from 52 units in 2023. Our gross margin for Q4 was 60.7%, slightly down from 64.7% in the same period of 2023 and on par with Q3. For full year 2024, the annual gross margin was 61.4%, a slight decrease from 64.1% in 2023. The decreases in gross margin were primarily due to changes in the revenue mix and higher unit costs for the EH216S.

Despite these modest declines, our gross margin remained high at 60%, highlighting our competitive edge and pricing power in the Evito sector. Turning to the operating expenses. In Q4, adjusted operating expenses, which is defined as operating expenses excluding share based compensation, were $78,200,000 up 22% year over year from $64,200,000 but down 10% from Q3. The sequential decline reflects cost control and efficiency optimization, while the year over year increase was mainly due to the expansion of sales channels, higher employee compensation and investments in new Evito models. In addition, we continue to actively invest in the development and iteration of new Evito models and technologies since we obtained the three airworthiness certificates.

For 2024, adjusted operating expenses were $290,100,000 up 28.2% from $226,300,000 in 2023. Strong top line growth and cost efficiency contributed to a solid improvement in non GAAP profitability. Adjusted operating income for Q4 was $27,900,000 a significant improvement from the adjusted operating loss of $24,900,000 in Q4 twenty twenty three and up 208.2% from Q3. In Q4, we realized the third consecutive quarter of adjusted net income for $36,400,000 a sharp improvement from the adjusted net loss of $22,100,000 in Q4 twenty twenty three and up 132.3% from Q3. For 2024, we achieved the first ever annual adjusted net income of $43,100,000 a significant improvement from the adjusted net loss of $139,000,000 in 2023, marking our entry into a new phase of sustainable and accelerating profitability.

Alongside a strong revenue growth and improving profitability, we also maintained a solid liquidity position. As of the end of Q4, our total cash and cash equivalents restricted short term deposits and short term investments was $155,001,000 This strong cash balance provides us with strategic flexibility to support growth initiatives, invest in innovation and enhance market competitiveness. Notably, we recorded our fifth consecutive quarter of positive operating cash flow and the first ever annual positive operating cash flow, amounting to approximately $160,000,000 in 2024, demonstrating our ability to generate a sustainable cash flow while scaling operations. Looking ahead to 2025, we are in the final stretch of obtaining operator certificates. We believe that the achievement of this key milestone along with our active progress in eVito commercialization readiness, operational deployments, production scale up, technological innovation and a global market expansion will further solidify our industry leadership, a strong foundation for accelerated growth and drive us into a new growth cycle.

Based on our current progress and market demand, we’re expecting a total revenue in 2025 of approximately RMB900 million representing a year over year increase of 97%. Thank you. Thank you.

Wang Zhao, Chief Operating Officer, EHang: Now let’s

Conference Operator: open the call for questions. Your first question comes from Ting Song from Goldman Sachs. Please go ahead.

Wang Zhao, Chief Operating Officer, EHang: So I thank you for taking my question. I just have a question which is regarded on the production capacity. I know we are expanding our production capacity for the Phase II. So wondering what kind of added production capacity we are looking at for the Hefei production facility by the end of twenty twenty five and 2026? And also if we are talking about a total production capacity of 1,000 units, so how much volume how much volume are we seeing?

So how much will be the utilization rate I’ll be looking at to between 2025 and 2026? Thank you. I’ll take this question. For Yunfu Phase II for the capacity expansion, this will complete this year, reaching a total annual capacity of 1,000 units. And the Yunfu Phase I and Phase II production lines will have specialized focuses.

They will be focusing on aviation materialscomponents manufacturing and aircraft assembly, respectively. So additionally, with our joint venture with Empower, we are also upgrading the production lines, improving the automation and efficiency in manufacturing and supply chain management. With regard to Hefei, we plan to establish a JV with JAC Motors and Hefei Guoxian Holdings to build a modern low altitude aircraft manufacturing facility. And according to the planning of the government, of the local local government, the expansion of construction work is expected to be completed in one point five and two years. And additionally, we also have planned for production in Weihai, Shendong province and Fangshan District of Beijing, as previously mentioned.

And our expansion for the capacity follows manufacturing to order principle. So we will adopt a systematic growth strategy across different parts of China, say, South, East And North China, and they will have specialized management for different product lines, including passenger transport, logistics and emergency response and firefighting. Thank you.

Conference Operator: Thank you. Your next question comes from Cindy Huang from Morgan Stanley. Please go ahead.

Wang Zhao, Chief Operating Officer, EHang: Thank you for taking my question. First, congratulations on the strong Q4 results. Could management provide additional color on the exact timeline for our IOC application? What are some of the milestones we are expecting with regard to the application? And my second question is that when are we going to achieve a GAAP profitability with our collaboration initiatives and also the construction of many of the infrastructure and facilities?

Can you please offer a ballpark CapEx and OpEx for the coming quarters of this year? Thank you. Let me take your first question and we are glad to announce that. So we have so the CAAC has completed the acceptance and on-site inspection of these two AC applicants. That’s for our He Yi, a subsidiary company.

