Earnings call transcript: WeRide’s Q2 2025 shows revenue surge

WeRide (NASDAQ:WERIDE), currently valued at $2.66 billion, reported its second-quarter 2025 earnings, revealing a substantial increase in revenue and significant strides in its autonomous driving technology. Despite a net loss, the company’s expansion efforts and product innovations have positioned it as a notable player in the autonomous vehicle industry. According to InvestingPro analysis, the stock appears slightly overvalued at its current price of $9.68, with analysts setting price targets between $12.97 and $21.03.

Key Takeaways

• Total revenue surged by 60.8% year-over-year to $127.2 million.
• Product revenue increased by 309.6%, with robotaxi revenue growing 836.7%.
• The company logged over 14 million kilometers in autonomous driving.
• WeRide expanded its robotaxi operations to 10 cities across 6 countries.
• The company maintains a strong cash reserve of $5.8 billion.

Company Performance

WeRide’s second-quarter results highlight a robust performance, with total revenue climbing 60.8% compared to the previous year. The company’s focus on expanding its autonomous driving operations globally has contributed to this growth. WeRide’s product and robotaxi revenues saw significant increases, reflecting the company’s strategic emphasis on innovation and market expansion. InvestingPro data shows the company maintains a healthy gross profit margin of 29.44% and an impressive current ratio of 13.6, indicating strong short-term liquidity. For deeper insights into WeRide’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Total revenue: $127.2 million, up 60.8% year-over-year
• Product revenue: $59.8 million, up 309.6% year-over-year
• Robotaxi revenue: $45.9 million, up 836.7% year-over-year
• Gross profit: $35.7 million, with a 28.1% gross margin
• Net loss: $406.4 million, a slight decrease of 1.7%
• Cash reserves: $5.8 billion

Outlook & Guidance

WeRide aims to expand its fleet significantly, projecting hundreds of vehicles in 2025 and potentially thousands by 2026. The company plans to focus on markets with supportive regulatory environments and continue its investment in research and development.

Executive Commentary

"We are the only company in the world currently doing both robotaxis service using L4 level autonomous driving technology and supplying systems for mass-production cars," said Tony Han, CEO. This highlights WeRide’s unique position in the market. CFO Jennifer Lee emphasized the strategic importance of their global taxi operations, stating, "Our global taxi isn’t just part of our product lineup. It’s the heart of our global strategy."

Risks and Challenges

• Regulatory hurdles in expanding autonomous driving operations.
• Market competition from established players in the U.S. and China.
• Potential delays in technology development impacting growth timelines.
• Economic fluctuations that could affect investment and consumer adoption.
• Reliance on partnerships for market penetration and technology advancement.

Q&A

During the earnings call, analysts inquired about WeRide’s multi-product strategy and its advantages. The company also addressed questions regarding its technology leadership in autonomous driving and the challenges of global market expansion. Additionally, WeRide highlighted developments in AI and large language models as key components of its future growth strategy. InvestingPro reveals an overall Financial Health score of "FAIR," with particularly strong ratings in cash flow management. The company’s revenue is forecast to grow by 81% in FY2025, according to analyst projections available on InvestingPro, which offers exclusive access to detailed financial metrics and expert analysis for over 1,400 US stocks.

Full transcript - Wildhorse Resource Development Corp (WRD) Q2 2025:

Conference Moderator: Good morning, good lady, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to WeRide’s Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. The company will be hosting a question and answer session after management’s prepared remarks. Please note that today’s event is being recorded.

The company’s financial and operating results were released by the Newswire earlier today and are currently available online. Joining us today are WeWrite’s Founder, Chairman and CEO, Doctor. Tony Han and CFO and Head of International, Ms. Jennifer Lee. Before we continue, I would like to refer you to the Safe Harbor statement in the company’s earnings press release, which also applies to this call as of today’s call will include forward looking statements, including WeWrite’s strategies and future plans.

Actual results could differ materially from those stated or implied by these forward looking statements as a result of various important factors, and please refer to the Risk Factors section of the company’s U. S. Prospectus file with the SEC for a full disclosure of these risk factors. Please note that all numbers stated in the management’s prepared remarks are in RMB terms, and we will discuss non IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in the company’s earnings release and filings with the SEC. With that, I’ll now turn the call over to the company’s founder, chairman, and CEO, Doctor.

Tony Han. Please go ahead. Ladies and gentlemen, please stand by. Your conference will begin shortly. We do appreciate your patience.

Please stand by. Ladies and gentlemen, we do appreciate your patience. Please stand by.

Tony Han, Founder, Chairman and CEO, WeRide: Hello? Hello? Can you hear me now?

Conference Moderator: Tony, you may begin.

Tony Han, Founder, Chairman and CEO, WeRide: Hello? Can you hear me? Can you hear me now? Just want to double check with you.

