Earnings call transcript: WeRide’s Q4 2024 revenue dips, innovation leads

WeRide’s Q4 2024 earnings call revealed a mixed performance with a slight decline in revenue, yet significant strides in product innovation and expansion. The company, currently valued at $4.47 billion, reported a 3% year-over-year decrease in total revenue for the quarter, amounting to $141 million. According to InvestingPro analysis, WeRide’s current market valuation appears elevated compared to its Fair Value. Despite this, WeRide continued to push boundaries in autonomous driving technology, launching new products and expanding its fleet and market presence.

Key Takeaways

• Q4 2024 revenue decreased by 3% year-over-year to $141 million.
• Product revenue grew 46% to $52 million, driven by new launches.
• WeRide expanded its autonomous vehicle operations to over 20 cities in China and internationally.
• The company aims for positive unit economics for its RoboTaxi fleet in first-tier cities by 2025.

Company Performance

WeRide’s overall performance in Q4 2024 was characterized by a decline in total revenue but robust growth in product sales. InvestingPro data reveals a concerning 19.05% revenue decline over the last twelve months, though the company maintains a healthy gross profit margin of 37.25%. The company’s strategic focus on innovation and expansion into international markets is evident as it launched new models such as the RoboTaxi GSR and expanded its autonomous vehicle fleet to over 1,000 vehicles. This expansion aligns with WeRide’s strategy to capitalize on markets with aging populations and labor shortages, which offer higher gross margins. For deeper insights into WeRide’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Total Q4 revenue: $141 million (3% decrease YoY)
• Full year 2024 revenue: $361 million
• Product revenue: $52 million (46% increase YoY)
• Service revenue: $89 million (decrease from previous year)
• Net loss: $592 million (66% increase YoY)
• Cash position: RMB 4.9 billion as of 12/31/2024

Outlook & Guidance

Looking forward, WeRide plans to deploy hundreds of vehicles in multiple cities by 2025 and aims to have 50 RoboTaxis on the Uber platform by mid-2025. The company is optimistic about achieving positive unit economics for its RoboTaxi operations in major cities, driven by its asset-light business model and strategic partnerships.

Executive Commentary

CEO Tony Han emphasized the transformative potential of global taxi services, stating, "We believe that global taxi represents a fundamental shift of core capability compared to traditional ride-hailing." CFO Jennifer Lee reiterated the company’s commitment to an asset-light model, aiming to scale the RoboTaxi fleet efficiently.

Risks and Challenges

• Increasing net losses pose a financial challenge that the company must address.
• Regulatory hurdles in international markets could impact expansion plans.
• The autonomous driving market’s high entry barriers require continuous innovation and investment.
• Potential job displacement concerns could affect public perception and regulatory support.

WeRide’s Q4 2024 earnings reflect a period of transition, with the company leveraging its technological advancements and strategic partnerships to position itself as a leader in the autonomous driving industry. Despite financial challenges, WeRide’s focus on innovation and expansion into lucrative markets provides a promising outlook for future growth. Analyst price targets ranging from $19.16 to $23.02 suggest potential upside from the current $16.27 share price. Investors seeking comprehensive analysis can access detailed financial metrics, valuation models, and expert insights through InvestingPro’s extensive research platform.

Full transcript - Wildhorse Resource Development Corp (WRD) Q4 2024:

Conference Operator: Good morning and good evening ladies and gentlemen. Thank you for standing by and welcome to WeRite’s Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. We 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 News Wire earlier today and are currently available online. Joining us today are WeRite’s Founder, Chairman and CEO, Doctor. Tony Han and CFO, Ms. Jennifer Lee. In addition, Co Founder and CTO, Doctor.

Yan Li will also be available during the question and answer session. 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 today’s call will include forward looking statements, including our 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 our U. S.

Prospectus filed with the SEC for a full disclosure of these risk factors. Please note that all numbers stated in 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, sir.

Tony Han, Founder, Chairman and CEO, WeRide: Hello, everyone, and thank you for joining us for our first earnings call as a Nasdaq listed public company. 2024 was an important year for V Wright, marked by significant advance of our core robotics business, international expansion and product development. As we continue to build on our positions as an industry leader, we remain committed to our mission of transforming urban living through safe, reliable and accessible autonomous driving solutions. The progress we have made during the fourth quarter has been particularly encouraging. It positions us well for 2025 and beyond.

It also reflects our strategic focus on establishing foundations for long term sustainable growth. We believe this will allow us to best deliver on our mission and create lasting value for our stakeholders. Let’s begin with our core business, Lomo Taxi. We have made exciting achievements together with our partners. In October, we launched our new purpose built RoboTaxi, the GSR, which represents a significant leap forward in AV technology.

Just four months after the launch, GSR has begun her full driverless commercial operation in Beijing, becoming our second AV authorized to provide on demand and paid robot taxi in the capital of China. This rapid development demonstrates both our technology superiority and the increasing regulatory acceptance of AVs. The debut of GSR also coincided with the third anniversary of our robotaxi operation in UAE. In the fourth quarter, we started a new chapter in this region by collaborating with Uber to launch a ride hailing partnership in Abu Dhabi. This represents the first time that AVs are available on Uber outside The U.