And we are now just waiting for so we have pretty much completed all the required work and just waiting for the final regulatory approval. So we also expect these OC will be rewarded to us as soon as possible. But so the inspection and everything I mentioned itself is already a milestone and these will provide or provided the basis for us to roll into commercial operations as soon as possible. I want to emphasize that these will be the first unmanned Evito OC issued under the new interim regulations for the UAV flight management. So the certification process itself is establishing and also refining the standards.

So it is a significant responsibility that will set crucial precedence for the safe commercial operation of EH216S and all unmanned passenger carrying aircraft in China? Thank you. Okay, sure. This is Connor. I will take your second question.

As we have mentioned that we have achieved a non GAAP profitability in 2024. And with your question of how and when are we going to achieve a full year GAAP profitability? So according to our plan and also our estimated revenue growth of 97%, which is R900 million dollars revenue in 2025, we expect it to achieve GAAP profitability quarterly in the second half of twenty twenty four. However, for full year GAAP profitability, that will be sometime in 2026. So with regard to CapEx, our full year CapEx guidance for 2025 will be USD 14,000,000 and the CapEx will be used in scaling up our production capacity in Yunfu Phase II, Weihai, Huai, as well as our planned production site in Fengshan District, Beijing.

And we will also use some of the money for developing models that will be used in emergency response and logistics. Plus, there’s going to be investment in construction of our new headquarter in Beijing in Guangzhou? And we expect the OpEx to grow at 40% year over year in 2025. Thank you.

Conference Operator: Thank you. Your next question comes from Wei Shen from UBS. Please go ahead.

Wang Zhao, Chief Operating Officer, EHang: Two questions. Good evening, management. Two questions. One is on the gross margin outlook and the other one is on financing plans in 2025. Our targeted gross margin is around 60%, give or take.

So to achieve that, we are going to adopt two initiatives. For one, we are going to invest more efforts, roll out more product lines to make our product offering more diversified with the diversification that’s going to help drive up the gross margin. And the second initiative that we’re planning to for whatever just mentioned, that will going to be help grow the gross margin. However, we’re planning to do distribution model, which kind of sacrifice the gross margin a little bit, but give or take, we’re aiming 60% gross margin. So last year, we recently released nearly USD 100,000,000 and also our current cash reserves exceeded RMB1.1 billion.

And as I mentioned that our positive cash flow is around RMB160 million for 2024. So as you can see that our business is self we have a business of sustaining capability and healthy development. So with regard to this year, we have accelerated market and business expansion, seeking additional financing to strengthen our capital position. This will support new EBITDA technology and product development, market expansion, new headquarters construction, production facility development and team growth, so ensuring sufficient funding for our next growth phase. Thank you.

Conference Operator: Thank you. Your next question comes from Laura Lee from Deutsche Bank. Please go ahead.

Connor Yang, Chief Financial Officer, EHang: Hey, thank you for taking my question and congrats on a strong year. So my first question is about the air taxi part. So we noticed there are increasing announcements of UEM, either you’re building like an experience center or development of digital infrastructures. So just wondering, is there any rough timeline for the Air Taxi operation and any notable milestones in between?

Wang Zhao, Chief Operating Officer, EHang: Thank you. This is Zong Zhao. I will take this question. While air taxi services remain our long term vision and mission, Aviation prioritizes safety above all, requiring careful step by step progress. So over the next couple of years, we will first establish operations in domestic tourism areas to accumulate enough data before we venture into air taxi services.

And also air taxi implementation depends on ground infrastructure, particularly 30 ports and many low altitude digital infrastructures, including communication, navigation, surveillance, air traffic management. Right now, cities across China have put forward clear and specific plans and timelines for the infrastructure construction. And with many planning hundreds to thousands of dirty ports and routes over the next three years. As an industry pioneer, Ehan is actively contributing to policy development and infrastructure planning. Our partnerships with CCCC and CESCEC and many local governments are actually helping to build the ecosystem and framework for air taxi operations.

Huang Zhi Hu, Founder, Chairman and CEO, EHang: Thank

Conference Operator: you. Your next question comes from Rongyuan Zhu from Citix. Please go ahead.

Wang Zhao, Chief Operating Officer, EHang: Thank you for the presentation and thank you for taking my question. My questions are on your overseas market. The first one is the progress of our OC certification as well as the orders. What kind of situation are we at right now? And my second question is on our plans on diversifying our revenue streams.

So with that, I mean, particularly, what kind of revenue growth or mix are we looking at outside of manufacturing of these flying vehicles? So any guidance or plan on that? I’ll take the question. Since Q4, we have completed flight demonstrations in Japan, Thailand, Spain, Mexico and many others, expanding our flight footprint to 19 countries. Last year, we delivered orders to overseas markets that includes UAE, Japan and Dominica.