Conference Moderator: Tony, your line is loud and clear. You may begin.

Tony Han, Founder, Chairman and CEO, WeRide: Okay, thank you. Sorry about this technical problem. I will start now. Hello, everyone, and thank you for joining us today. This past quarter has been post exciting and full of progress.

As we write, we remain committed to our long term vision, transforming the future mobility through safe and accessible driverless solutions. Over the past few months, our teams have reached significant milestones, most notably the rollout of our robotaxis service to Dubai, Riyadh, and Shanghai. These new locations expand our global footprint to 10 cities around the globe, making a major step forward. We also have we also partnered with Lenovo to launch our latest computing computing platform, HPC three point o. This breakthrough offers a new level of cost effectiveness and scalability for level four autonomous vehicles.

With that in mind, let’s take a look at some of the key highlights from this quarter. We have made major progress in expanding our global robotaxi operations, and this is just beginning. Today, we operate the largest public commercial robotaxi fleet outside The US and China. The Middle East is a strategic priority for We Ride, and it will remain one of our key growth regions throughout 2025. In 2023 we became the first company to be granted a nationwide permit in UAE and last month December, we launched a partnership with Uber.

In just six months, the WeRide Uber robotaxi fleet have tripled in size, now covering roughly 50% of our Dabi’s core areas, including major highways and the airport. By year end, we aim to further scale the fleet to hundreds of vehicles and expand service into new areas such as Khalifa City, Master City, and the mall of Downtown Abu Dhabi. This growth is expected to double our ride volume. On average, each robotaxi is expected to complete thousands of rides in a typical twelve hour shift with each typical right, existing exceeding six kilometers. We have also begun driverless testing in Abu Dhabi, paving the way for commercial driverless launch in the months ahead.

We couldn’t be more excited about what to come. In June, we kicked off testing in Dubai and anticipate launching of our pilot operation later this year. During this initial phase, a safety driver will be present in a mid in a vehicle, much like our approaching of Derby. Our ultimate goal is to introduce our food driverless service into by next year. As part of our strategic plan with Uber, we are expanding commercial robotaxis service to 15 additional cities.

Earlier this month, we partnered with the Transportation General Authority of Saudi Arabia to launch the kingdom’s first ever robotaxi pilot in Riyadh. The initial rollout covers key locations, including King Khalid International Airport, major highways, and the several city center destinations. Riyadh is now third city where we ride and Uber have introduced robotaxis services together. We are also making waves in China, where our robotaxis service not only serves as a proving ground for our technology, but also plays a vital part of our commercial operations. This month, the World Artificial Intelligence Conference at this month at the World Artificial Intelligence Conference, we announced our debut in Shanghai through a collaboration with Cherry and Jin Jiang taxi.

Together, we are launching our towns rights to major cities, major city landmarks including the Shanghai World Expo Center, Hudong International Airport and Shanghai Disney Resort. On the heels of our robotaxis success, new opportunities are emerging for the commercialization of our other L4 products. In Guangzhou, our Robovan W5 has secured a second round off permits following its successful debut in April. In Singapore, we launched fully driverless Robo bus operations in Sentosa, the first of its kind in Southeast Asia. Meanwhile in Paris, we partnered with Renault Group for the second consecutive year to provide robot shuttle service at a prestigious Holland Gaho tennis tournament.

These milestones reflects our commitment to safety and our proven track record of transporting transporting tens of thousands of passengers around the world. What truly set us apart isn’t just our ability to commercialize, but our relentless drive to innovate. Earlier this month, we unveiled HPC three point o, our proprietary computing platform developed in collaboration with Lenovo, HPC three point o featuring dual NVIDIA thorax chips. It delivers up to 2,000 tops of AI computing power, making it one of the most powerful computing platform for L4 autonomy. This full auto grid computing platform with a design ten year of ten years of lifespan is rigorously tested under extreme weather conditions.

Not only does it deliver exceptional performance, it also cut the cost of our autonomous driving suite by 50% positioning we write strong for large scale commercial deployment. HPC three point zero is already integrated into our GFR robotaxi, making it the world’s first mass product produced level four upon the vehicle using the NVIDIA store chip. In partnership with Cherry, we have also introduced our next gen robotaxi CER, which is now ready for mass production. CER is filled with five layer redundancy across the core systems, including the steering system and braking system, communication system and power supply, ensuring we maintain the same high safety standards proven over past two thousand two hundred days of public operation. As we continue to scale our operations policy compliance remains a critical pillar for our strategy.