S. We are excited to announce that by mid-twenty twenty five, the number of robot taxis on Uber platform will reach 50. With the support of Aptavi Integrated Transport Center, our service is available in major areas including Sab Yat Island, Yas Island and Rok Tu of the Yid International Airport. This marks a key milestone of our commercialization in this region. We believe that the global taxi industry has entered an exciting development phase, powered by increasing public acceptance and a more favorable regulatory environment.

As a first mover, we are well positioned to capitalize this shift and fully committed to improving the accessibility of our global tax service globally. In January, we launched our first strategic robotaxi pilot project in Switzerland. In March, we officially obtained a permit to conduct commercial robotaxi ride hailing service in core urban area in Beijing. Our WeWise1 foundation model enables us to operate successfully in diverse environments. Our RoboTaxi can maneuver smoothly in crowded Tier one cities such as Guangzhou and Beijing and maintain very stable performance in extreme weather conditions such as very heavy rain and extreme heat.

Most importantly, we prioritize safety in our operations. Our Robo Tech fleet has completed more than nineteen hundred days of commercial operation on public roads with zero regulatory discipline caused by autonomous driving systems failure. Next, I’m going to share with you our market strategy, which focuses on internationalization. We have been spearheading commercialization in a global market since 2021. Back then, we launched our Robo Taxi Ride hailing service in Abu Dhabi, which was the first of its kind in the region.

Our outstanding performance leads to UAE’s First and only national permit, which was granted to WeRide in 2023. We were greatly encouraged by this success, which validate both our technology and service. In new markets, we are committed to fostering constructive dialogue with regulators to realize our mutual visions for safe autonomous driving. We have also built a robust ecosystem by forging strategic partnership with a wide range of key stakeholders. Besides joining forces with Uber in the Mid East, we collaborate with Zurich Airport in Switzerland to provide robust shuttle service and partnered with Renault, Gauthi and MASSIVE in France to offer trial robust service.

We also provide driverless solutions to the largest sanitation operator in Singapore, Techium Maintenance. These initiatives are evidence of our serious commitment to the global expansion. As of today, we have declared L4 vehicles across more than 30 cities in 10 countries. Domestically, despite current economic headwind, we have expanded our footprint to over 20 cities in China with our RoboTaxi, RoboBus, Robo Sweeper, RoboWAN and related services. We are actively building a strong business development team and implementing dynamic pricing strategies to drive growth in our home market.

We remain optimistic about her long term potential. Our strategy of engaging in multiple markets provide us with resilience and the various opportunities for growth, thereby mitigating the risks associated with dependence on any single market. Through focusing on international expansion, we are confident in our ability to expand customer base and turbocharge our long term growth. Now let’s discuss technology and products that underscore our success. Our global strategy is governed by the focus on technology innovation, which ensures that we remain competitive in every single market we enter.

We began deploying end to end models for both ADAS and L4 driverless systems in the second half of twenty twenty four. The end to end model employs a large VLM, IE Visual Language model, which is pre trained with all the data available from Internet as a backbone to encode the world’s knowledge. It is then trained with nearly one million hours of carefully selected driving data from both human drivers and the simulated driving scenarios based on our world model. The training data continuously grow with high quality driving data as well as more long tail cases covered by real world data and simulated data. Such an approach ensures the trained model has a general understanding of the world as well as deep insight in driving.

Eventually, our autonomous driving systems can perform like a seasoned taxi driver in various complex urban scenarios. For our L4 driverless products such as Jovotax and Global Bus, the end to end model is accompanied with safety critical frameworks to bring human life driving experience while maintaining the same high level of safety required by driverless systems. They are available in our latest version of Global Taxi GIR, which is currently running in multiple countries. We have also achieved several key breakthroughs in product development in twenty twenty four. First and foremost, as mentioned at the beginning, we unveiled our newly our new purpose built robotaxi, the GSR, which is carefully tailored for scalable and driverless operation with an improved redundant system.

It features an industry leading L4 drive by rear chassis architecture, spacious seating design and WeRise proprietary Sensor Suite 5.6. With an auto grade computing power of 1,300 TOPS, GXR is able to handle the high level of complexity. We have also put into thorough consideration of user experience such as designated carry on luggage area, a gradual stop button and electrical power sliding door. GSR has started serving citizens in Beijing in this February and will soon be deployed in Guangzhou and Abu Dhabi. With this groundbreaking product, we are going to redefine autonomous driving experience by providing a safer and more comfortable mobility option.

In other L4 segments, we expanded our product family by releasing a new Robo sweeper, the S1 and a new Robo WAN on the W5. Both represent our customer centric product migration philosophy. S1 Robo Sweeper complements and is deployed alongside our larger S6 global sleeper. It can navigate smoothly in narrow space while effectively cleaning various road surfaces. W5 features the largest cargo capacity in its class, making it fit for various point to point logistics scenarios.