As pioneers in pilotless passenger carrying aircraft, we are actively engaging with civil aviation authorities worldwide through local flight demonstrations and discussions to promote the airworthiness certification for this new aircraft. The CAAC is very supportive of our efforts in applying for international certification, and we are working together to promote the certification of the unmanned passenger carrying aircraft overseas. We are actively exploring some innovative pilot first approaches to expedite the international operations of our Evidos? Thank you. On your second question of diversifying our rapid extremes, Ehon maintains a new strategy of both operations and sales.

So we position ourselves beyond just being an Evidio manufacturer. We build a complete lifecycle value system for our customers featuring hardware, service and operations. So this includes product sales, customer service, personnel training, aviation materials, maintenance, software systems and route planning and operations. As the Evidou commercial operations scale up, Ehan will develop more diversified revenues streams. And additionally, I want to tell you that beyond the passenger transportation, we are intensifying our efforts on logistics and firefighting business this year to broaden our revenue sources.

Thank you.

Conference Operator: Thank you. Your next question comes from Yiming Wang from China Renaissance. Please go ahead.

Wang Zhao, Chief Operating Officer, EHang: Thank you for taking my question. I got two questions. One is on the updates on new orders and the second question is on the collaboration with the JAC production base. So what kind of roles will JAC and EHON play in in this JV? And what kind of profit split and also cost split we are looking at between the between you two?

Thank you. Our domestic demand is very strong with the current intentional order is exceeding 1,000 units plus many more orders are under negotiation. Just so you know that we have dozens of clients who place order of dozens of units at each time. And additionally, you should know that China has nearly 15,000 grade A and above tourism attractions for aerial sightseeing. And there are nearly 700 cities that offer or planning air mobility services.

So we remain optimistic about the strong demand for our Evito products and operational services. Thank you. And with regard to your second question, the JV partnership with the JAC is actually carried out under the support with the support of the Hefei municipal government. And we are building a JEV with JAC and Hefei Gua Shen Holdings Corporation to build Evidou production base. So JAC has accumulated expertise in manufacturing and the supply chain management in automobile sector, whereas for us, we are leading in the development, production and OC in Evito sector.

So this corporation will bring the best of us and leverage both parties’ respective advantages. And with regard to the specific details of this JV, it is still under discussion. And I’m sorry, I couldn’t disclose more at the moment. Thank you.

Conference Operator: Thank you. Your next question comes from Yu Chen from Guangzhou Securities. Please go ahead.

Wang Zhao, Chief Operating Officer, EHang: First of all, thank you for taking my question and congratulate on the breakthroughs and the strong results achieved in 2024. I got a question on the financials that I would like to double check with the management. So in Q4, we have seen that management and R and D related expenses grow significantly quarter over quarter in Q4. So how do how does management view the trends for these expenses for 2025? You know that the company is still expanding, and that’s why we are seeing substantial revenue and delivery growth over the past year.

We are also expanding our team, leading to increased expenses. However, expenses as a percentage of revenue have decreased significantly. And looking into this year, we expected the sales and R and D expenses to grow, definitely for sure, with moderate growth in management expenses. So as revenue growth will outpace expense growth, we expect the ratio of SG and A to revenue to continue declining. As you know, that we are projecting a 97% growth in our revenues, whereas our operational growth related costs will grow at 40% year over year.

Conference Operator: Thank you. Your next question comes from Ling Liu from Gocheng Securities. Please go ahead.

Wang Zhao, Chief Operating Officer, EHang: Thank you. Two questions. One is on the EH216 battery. So what’s the progress on the next generation lithium batteries? And what are the expected upgrade timeline and the anticipated flight endurance improvements?

How are that looking? Second question is on the product of the VT 35. What’s the update on that? And when are we planning to submit to the TC application? Thank you.

With regard to battery, right now, we’re pursuing two directions for the battery involvement. First, on the fast charging batteries fast charging, we are partnering with Greater Bay Technology and currently testing samples that could significantly reduce the charging time. So that’s for one. And secondly, on the solid state batteries, our strategic investment in INX Energy is progressing well. We are having very excellent cooperation and R and D breakthroughs.

So we have doubled the EH216 of flat endurance, and we’ll continue fine tuning the performance and conducting more scenario validation. So we’re aiming for mass production and installation by the end of this year. Thank you. With regard to the long haul model, VT35, right now, the development prototype is currently in its final assembly and debugging stage. We plan to complete the full function flight testing soon and initiated the airworthiness certification project.

It will be unveiled to the public shortly.

Conference Operator: Thank you. Seeing no more questions in the queue, let me turn the call back to Misan for closing remarks.

Wang Zhao, Chief Operating Officer, EHang: Thank you, operator, and thank you for all for participating on today’s call. If you have further questions, please contact our IR team by e mail or participate in the following investor events through the calendar information provided on our IR website. We appreciate your interest and look forward to our next earnings call. Thank you.

Conference Operator: Thank you all again. This concludes the call. You may now disconnect.

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