We are incredibly proud of the trust, we have earned globally. We are now the only company in the world, whose products were granted autonomous driving permit in six countries. Each of these permits represents not only the right to operate, but also a stem of recognition, showing that all vehicles meet the high standards wherever we go. To date, we have logged more than 14,000,000 kilometers of real world autonomous driving mileage, continuous continuously making our systems smarter, safer and more reliable. Now I will pass to our CFO, Jennifer Lee to discuss the company’s financial performance.

Jennifer Lee, CFO and Head of International, WeRide: Thank you, Tony. Hello, everyone. Before we dive into the Q2 financial, I want to highlight that all figures are in RMB and comparisons are year over year unless stated otherwise. Now let’s discuss our second quarter financial performance. We delivered total revenue of $127,200,000 up 60.8% year over year, driven by strong growth across both product and service segments.

This performance underscores accelerating commercial momentum of our global strategy. Strategy. Product revenue delivered a strong growth of 309.6% year over year to 59,800,000.0 in Q2, driven by steadily increasing demand for our Robotaxi and NovoSlippers. Robotaxi revenue reached a record high of 45,900,000, up 836.7% year over year, marking its highest ever contribution to group revenue at 36.1% since 2021. This growth reflects our global market leadership.

We now operate the largest robotaxi fleet in The Middle East with rapid expansion in Abu Dhabi and Saudi Arabia’s first ever robotaxi pilot operation in Riyadh. We also have strong regulatory momentum. We read it’s the only company with autonomous driving permit in six countries, which means our technology meets the high global safety standard. This demonstrate our technology advantages and encouraging success of our globalization strategy. Service revenue grew 4.3% year over year to 67,400,000.0, supported by a 35,800,000.0 increase in intelligent data services and L4 operational support, which is partially offset by the completion of legacy ADAS R and D contract.

Group level gross profit increased 40.6% to 35,700,000.0 for the second quarter. There’s a group level gross margin of 28.1% underscoring our continued commercial leadership and industry. This healthy margin reflects the strength of our international expansion and Robotexa business growth. Operating expense increased 42.5% year over year to 4 and $87,800,000 with R and D accounting for 65.4% of the total. To break down this further, R and D expense increased by 33.1% to $318,900,000 in the 2025 compared to the same period of last 2024.

Excluding share based compensation, R and D expense increased by 50.5% to two and eighty point three million. The increase in R and D expense was primarily due to an increase of 45,100,000.0 in personnel related expense from headcount increase, as well as average salary increase. Also, is an increase of 31,500,000.0 in services for R and D projects. Administrative expense increased by 71.3% to 155,100,000.0. Excluding share based compensation, administrative expense increased by 93.8% to 75,600,000.0.

This increase was primarily due to an increase of 28,900,000 in professional service fee, mainly related to audit and legal compliance services. Selling expense increased by 12.9% to 13,800,000.0. Excluding share based compensation, selling expense increased by 17.5% to 12,100,000.0. We continue to prioritize our talent strategy, recognizing that a growing team of high caliber profession remains pivotal to sustain our technological leadership. Together with our expanding commercial outreach, those investments are laying a resilient foundation for long term competitiveness.

Our net loss decreased by 1.7% to $406,400,000 in the 2025. On a non IFRS basis, the net loss increased to $306,600,000 mainly due to continued investment in R and D and the broader operating activities. As of 06/30/2025, we held a total capital reserve of $5,800,000,000 including $4,100,000,000 in cash and cash equivalents and time deposits, 1,700,000,000.0 in wealth management products and 15,400,000.0 in restricted cash. We believe our sustainable liquidity position will continue to fuel robust R and D effort and support our scale up ambitions. In conclusion, our recent progress and driverless activities, which is now underway in Abu Dhabi, and the recent launch in Ria, Shanghai and Singapore validate our path to commercialization.

This Robotech’s unit economic improving and partnership accelerating, we are confident our ability to convert global potential into long term value. With that, operator, we are now ready to take some questions.

Conference Moderator: Thank you. And one moment for our first question will be coming from LifeMuseo of CICC. Your line is open.

LifeMuseo, Analyst, CICC: Good evening, Tony and Jennifer. Congrats on your strong results, And thanks for taking my questions. For Tony, could you elaborate a little bit about how should we consider your company’s multi product strategy? What is the relationship between Robotaxi and other products such as Robo Bus? And for Jennifer, we see an expanding revenue contribution of your Robotaxi business.

Is this trend going to sustain in the coming quarters? And what are the key drivers? Thanks.

Tony Han, Founder, Chairman and CEO, WeRide: Okay, so thank you for the question. I will answer the first one and I think Jennifer can follow-up with the second one. So this is about our multi product strategy I think over all over the world. Among all autonomous driving companies, I mean, the leading top top rated, leading autonomous driving company. We ride is the only company have this multi product strategy.