We have seen strong demand just one month after we introduced the W5 Global WAN. These innovations expand our addressable market, enhance our capabilities and offer to create additional revenue streams beyond our core robotaxi business. As we look forward to the remainder of 2025, our strategy will focus on setting a stage for future growth through multiple coordinated initiatives. We are preparing to take advantage of the recovery of the domestic market and expanding our presence internationally. In tandem, we will continue to diversify our revenue streams through product innovation and upgrades.

Finally, we are committed to scaling our RoboTexas fleet to a meaningful size that drives operational efficiencies and strengthens our industry leadership. These efforts will lead to sustainable long term growth. With that, I will now turn the call over to our CFO, Jennifer Li, to discuss our financial results. Jennifer, please go ahead.

Jennifer Lee, CFO, WeRide: Thank you, Tony. Hello, everyone. Before we get into the financials, please note that all amounts are in R and D and all comparisons are on year over year basis unless otherwise stated. Now let’s go through our fourth quarter and full year 2024 financial performance. In 2024, V RISE reached Red Corp.

Breaking global taxi revenue and achieved the highest international revenue since our funding. Total revenue for the fourth quarter decreased by three percent to $141,000,000 primarily due to a decline in our service revenue, which was partially offset by the growth in product revenue. For the full year of 2024, total revenue was $361,000,000 By revenue type, product revenue saw substantial growth, increasing by 46% to $52,000,000 for the fourth quarter. This growth was mainly driven by a significant rise in the sale of RoboTaxi, RoboSripper and RoboVAN during the quarter, although partially offset by a decrease in revenue from the sale of Robo buses. Service revenue, on the other hand, decreased to RMB89 million mainly because customized R and D service for certain clients were completed during the previous quarter, this renewed contract expected to take effect in 2025.

For the full year of 2024, product revenue increased by 62 percent to $88,000,000 while service revenue decreased by 21% to $273,000,000 dollars In terms of gross margins, product gross margin was 17% and service gross margin were 48% for Q4. For the full year, gross margin for products and services were 1835%, respectively. Now turning into our operating expenses. In the fourth quarter, operating expense rose by 82% to $640,000,000 For the full year of 2024, the operating expense increased by 32% to $2,300,000,000 The change was mainly due to a higher personnel related expense for both Q4 and the full year, as well as an increase in share based compensation, which we will refer to as SBC from here on. We believe that this increased operating costs were moderate relative to the market and it will position Beelite for growth at scale, enabled us to build strong distribution network and become frontrunner in deploying our products in more international markets with better profit margin and significant growth potential.

Breaking this further down, R and D expense increased by 32% to $320,000,000 in Q4 and increased by 3% to $1,100,000,000 for the full year of 2024. Excluding SBC, R and D expense increased by 57% to $284,000,000 in Q4 and increased by 39% to $857,000,000 for the full year of 2024. R and D expense grew as we continue to invest in attracting industry leading talents to constantly improving our technical capabilities and products as well as launching new innovative autonomous lighting product and services. Administrative expense increased by 205% to $3.00 $5,000,000 in Q4 and increased by 82% to $1,100,000,000 for the full year of 2024. Excluding SBC, administrative expense increased by 63% to 66,000,000 in Q4 and increased by 26% to $2.00 $1,000,000 for the full year of 2024.

The increase was primarily due to our continuous effort to execute our growth strategy, strengthening our organizational infrastructure and recruit key employee across relevant functions. We also face higher professional service fee compared to previous quarters as we transitioned to being a public listed company. Selling expense increased by 52% to $15,000,000 in Q4 and increased by 29% to $15.40 to $54,000,000 for the full year of 2024. Excluding SDC, selling expense were up 7174% for the quarter and for the full year, respectively. This increase reflects our continuous expansion of the sales and support initiatives to promote the vantage of our autonomous driving product and services, as well as efforts to build brand awareness.

With this increased spending, we successfully launched more commercial projects across multiple cities in China and rapidly expand our presence in key markets in Europe, The Middle East and Asia. Our net loss increased by 66% to $592,000,000 in Q4 and increased by 29% to $2,500,000,000 for the full year of 2024. On a non IFRS basis, which excludes certain factors as outlined in our earning release and corresponding U. S. SEC filings, the net loss increased by 112 to RMB246 million for Q4 and increased by 60% to RMB802 million for the full year of 2024.

As of 12/31/2024, we held RMB4.9 billion in cash, cash equivalents and time deposits, along with $14,000,000 in restricted cash and $1,700,000,000 in financial assets measured at fair value through profit and loss. We expect our solid cash position will allow us to sustain ongoing R and D efforts and expand deployment of our autonomous driving vehicles across more cities. We believe this investment will yield significant commercial returns in the coming years. In closing, 2024 was a strong year for our company. Be Right has launched autonomous driving testing and operation in 10 countries, achieved record breaking robotaxi revenue and the highest international revenue.