And, you know, at V Ray, we take a one platform approach that is we do build up a universal platform called V Ray one. And that one actually that platform powers multiple urban mobility applications, including all of the products you mentioned. Among all of this robotaxi is our flagship user case. And, but what is the advantage of this one? Okay, the advantage one, there are several advantages of this strategy wise like this setup give us access to a huge pool of high quality of wellbore data.

That means the data you collected with a robot sweeper or with a robot buzz actually can be used for robotaxi, and, you know, during over the past eight years people are talking, keep on talking about in order to build a great robotaxi or any of our products you need cover lots of long long tail corner cases. This corner cases are very rare. There’s no guarantee like you can use your robotaxi to capture all corner cases. However, if we have Robo sweeper, Robovan, and Robo bus all over the city, then we have much bigger four or five times bigger chance to capture this very precious corner case to it so that we can improve our system. And besides, you know, for the marketing expansion region reason, not every market is actually ready for full blown robotaxis service yet.

And, you know, that is the reality. So our multi product lineup gives partners and governments, the flexibility to roll out autonomy in a way that fit in a way that fits their pace and priorities. For example, take Paris, Singapore and Japan as examples. These regions, these countries actually having some problem of aging population, and a shrinking public transport workforce. For them, Robo bus is often the entry point to alpha autonomy.

Starting with Robobus actually help us to build public trust and gives regulate regulators time to develop the right framework. It’s a smart way to actually avoid costar problem that often stop the new tech rollouts. And also I’m proud to share with you that because all these products and we have already worked with all governments. I’m appointed as a member of Singapore steering committee on AVs. This committee actually is chaired by the acting minister for transport in Singapore, Mr.

Jeffrey Xiao. The committee is tough to look into ensure AVs are safe, safely integrated into Singapore’s land transport system, create new jobs and improve everybody’s connectivity for residents. Actually, it is a great honor for us to contribute to this important national initiative, and also to support the development of AVs through strategic guidance ship and leadership. So, overall, I think with all this product, and we have many more opportunities. Many times more efficiency in data collection, and in many times more robust in supply chain.

And so I believe this strategy is one key factor that make V Ray so successful. That’s all I want to say about this first question. And Jen, do you want to answer the second question?

Jennifer Lee, CFO and Head of International, WeRide: Yeah, I’ll take the second question. For the revenue contribution on Robotexa side, we have seen strong momentum in our Robotexa revenue. And we believe this trend is here to stay. In Q2 twenty twenty five, Robotex revenue hit a record high accounting 36% of the total revenue. And going forward, we expect it to continue and remain to be a major revenue contributor as we continue to scale globally and lead the charge in commercialization of the robotaxi.

So, our core engine are driving the growth are below. So first of all, is on the fleet expansion side. As we roll out more robotaxi and launch operation in key overseas market, a lot of fleets directly translate into stronger revenue. Secondly, our robotaxis runs a triple growth engine. It started with the hardware sales and it follows with the service revenue as well as the revenue sharing.

Well, the hardware anchors the growth today, the service revenue as well as the revenue sharing model offers the long term upside as our operation mature. Thirdly, we’re targeting markets with a stronger unit economics, especially in those with a higher price per kilometer. This is a key factor in scaling revenue efficiently. So, global taxi isn’t just part of our product lineup. It’s the heart of our global strategy.

That will be all from my answer. Yeah.

LifeMuseo, Analyst, CICC: Got it. Thank you, Tony and Jennifer. That’s helpful.

Conference Moderator: Thank you. And our next question will come from Tim sale of Morgan Stanley. Tim, your line is open. Again, Tim of Morgan Stanley, your line is open.

Tim Sale, Analyst, Morgan Stanley: Yes, thank you very much. Sorry I forgot to unmute. This is Tim from Morgan Stanley. Thanks, Tony, Jennifer and Tim for taking my questions and congratulations on the solid progress in robot active business. I have two questions.

The first one is about the auto grade HPC three point zero platform. I’ve heard these are super impressive that the new generation platform could cut the cost by 50%. So just want to know that’s when are we going to deploy the HPC two point zero platform on our next generation robotaxi, and we’re now going to start in mass production. And in the meantime, also want to know if there will be any design changes to revise the next generation robotaxi that can help to further enhance the passenger user experience. So that’s my first question.

Thank you.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. Thank you, Tim. So, you know, first of all, for about the one question, I think HPC three point zero is already on road. So, you know, we have spent more than two years working on this very exciting project. And now finally, got the results, a very satisfactory results.

Our Robotex GXR is the worst first mass production l four autonomous driving robotaxi, actually with NVIDIA SOAR platform. You know, as people know, like, SOAR is currently the most advanced auto grade computational platform produced by NVIDIA. So we have achieved that. Okay? So I do believe HPC three point o, you know, with that dual SOX platform dual SOX chipset is a game changer.

Why is that? Because, you know, the computational power is absolutely next next level. Previously, you know, competitors’ computational platform is around anything between 500 TOPS to at most 1,000 TOPS. But now our fully auto grade computational platform is 2,000 tops. And also, this actual horsepower allow us to process more sensor data using large models and have lower latency all in real time.

So that will lead must that must lead to much better user experience. And I also want to emphasize making a computational platform of 2,000 tops is quite hard. Make it full auto grade is much harder. Okay. This is actually really critical.

And, you know, there’s a lot of industry standards such as ISO two twenty six twenty six two and for functional safety and AECQ 100 for quality. We have have to handle all of this and actually the HPC three point zero meet these standards. And and also, know, HPC also cuts our manufacturing cost by up to 50%. So it’s ready for large scale mass production. That’s very important breakthrough.

And also one major improving in terms of our planning of algorithm is actually it’s, you know, with this enhanced computational platform, we can launch groundbreaking free pickup drop off called to do setup for users. Now at Beijing, Yidong, and we achieved this kind of to do to do functionality. So pick up, drop off. Of course, you cannot drop off at any any any play any streets that is not allowed to pick up and drop off. But as far as the municipal government allow us to pick up and drop off, we can we can achieve that kind of functionality.

So the user experience has been improved a lot. Okay. That’s my answer to the question.

Tim Sale, Analyst, Morgan Stanley: That’s super helpful. Thank you, Tony. And my second question is also about robotaxi. As Jennifer mentioned during the presentation, we rise leased the pack to hold six eighty permits in six countries. And I think Tony also mentioned that this is just beginning.

So just want to know that how many permits currently are in our pipelines where we can get by end of this year. And separately, excluding China, what’s revised current tree size in those countries globally, and what’s our expansion target for ropatexy by end of this year and for 2026? That’s my second question. Thank you.

Jennifer Lee, CFO and Head of International, WeRide: I’ll take this question. So, about the permit side, right? The granting of the permit is a rigorous progress in each country. We are making responsible progress after step along the way. Now we have obtained the driverless testing permit in Abu Dhabi, and we expect to upgrade the testing permit to driverless commercial permit in the coming months, which is a huge step for Abu Dhabi.

And we will have a similar progress will take place in other countries. And on fleet size wise, we have now the totally we have a fleet size of more than 1,300 autonomous vehicles globally, and we’re just still growing. And now about a little bit less than one third of the fleet is outside of China. In the domestic market, so our focus will be just on steady policy aligned expansion. So wherever the policy allows us, we’ll just go to those places.

We are building on those existing open zones and opened like a regulatory progress. And recently we just got the autonomous driving permit in Shanghai together with Cherry. And in China, we expect by end of this year, we aim to add hundreds more vehicles to our fleet. And internationally, which is more a focus, like for the earning. And you can see, you can tell that we can see that tremendous upside, especially in those regions like say Middle East, Singapore, Europe, where the market potential and a unit economic are highly attractive for robotaxi deployment.

Government in those regions are also setting very ambitious goals. I’ll give you one example. The Saudi Arabia Transport General Authority has publicly committed that they will reach 25% autonomous driving penetration by 02/1930. Similar plan were also announced by Abu Dhabi and by Dubai. So that sends a clear signal that autonomous driving products will be a key part of the region’s future mobility.

So we did a simple math. If by hitting like a similar penetration rate in the region, that will give us the room of 30,000 or more like 80 products like in this region, like for TurboTax as example. Yeah, so we’re moving fast to capture those early opportunities in those developed countries. So our goal is to develop hundreds and maybe next year thousands vehicles globally. If they will do hundreds and next year hopefully, if the permit allows, we will love to do thousands.

And focusing, we will like to focusing on those markets where the demand, the support and the infrastructure are already lining up. Those are the targeted area. Yeah, I hope that answered your question, Tim.

Tim Sale, Analyst, Morgan Stanley: Yes, thanks for sharing all the details and congratulations again, Tim. Looking forward for more good news. Thank you.

LifeMuseo, Analyst, CICC: Thank you, Ding. Thank you.

Conference Moderator: And our next question will be coming from Jiajia Shen of JPMorgan. Your line is open.

Jiajia Shen, Analyst, JPMorgan: Yes, thank you for taking my question. This is Jiajia from JPMorgan. I have two questions. The first one is regarding the business model of your robotaxi in long run. How should we think about it?

Through your collaboration with ride hailing platforms, what kind of role will they play? And my second question is regarding the HPC. It’s glad to see you launched the new generation of the computing platform. And my question is, how is HPC three point zero going to drive your scaling from here? And what’s its implication to your unit economics?

Thank you.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. So can you hear me? Can you hear me clearly? I’m not sure.