Our strategic investment in research and development and other key areas have led to innovative autonomous driving products and expanded global deployments. Looking ahead, we have a robust pipeline of opportunities to work on in twenty twenty five, five, which we believe will drive the development of advanced technology, shaping not only the future of our company, but also the future of the autonomous driving industry. With that, operator, we are now ready to take on questions.

Conference Operator: Thank you. We will now begin the question and answer session. Our first question comes from the line of Tim Shiel of Morgan Stanley. Your line is open. Please go ahead Tim.

Tim Shiel, Analyst, Morgan Stanley: Hi. This is Tian from MSR. Thanks for taking my questions and congratulations on Nagpo project breakthroughs globally. So I have two questions. So the first question is about We Rise and its business model because we noticed the industry has been evolving rapidly.

So we definitely want to know that was We Rise current robotaxi business model. And could management team also share the latest progress, I think that Tony has mentioned, it’s a very exciting breakthrough, but what could be the next? So that’s my first question. Thank you.

Jennifer Lee, CFO, WeRide: Thank you, Tim. I’ll take the first question. Our robotax business model is quite unique from others. For international markets outside China, we provide autonomous vehicles and services to local partners and global platform through a combination of selling the vehicles, charging a fixed service fee and a revenue sharing arrangement. This ensures we have a positive contribution margin from day one.

Our strategy focuses on collaborating with leading platform in each market so that we can achieve faster robotaxi deployments, better utilization of robotaxi fleet and stronger pricing power. Our goal is to establish a presence in core cities moving from zero to one to capture the total dreadful markets for autonomous vehicles. We are expanding globally with certain overseas markets offer very attractive unit economic and talent, while China provides very rich scenarios to prove and refine our technology and products. For example, in The Middle East, we partnered with Uber to launch commercial robotaxi services starting from December 2024 in Abu Dhabi. To the best of our knowledge, this is the largest commercial robotaxi service outside The U.

S. And China. We will continue to increase the fleet to 50 robotaxis by mid-twenty twenty five and improve operation by increasing pickup and drop off points and operation areas. Another example is that we began working on pilot testing our robotaxi in Switzerland with the largest local operator and we expect to start open to public trial this year. Also in China, we run our own platform, WeRigo, to offer robotaxi services to users directly.

We expect unit economics for robotaxi in first year cities in China to turn positive in the coming years. We plan to evolve third party asset owners to purchase the fleet and operate them on our platform by then. In short, our goal is to maintain an asset light business model and to scale the RoboTaxi fleet as much as possible. Thank you.

Tim Shiel, Analyst, Morgan Stanley: Thanks for the detailed information and sharing. Just a quick follow-up on RoboTaxi, because we think that RoboTaxi, as Tony mentioned, remains the We Rise core business and stay very topical these days. Could you elaborate a bit more about We Rise’ current market position in Robotechi industry, probably both domestically and globally? That’s my second question. Thank you.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. I will take this question. So first of all, I think WeWriMoi is definitely in the leading position in Robotechi segment. So I will explain in details. First of all, I think WeWright maintained her global leadership in both technology and commercialization.

And if you really look into the numbers, so far we write declared one of the largest fleet globally with the best safety records. As I mentioned in the opening remarks, we are the only company to our best knowledge that hold a track record of zero regulatory displaying caused by AD15 failure. So that is amazing number. And also we are the only company that holds autonomous driving permits from four countries. We test and operate in various complex environments with dense population and that one is actually a best testament of our technological leadership.

And with our various products including RoboTaxi and RoboVAN, you can find like our RoboTaxi operation is highly scalable because we really build a very rigorous operating setup including remote assistance center, fleet management system and a sale operation design. We also over the years we have established streamlined SOP that enables successful developments in any new city within one month. We have launched a purposely built and cost effective car model GXR that ensures safe and reliable driving performance at a large scale. And last and also most important, since the foundation of Wheelwright eight years ago, we always treat technology as the base of the whole company. We don’t devote tremendous of efforts, lots of research efforts, lots of findings for R and D and we really put huge efforts to recruit tailings, all of this finally resulting very, very advanced global taxi technology and which reflects our performance.

And if you look at our current safety standards that reflects our technology advance. So with all of these results, I do believe BBYDE is definitely a leading position.

Tim Shiel, Analyst, Morgan Stanley: Thank you, Tony, for the great callers and congratulations again for the remarkable breakthrough in the global market. Thank you.

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

Conference Operator: Thank you. Our next question comes from the line of Jiajie Shen of JPMorgan. Your line is now open. Please go ahead, Jiajie.

Jiajie Shen/Ting Song, Analyst, JPMorgan/Goldman Sachs: Yes. Thank you for taking my questions. This is Jia Jie from JPMorgan. First of all, congrats on your recent encouraging business development and expansion in global markets. I have two questions.