LifeMuseo, Analyst, CICC: Yeah.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. Good. Okay. Okay. So so first of all, about the robotaxi business model.

I think I think, you know, to rewrite. So the key keywords for we write business model is actually partnership. So, for we write robotaxis strategy, we want to develop and build a deep win win partnership with top mobility players in, in, in the market. And that means like we focus on what we are good at. Okay, we are good at developing L4 level autonomous driving technology.

And while at the same time, our strong partners will bring their expertise in fleet operations, maintenance, marketplace and customer service. So, this kind of collaboration will build up a kind of union, which supply the best service to our users. So just give an example right our partnership with Uber, not only that to their second investment in the right, but also set up blueprint for how we enter new international markets gather. We prove that autonomous tech, technology. We we provide actually autonomous driving, technology and they bring operational know how.

Across the whole Mid East, we collaborate we also collaborate with Steer AI in Saudi Arabia and TextAI in UAE. In Europe, we have launched a robust service with Renault and Kecop robot texting with SVB and STL. And in Southeast Asia, our strategic alliance is Grab and also SMRT. And others helping us lay help helping us in the relative regions we are very actively seeking for the collaborators. So, with all that said we believe you know for strategy we believe like first mover advantage is critical.

And by partnering with strong local operators, global operators, we are not only shorten our time to market, but also build a very robust scalable ecosystem that combines cutting edge technology with proven operation excellence. So that’s how we push for the large scale. That’s our strategy.

Conference Moderator: And one moment for our next question. Our next question comes from Xinyu Feng of UBS. Your line is open. Our next question comes from Xinyu Feng of UBS.

LifeMuseo, Analyst, CICC: Hi. Can you hear me, please? Hi. Can you hear me? Yes, we can.

Yes,

Tony Han, Founder, Chairman and CEO, WeRide: we can.

LifeMuseo, Analyst, CICC: Okay, great. Thank you for taking my question. I have two questions. My first one is that recently we’ve seen OEMs like Tesla entering the space of robotaxi operation. Could you kindly share your thoughts on the future competitive landscape of robotaxi, both domestic and overseas?

Thank you.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. So I’ll take this question. So it’s about like a competitive landscape. So first of all, want to mention like the robotaxi, because it is a such such a important area and with huge market potential. This in this field over the past ten years, there have never been one day that without loss of competitors.

You know, since we found this company in the year 2017, there are many very well known giants and also very well known startups like enter this field. The robotaxi competition actually have have been go ongoing for more than eight years, but over the eight years, we ride has grown into a top autonomous driving and robotaxi company in this world, and we have expand our operations in in more than 10 cities and many, many countries. We hold six testing permits from six countries. So I think, you know, we really are very confident about like our competition capability. And so we want to, but just I want to emphasize what really is that we write apart is actually our we rise approval ability to deliver safe, reliable and scalable public transportations.

And we have been offering public global tech service since the year of 02/2019. And we are still proud to say over past two thousand twelve two hundred days operation, there’s a zero regulatory display caused by all autonomous driving systems failure. This is a very, very good safety track record. And in future, to, you know, what is our competitive edge? I think we have many capabilities.

Just to name a few, why is our HPC three point o I just mentioned, you know, computational platform is is is is the more advanced on VRISE computational platform is the more advanced. It’s the most around the world. And our products and algorithm are highly adaptable. And some numbers in some cities we can go from zero to deployment in just two weeks. This agility has helped us to secure permits for our products in six countries.

And also we have already successfully build a win win collaboration model with local partners. So with all that said, I think, know, the other things like we have a very strong mission that is we want to prove provide safe, reliable, and greater rider experience to our drivers with our cutting edge, autonomous driving technology. So, with all of this, I think we are very confident in the, in the computation to for the computation today and for the computation of tomorrow.

LifeMuseo, Analyst, CICC: Okay. Thank you for your answer. That’s very clear. Can you also my second question is can you also elaborate on how we leverage new AI models such as the world model or VRM or VLE? How would you think about the future technology trend for robotaxi and other autonomous vehicles?

Thank you.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. Very good question. I think, know, so for BLM, you know, now everybody is talking about BLM and in the era of age in the era of developing AGI and the great program in AGI. Of course, everybody talking about this video language model. And one thing I want to mention is like, there are some good technology, but, you know, in order to really adopt this good technology, you have to have very good pool of talents to develop this technology.

That these days, you you we we all witness, like, this kind of competition against the talents in Silicon Valley. Right? So luckily, we write has a pool of great talents working on deep learning, large language model, and the BLM. We have we have lots of very, very, very, very excellent talented engineers. And, you know, one thing I want to point out is like, we actually working on the the VOM.

At the same time, we actually build a proprietary end to end architecture that can function independently on ADA system. And our our our l four fleet, actually, we can make this ADA system integrated into our l four system. And to my best knowledge, this is very unique. So we have this kind of visual language model based end to end at a system, and it’s already integrated into our l four system. And so we actually are also working on how to really utilize this VLM with lots of data.

But of course, the data labeling is kind of very, very tedious and also sometimes very expensive. So to work with what visual large language model, visual language model, and all kinds of deep learning algorithm, we actually developed a very, very important platform Genesis. Okay. This genesis stands for generative engineered neural environment for simulated intelligence in self driving. It’s actually our core part of task training and validate our system.

And with this new deep learning algorithm, we can we we can actually have a mechanism a or a environment to generate a word. We write Genesis can actually reconstruct for urban environments in minutes, and also complete with camera and radar views, help us to simulate all kind of scenario. And also it’s couple of three d reconstruction of everything with all the geolocation information and very realistic. And with the generative AI function, we can support actually different scenarios like snowing weather, raining weather, all of this kind of scenario we can generate and put all of this generated data to train our real large language model. I believe this is one of our of our muscle, one of our competitive edge.

So with all of this this new developed technique and algorithm, we hope to develop the best autonomous driving technology for our users.

LifeMuseo, Analyst, CICC: Thank you.

Conference Moderator: One moment for our next question. Our next question will be coming from Olivia Niu of BOCI. Your line is open.

Olivia Niu, Analyst, BOCI: Hi, Tony. Hi, Jennifer. Thanks for taking my questions. And here I have two questions. The first one is regarding the global market expansion.

Because we see that WayRide is accelerating the global market expansion to deploy robotaxi business in recent quarters, especially in Middle East. So just wondering, you see any challenges of deploying robotaxi service in such destination markets, maybe from the perspective of market adaptation and compliance related issues? That’s my first question.

Jennifer Lee, CFO and Head of International, WeRide: Yeah, I’ll take your question. For the challenge side of deploying overseas, let’s start with adaptation. Taking our tech globally means we have to tailor everything to the local condition, which are always often very different from what we have seen in China. I’ll give you a few examples, like say in some regions, it’s a climate changes. We, it’s a climate of different, some extreme temperature like heavy snow.

And like say in The Middle East, we deal with extreme like desert heat and Euro counter like the very large construction site on the road. And sometimes the road direction changes like on a monthly basis for those construction site. Yeah, to prepare, we’ve leaned heavily on the robust model we have developed over the years, as well as all the diverse data we collect locally. Tony just explained our model progress. Genesis, it’s extremely helpful.

It’s not only a word model, but it’s a closed loop simulation system. And all of that has given us a very solid base to fine tune our algorithm before we’re scaling the operation locally. And then if we move on to the compliance side, every market has its own stance on autonomous driving vehicles. And many countries, they’re still figuring it out. Some like say The Middle East, are pushing aggressively to bring in autonomous driverless solutions.

And there are other countries they’re taking a more step by step approach. But for both scenarios, early movers, they have a real advantage. By getting early, we can help to shape the regulatory framework itself. Just like Tony just mentioned, he sits on the regulatory board in Singapore. And that in turn will help smooth our path into those new regions.

Licensing together with the regulatory side, licensing is another major piece of the puzzle. And every market followed a phased regulatory path. That’s pretty common. And you have to get from the testing permit and then do it for a while and then move it into commercial license the regulator is happy with the performance. And then you do it with safety driver onboard and gradually you move it to full driverless.

It’s a rigorous progress. And we’re very proud to say we are now if you look at the results, we’re the only tech company with products brand autonomous driving license in six different countries. We run all of our autonomous driving products in 10 countries in more than 30 cities. That’s a very strong testament of the maturity and the readiness of our technology and our getting permit know how. Last but not least, we’d like to mention on the data privacy and localization.

We do take those very seriously. And we don’t engage in cross border data transfer and all the data we collect, they stay within the country where it’s generated. And usually we definitely strictly like follow the local data like governance, privacy and cybersecurity other requirements. So yeah, so with all this years experience on oversea deployments, and we have built a very deep understanding of what it really takes to succeed in different markets. This kind of like hands on know how were earned through the actual deployment.

And it’s not just like signing some MOU and some very beginning pilot program. We believe this is our one of our core mode, and this will set up shop or scale up efficiently and confidently around the world. Yeah.

Olivia Niu, Analyst, BOCI: Thanks, Jennifer is quite clear. And my second question is about the technology competency. If we look at all autonomous driving software developers of maybe traditional Air four players that focus on developing fully automated vehicles like Waymo, and also the others originally focused on developing L2 or L2 plus ADAS system, but now play catch up in F4 competition, such as Tesla. So just wondering if from the technological perspective, how do we think about the competitive edge of way rights and how how to sustain the tech leadership in future? Thanks.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. So thank you. I’ll take this question. I think, you know, you know, people have been debating about, like, whether WeMOS approach will will will realize autonomous driving or is there a possibility, like, Tesla’s approach will reach autonomous driving. So people can debate this for for for for for a long time.