The first one is while a scaling global taxi operation in both domestic and overseas markets, what major challenges do you foresee? And the second question is how do you view the future competitive landscape from here? Thank you.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. Let me answer these two questions. I think first question is really about like challenges in scaling global tech operation. That is a great question. And I think that is the challenges facing all the automobile driving company who has a business in RoboTaxi.

And to be right, we believe this challenges also introduce lots of opportunities. Why? Because if you can conquer these challenges and handle these challenges very well and the way you handle it become the mode of your business. Most specifically, city level opening up is necessary for commercial operation at scale. And WeWIDE has been known to be very good at taking this step by step.

Most authority authorities like municipal governments or state governments will prefer responsible approach when they adopt AV. And Wheelwright has a way to gradually introduce autonomous driving product like we can always introduce a robust sweeper at first and also fixed route mini bus, which the challenges for safety for this product are relatively low compared to the requirements for RoboTaxi. But with this progressive approach, we can gradually build up the mutual trust and actually show the local government like our technology is safe and then we can gradually introduce RoboTaxi at a scale. And new operational challenges will emerge at each of the scale like when you deploy a 1,000, 10 thousand and one hundred thousand levels of fleet size. And so the backbone is really about robustness and of your technology and how safe can you maintain your robotaxi fleet during the operation.

With our track record, I think we have already shown we can handle this challenge pretty well. Okay, that is my answer to your first question about challenging for scaling global taxi operation. The second question is really about future competitive landscape. And as I mentioned during my answer to the first question, you know like global taxi has a very high entry barrier. So for a huge market, but there is for such a huge market and there is to our best knowledge, there is only a handful of top players, maybe four or five.

We realize it’s one of the pioneers. And it’s very, very unlikely to foresee any new commerce with a significant impact. Some peers actually are doing a remarkable jobs, which propel the health development of the whole industry. For example, Waymo in San Francisco is very exciting and we also committed to make our own contribution. We believe that global taxi represents a fundamental shift of core capability compares to traditional ride hailing, which heavily relies on human element.

So I believe like for the winning robotaxi company, they have to adopt lots of cutting edge AI technology and luckily, WeWright has or adopt VLA model, end to end model and also world model. All of this large language model based technique facilitate our robotaxi operation and guarantee our safety. We are well positioned to expand our leadership. What differentiate us is our technology and the business live view enabled by our comprehensive skill set. And I think we will continue to improve our technology and with our fast very fast paced technology advancement, I think we will maintain our leading position.

So in future, I do believe WeWright will keep our leading position in robotics business.

Tim Shiel, Analyst, Morgan Stanley: All

Conference Operator: right. Thank you. Okay. Thank you. Thank you.

Our next question comes from the line of Liping Zhao of CICC. Your line is now open. Please go ahead, Liping. Okay. Good evening, Tony and Jennifer.

I also got two questions here and thanks for taking my questions. The first question is for the robotaxi business. What’s your current cost and path to profitability? And how big a fleet can achieve the breakeven? And second question is about the overseas expansion.

So in general, why do you expand your business in so many countries instead of focusing on the domestic market? Thank you.

Jennifer Lee, CFO, WeRide: Thank you, Leipin. I’ll take the first question. We believe in operating as part of a hybrid fleet as as that will afford us to better ramp up the schedule and utilization of the Robotaxi fleet. That said, our business model is not to be the operator outside China. So our margin is positive on day one.

As of the BOM cost, our current BOM is highly competitive. We understand certain peers unit cost goes over like USD 150,000, while ours is substantially much, much lower and is still reducing. This is mainly benefiting from the mature and advanced EV supply chain in China. As of breakeven, it varies by market and by the business model, but in our target market, autonomous vehicle operating alongside human drivers in hybrid mode, it can achieve quickly quick profitability due to guaranteed utilization. Like for instance, in high cost markets, like say, some of the European countries and some Middle East countries, we expect operating profit margin of approximately 60% by 02/1930.

So in terms of breakeven, as long as the utilization of global tax is high, which even is achievable even with a small global tax fleet in a new city. However, if like say a global taxi player operates on its own platform in a small zone, for example, in one fourth or one sixth of a city area, it’s relatively difficult to have a high utilization rate unless they have a huge safe comp and the red hailing price is very low. Either way, it’s pretty hard to operate in a smaller zone on its own platform and achieve breakeven. This is why we will prefer the hybrid mode for also China. Yes.

Thank you. Tony, you want to take the second question?

Tony Han, Founder, Chairman and CEO, WeRide: Okay. I’ll take the second question. So if I remember correctly, the second question is really about why not just focusing on the domestic market. Well, first of all, I think it’s very natural if you can do well in both global market and domestic market, why not do well in both. Actually, look at our track record and our numbers, I think we can say we do well in both markets.

So there are several reasons why we can do well in both markets with a relatively new team. But the fact is we do believe we can do well in both markets. And so wondering if like we have a kind of very general, very universal foundation model and we build our autonomous driving technology from just the same set of code library and then branch out for different products. That’s one unique advantage of rewrite. And besides, we observe a strong demand from countries that are facing challenges of aging population and rising labor costs such as Singapore, Japan, European countries.