Okay? But I want to point out actually, so you have to actually finally, you have to show all the all the people, like, with real operation. So here, I just want to say, no matter what what kind of approach you mentioned, finally, have to supply very reliable, very, very affordable, and automobile taxi service with very good user experience. So having that said, I just want to emphasize, like, there’s only one company in the world, like, currently is doing both robotaxis service using L4 level of automobile driving technology at the same time, supplying other system for massive massive production car. That is we write.

We write actually, can do all range of autonomous driving system or algorithm starting from l two plus plus to l four system. Our l four vehicles actually already operate with with some very good performance in Beijing and Guangzhou. And I think they are comparable to Waymo’s operation in in San Francisco or in in LA or potentially in New York. On AdaSet, we have built state of the art one stage end to end model and also we are integrating BLM as I mentioned before. And so our ADA system has been adopted by many mass product production client have very good ADA’s experience.

And so by the one thing by advancing our alpha autonomous driving system and the ADAS technology in parallel, we are building a tech foundation with the potential to break past traditional our autonomous driving system systems performance seating and achieve a much higher level of generalization. That’s exactly why we are able to support a wide range of urban mobility applications and has been successfully deployed, has successfully deployed in 10 diverse countries in all different conditions. So that’s actually just want to to share with all the people like, you know, no matter which approach people think have high likelihood, actually, we write is the only company doing very, very significant progress and actually generate significant results in both end. So hopefully in future, we will have a great system, the merits of the both approach with a very efficient model and we can bring the best quality of service of robotax service to the world.

Olivia Niu, Analyst, BOCI: Thanks, Tony. Quite helpful. I have no further questions, and I’m looking forward to hear more good news next quarter. Thanks. Thank you, Olivia.

Tony Han, Founder, Chairman and CEO, WeRide: Thank you. Thank you, everybody. Thank you.

Conference Moderator: Do we have more questions coming? And we have one more question for Tianyu Liu of CITIC Securities. Your line is open.

Tianyu Liu, Analyst, CITIC Securities: Okay. Good morning. I’m Wu Tianyu from CITIC Securities. And thank you very much and congratulations on the results. We believe that the level for autonomous driving is an international topic, not only in China.

And my question is that as some companies are also in The Middle East, what’s your take and how does ERAD stand out? Thank you.

Jennifer Lee, CFO and Head of International, WeRide: I’ll take your question, Tianyu. So, yeah, like we just mentioned, Middle East is a dynamic market with huge potential and which is exactly why we chose it as the launchpad for our global expansion back in 2021. So, even then, back then, we weren’t the first one to announce plan there. But today, we will operate the largest commercial robotaxis fleets in the entire region. And we’re just getting started.

To let’s just look back to the past few years, like in 2023, we became the first and only autonomous driving company to have to receive a national autonomous driving permit in The UAE granted to us by The UAE Prime Minister. And that milestone opens the door for our flagship partnership with Uber, which actually kicked off last December. And, and yeah, so now we have a strong partnerships like in the region with Uber, with TX AI, with TGA, with AI driver. And to the best of my knowledge today, we are the only robotaxi player based operation in Abu Dhabi. And we’re the one of the two that who has started testing in Abu Dhabi in Dubai.

And obviously, we’re the only one in India Saudi Arabia as well. And if we’re coming back to like say Abu Dhabi, our robotaxis fleet already covers half of the urban city. So, that is unprecedented for the region. So yeah, so what makes all of that possible is like we have a very standardized deployment playbook and the proven localized capabilities. It’s not easy for everyone to for it’s not like anyone can just go into the comfort region and started to deploy.

There are a lot of the localized issue that they have to solve. But we have already gotten the we can get the fleet up and running in weeks. And also, have the local team to support. Yeah, even in region’s extreme like environment, like say two weeks ago, I was down there to in Ria for the robotaxi like deployment ceremony. So whether it’s already forty, forty six forty seven degrees.

And you can imagine when we first hit it like open the car as the temperature within the vehicle is even higher. So, all of other issues that every other participants in the region have to overcome, and it takes a strong team to overcome those challenges. With all the expertise that will build there, we think we are, we will remain to be the leading one in The Middle East, and we’ll take it global to scale faster, smarter, and this very strong local impact. I hope that answers your question.

Conference Moderator: Ladies and gentlemen, this does conclude today’s conference. Thank you for your participation, and you may now disconnect.

Tony Han, Founder, Chairman and CEO, WeRide: Thank you. We’ll see you next quarter. Thank you.

LifeMuseo, Analyst, CICC: Thank you.

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