So they usually traditionally are very good market. We can definitely generate enough profit margin. And so with this kind of good market and there are not very strong automobile company can deploy there. So that is definitely a natural market for V Ray. And we also believe this is definitely a favorable window to engage local stakeholders such as first mover and shape local regulatory framework of our autonomous driving vehicle.

And besides, a multi market approach helps us diversify our revenue streams, as I mentioned in the opening remarks, and that can improve our resilience against single market fluctuation. If you look at numbers, international markets represent 10% to 30% higher gross margin than the domestic market, leveraging the robustness of our products. So with all of these reasons, I think we can definitely do well both in domestic market and in global market and Real Ride has unparalleled unique advantages to do both markets very well.

Conference Operator: Got it. Thanks, Tanya and Jennifer. That’s very helpful. Thank you. Thank you.

Our next question comes from the line of Ting Song of Goldman Sachs. Your line is now open. Please go ahead, Ting.

Jiajie Shen/Ting Song, Analyst, JPMorgan/Goldman Sachs: Thanks for taking my question. Congratulations on all the progress. So I have two questions. The first one is, you have launched Robotech CGXR and RoboWAN W5. So what will be your next milestone regarding technology and product development?

And the second question is, you just mentioned that you have started to deploy end to end models and VOM in your L4 system. So could you elaborate more on this, on how you could further develop your technology?

Conference Operator: Thank you.

Yan Li, Co-Founder and CTO, WeRide: So since these two questions are technology related, so I will cover these questions. Thank you for the question, team. So I think that there are many exciting developments over last year. So I just want to highlight a couple of them. So in 2025, we plan to deploy hundreds of vehicles across multiple cities worldwide.

So our next generation AV system, we will incorporate advanced high dynamic range cameras, solid state lidars as well as auto grade computer units. So I think these upgrades will significantly reduce the total BOM cost, while enhancing our overall system reliability and ensuring a robust and cost effective solution for autonomous mobility. So next, regarding the compute unit, we have established a strategic partnership with Lenovo to implement an NVIDIA DRIVE SOL platform and code that developer a next generation domain controller. This auto grade domain controller will feature NVIDIA’s latest BlackValk architecture system on chip. It was engineered for L4 autonomous driving and we anticipate deploying this cutting edge technology in our commercial robotaxi fleet by second half of this year.

I also want to talk a little bit about our data and models. By leveraging the extensive data collected from both ADAS and L4 vehicles, we are accumulating millions of long tail traffic scenarios. Those datasets will be integrated into our vision language models to encode a complex urban driving environment. As a result, our autonomous driving system will achieve unparalleled capability in navigating intricate urban scenarios, demonstrating the skill and the intuition of an experienced taxi driver. So we are committed to advancing autonomous driving technology, driving innovation and delivering scalable, reliable solutions for the future of mobility.

I think the second question is about how do we deploy the end to end models and how do we train and deploy the VOMs to our L4 system. So actually, we began developing end to end models approximately a year and a half ago, initially targeting our ADAS system. So the result was remarkable. With the end to end system demonstrating exceptional maneuverability and a level of naturalism that exceeded our expectations. We were truly encouraged by those outcomes.

So we started integrating the end to end model into our Air Force framework as an additional path planning method. By combining those approach with the conventional modular design of the Air Force deck, we achieved an optimal balance between safety and comfort in our hybrid system. Over time, we have observed a growing trend where the AI generated path were increasingly selected as a final decision by the AV system. That actually validates the effectiveness of this approach. So more recently, we were inspired by the recent development of large language models.

We have incorporated vision language models, also known as VRMs, As a foundational framework for our end to end system, the VRM is pre trained on a vast array of Internet data, enabling to encode a broad understanding of world knowledge. So this foundation is then fine tuned using nearly a million hours of meticulously curated autonomous driving data. This dual phase training ensures that the method not only protects the general comprehension of the world, but also deep specialized insights into driving dynamics. So as a result, our autonomous driving system are capable of navigating complex urban environments with the skill and the intuition of an experienced taxi driver. Thank you.

Jiajie Shen/Ting Song, Analyst, JPMorgan/Goldman Sachs: Thank you. That’s really helpful.

Conference Operator: Thank you. Our next question comes from the line of Xinyu Fang of UBS. Your line is now open. Please go ahead Xinyu.

Xinyu Fang, Analyst, UBS: Hi. Thank you for taking my question. This is Xinyu from UBS. I have two questions here. The first one is that we know that ADAS is a very important component of our service income.

Can you elaborate a little bit more about this ADAS service? How do we partner with our with BOS, our partner? And how do and technology wise, how do our ADAS initiative interact or transfer for our L4 technology? This is my second question. Thank you.

Yan Li, Co-Founder and CTO, WeRide: Thank you for the question, Jingyu. So we started to codeveloper AR2 plus ADAS solutions with the world largest Tier one supplier, Bosch, since 2022. We delivered our first solution for mass production cars within a record breaking eighteen months. Our solution have been deployed on the Cherry Exceed platform. So our ADAS system is actually designed to seamlessly integrate with our Airform system through a unified architecture.

It leverages the same data pipelines, toolchains, simulation platforms and off board infrastructure. So this one size fits all approach allows engineers to efficiently transition between L2, L3 and L4 development. So it enables rapid iteration and deployment across different target platforms. I also want to mention that this insight and expertise gained from our ADAS development have significantly influenced our L4 stack. For instance, the end to end model development for ADAS serves as an alternative for path planning in our L4 system.

Additionally, our HD Map three solution provides a robust mechanism to verify map accuracy and determine real time updates during operation. So the rigorous auto grade standard applied in ADAS have also been instrumental in shaping system requirements, defining performance metrics, advancing cutting edge simulation tools, refining our validation framework and mitigating risk associated with commercial deployment. So I think this seems chaotic relationship between our ADAS and Air Force systems not only accelerates the development, but also ensures a consistent level of reliability and safety across all levels of autonomy. I hope that answers your question. Thank you.

Xinyu Fang, Analyst, UBS: Thank you very much for the color. My second question is about our R and D expense. Can we have any color on the R and D expense going forward in 2025 or in more near term over the next few quarters? Thank you.

Jennifer Lee, CFO, WeRide: I’ll take the question. So our R and D expense increased 3.1% in 2024. It’s mainly due to increase in personnel related expense resulting from our expansion of the R and D team as well as the cost of upgrading our sensor fleet and hardware design. So we expect our R and D expense continue to grow at moderate rates, along with our progress in recruiting top talents to expand our R and D force and also picking up our compute resources. Throughout the years, we have been very cost cautious and maintain a much lower cash burn rate compared to our global and China peers.

So our total liquidity position is around US910 million dollars which is like US6.6 billion dollars as of like end of last year. So we believe that our current capital resource will be sufficient to meet our current and anticipated working capital requirements for the next couple of years, as well as for all the capital expenditure of R and D and investments expansion. And in the next few years, we expect to see our actually to see our business to take off. So as we make more commercial results, the liquidity position will be even stronger. Yes.

Thank you.

Xinyu Fang, Analyst, UBS: Thank you very much for the additional color. Thank you.

Conference Operator: Thank you. Our next question comes from the line of Jiaqi Huang of SP DBI. Your line is now open. Please go ahead, Jiaqi.

Jiajie Shen/Ting Song, Analyst, JPMorgan/Goldman Sachs: Hi, management. This is Xia from SVBBI. And I’ve got two questions. My first question is about our business partnership. Could you please share more about our collaboration with like NVIDIA, Uber and other key business partners?

Tony Han, Founder, Chairman and CEO, WeRide: Okay. So I will take this question. So first of all, I think if you look at major business partners of WeWright, they are Uber, NVIDIA, Bosch and GE for a reason. Many of them are just like top notch company and a very, very impactful company. So I think it’s all because of WeWright’s unique technology advance and our great business operation and our advantages in the market that all of these tech giants want to work with us.

So for NVIDIA, we have very good relationships since the early years like what we just found is called Silicon Valley and we have been in touch with Jensen and Jensen Huang as an entrepreneur always proved for the best technology. At that time, Rewrite was a startup and chose Jensen the best technology. Today, we still show the best autonomous driving technology. So NVIDIA become our very early investor and also we adopt NVIDIA’s SoC since video error and then we gradually adopt RNX, RNY and now together with Lenovo, we are developing the newest SoC for both L4 and L3 systems based on their newest assault platform. So I think our relationship with NVIDIA is very strong and we will continue to use their best SoCs available and to make to facilitate the development of our L4 system.

With Uber, there’s a this is a definite a win win partnership. As I mentioned in the opening remarks, like we are going to have at least 50 robotaxi up Darby by mid of twenty twenty five and the numbers will be only growing bigger and bigger and we will expect more collaborations. And this is definitely a win win partnership in Mid East and to our best knowledge, this is the first time Uber have autonomous driving company have their robotaxi hooked up in their platform out of U. S. And we are really excited about providing global tax service at large scale in other regions together with Uber.

And with the hybrid mode, we can conquer lots of potential challenges if you just home grow your own global taxi service. So Uber is definitely a strong partner and luckily and Uber also will only pick the top players and Uber pick rewrite as a close partner. We also have very close partnership with Bosch. Bosch as the number one tier one supplier in the auto industry, actually set up a lot of standards in ADAS system. And we are the largest part of Bosch in L2 plus ADAS software stack.

And the ADAS system co developed by Vrayde and the BOSCH demonstrates top performance in the market in China. And you can see there are some lots of real time broadcast. There are head to head comparison to Tesla FSD and then the system developed by Veeva and Bosch just to sort of show the absolute technology is the priority. And also in future we will work for the international market. Together we are committed to serve a wider base of OEM customers both domestically and internationally.

With the Geely Verizon, the GXR we co developed with them, it’s really a groundbreaking product and it’s a purpose to build autonomous driving vehicle for a taxi with lots of features I just mentioned in the beginning. And it’s also so suitable for scalability because the great cost of the Vantage. And we will work closely to continue to upgrade the GXL and possibly for future models. Okay. That’s the question about our collaboration.

That’s not my 100%. Yes, please go ahead. You have the second question?

Jiajie Shen/Ting Song, Analyst, JPMorgan/Goldman Sachs: Yes, yes. My second question is about our insights on autonomous driving. How do you think about the claim that autonomous driving will take away jobs?

Tony Han, Founder, Chairman and CEO, WeRide: Okay. Another very good question. I think probably last week, I was interviewed by CNBC and I was asked the same question. I think if you look back to the human history, there are many jobs disappeared like the invention of programmable switching machine replace human operator, the invention of washing machine replace laundry workers. There are lots of jobs, they are tedious and they are not so friendly to human being and also because of in many developed societies, aging problem is a big society issue.

And for aging societies like in Japan and Europe, we are short of human labors, especially for taxi drivers. So if we can replace this kind of jobs with machines, that’s really good. And that doesn’t mean like we are killing jobs. We are actually get rid of jobs that can good for the working class. We are basically facilitate the shaking of the jobs and there will be more other jobs created like in the related area like data labeling and the fleet management and fleet maintenance.

I think all of these jobs are very amicable to human being and nobody really want to be a taxi driver, drive a car for eight hours, sit there. So we do believe our vision is like we work hard to make all human being live better and this is our mission and vision. And so with this technology development, I think we can definitely just replace some tedious, not so well paid jobs with better job. That’s the advance of all human society and we are so lucky, we are proud to take part in this progress.

Jiajie Shen/Ting Song, Analyst, JPMorgan/Goldman Sachs: Understood. That’s all for my questions. Thank you.

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

Conference Operator: Thank you. Our next question comes from the line of Leo Yeo of CLSA. Your line is now open. Please go ahead,

Leo Yeo, Analyst, CLSA: Leo. Hi. Thank you for taking my question. This is Leo from CLSA. So quick question first, what is your current robotaxi fleet size?

And with this fleet, how many orders can you generate per day on average?

Jennifer Lee, CFO, WeRide: I’ll take that question. Hi, Lou. So for now, we have over 1,000 autonomous vehicles that includes RoboTaxi, RoboFast, RoboVAN and RoboSapers, all of our products. As for RoboTaxi, the total RoboTaxi fleet size is around 400 for now and with 300 plus are in China and less than 100 are in overseas markets, but expanding quickly. So the daily orders are not very meaningful as we are still scaling given our operation area is suspending in different like cities.

But we are optimistic about the midterm deployment and we are really committed to expand. As I mentioned about in this call, so we believe as long as the utilization rate for the global taxi can be higher and within the hybrid mode, it will be very promising about the pickup like getting the daily order to a similar rate of human drivers and maybe higher, giving you notable taxi can drive up to twenty hours a day in the near future? Thank you.

Leo Yeo, Analyst, CLSA: Hi, thank you. I’m glad that you mentioned the other level four use use cases. And could you elaborate more on their business models? And how do you think of these business lines when you propel the robotaxi at the same time? Thank you.

Jennifer Lee, CFO, WeRide: Okay. I’ll take this. So for other use cases, we generally run from the vehicle sales of a robobuzz, robobans, robobaspers as well as the recurring fee for the ongoing operational and technical support services. So all the Robo buses, Robo vans, Robo shapers, they are all purpose built products with high level of market readiness. This is unlike a few years ago, we have retrofitted vehicles.

All of those vehicles, they are already purpose built vehicles and designed from ground up to be autonomous vehicles. So it has very good performance and robustness. In the meantime, we expect lower unit costs for those for use cases as we continue to scale. Yes. In terms of the synergies, all of the different use cases, they do have great synergies with double taxes.

So these are the extension and complement of the double tax business. They provide rich data from a variety of operating scenarios. And for some of the market, other like our robust, dropper swiper and global van business line tend to serve as the spearhead when we enter into some of the new markets. And in some markets, the stakeholder, they may prefer products with lower speed and in geosensing deployment at the initial stage for them to understand autonomous driving. So that’s the other synergies we can see.

We’re expanding our sales force to promote those products as well as building a broader distribution network. Yes. Thank you.

Leo Yeo, Analyst, CLSA: Okay. Thank you.

Conference Operator: Thank you. As there are no further questions, I would like to hand the conference back to our management for closing remarks.

Tony Han, Founder, Chairman and CEO, WeRide: Okay. Thank you all. We are proud of the incredible progress we have made in 2024 and we are keen to drive further innovation as a key to our long term success. Thank you all again for joining our call today. If you have any further questions, please feel free to contact us or request us through our IR website.

We look forward to speaking with you in our next call. Have a good day. Thank you.

Conference Operator: Thank you for your participation in today’s conference. This does conclude the program.

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