EHang Holdings Limited (EH) 2 Dec 222022 Q3 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by. And welcome to the EHang Third Quarter 2022 Earnings Conference Call.

As a reminder, we are recording today's call.

Now, I will turn the call over to [indiscernible], EHang Senior Director of Investor Relations. Ms. proceed. please (ph) Chi,

the you audio the Mr. us Mr. management the company’s The the being website. available of Thank the IR and Richard Please All Officer; be call Q&A call company’s will original the Executive management Fang, conference Officer, Chief third today’s which be successfully only. to team, Mr. Chief Hu XXXX. is on is prevail. Huazhi, English release will remarks. translation language will and discuss financial and Officer; earnings EHang’s Xin convenience IR the purpose team’s for afterwards. everyone. include website. on in note, In Liu, the joining recorded conference will statement quarter translations. company’s replay will Hello, Today, Operating for results followed on session A for posted follow by Chinese Financial case in Chief is discrepancy, Remarks of give prepared delivered any

we contain to forward-looking today’s provisions Reform statements discussion Securities Act continue, will of of Litigation pursuant Safe Harbor XXXX. the that made please Before U.S. the Private note

statements and risks involves inherent Forward-looking uncertainties.

Huazhi. not ahead, company’s Further any our the please and applicable that, in to unless note, With statements, are are from materially may results Also, stated Hu. numbers CEO, expectations over expressed assume obligation XXXX, turn Mr. go under public filings other the forward-looking call the let company’s the RMB required of Mr. for to law. any The me today. the be now does as uncertainties quarter SEC. except such, and information As all Please company and in actual third these Hu included presented otherwise. update regarding different risks is the with

which This application earnings is is of the [Interpreted] CAAC, translation EHXXX-S to EHang call the for Certification our today. at conference remarks. Aviation the of and joining Hello, submitted XXXX. Administration Thank the of the everyone. English China you the [Foreign Civil Since CEO's Language] end

crucial efforts certification committed promote not continuously for airworthiness the been certification XXX certification, actively operations, an path strategy the company's to Air past to EHang safety aircraft operator have commercial forward and Mobility but move a for the growth. in in and force also pre-requisite its We EHang of for and the only the to Urban the thus official two key catalyst becoming driving years. business it's In platform progress

team Every we'd investors, for and the of thank EHang wholly like support of expectations given dedicated long to and EHang member our regulators customers, value partners and attention stakeholders. their meet to our the support. Here, lasting the to are

the project, certification airworthiness in innovative is impact challenges of tremendous pandemic full continued an the along of As process China. with the

nights synergy. teams product difficulties collaborative to a and worked and in technology, the days tirelessly Our have certification overcome

have Additionally, the team. and are close they to the approved In officially subjects compliance other airworthiness, the design performance flight, strengths, trial continued aircraft, and words, human-computer control for airborne ground [indiscernible]. walked certification by about been to structural of etcetera. review of have cooperation configuration, airworthiness plans we confirmed. been greet the enter with CAAC all the station, means At has Including our interaction, specified CAAC expert their victory all present, expert and team the

final Verification and Compliance phases the certification Concept ongoing of phase a the Demonstration for of Planning As Compliance. has completed incurred EHang Requirements result, XXX and the already and Design, process Definition,

challenging through of conducting with and accordance which certification, data approved inspections, which tests, obstacles doing in accumulated team the is the completed across we be records most We could to overcame implement is most the the next than are demonstration that many What work uncertainties. we all data the the environment events. and have complicated altitudes, and solid safe in fog. demanding plans compliance. flight AAV final tests, the specifically is EHang, EHang drive certification as that we are reviews verification and flight typhoons, the deserts such analysis passenger-carrying Besides, phase over test and tests more of proof made. in laboratory and airworthiness about years, fully extreme ground to confident of flights have XXX CAAC high well test in The weather support as records the XX,XXX heavy expert in difficult as

out verification accelerated so as a test test and the this the certification have a process. compliance. of complete process carrying basis, we to flight of for the On some verification, We are supplementary type

for airworthiness system. unmanned to confident certification We complete world's fully aircraft the human-carrying are the first

strengthen Our CAAC confidence the the as and well derived and but support as and industry, the guidance. the innovative interest, open from not also their only of technologies, government, aviation Chinese from is innovation AAV our spirit

is steadfast standard first reference and autonomous at to globe. EHang everyone. of by the Civil year, a project, is to the high industries and ICAO, certification is are Innovation to XXX In easy over emission, introduced to ICAO’s been exploration November global of Mobility and and be XXst a airworthiness a China's a on these All CAAC of which the degree XXX regulations. class of in member and related EHang so, the as practice Symposia It and Montreal, providing empowered which breadth, results Assembly, certification EHang Air unmanned accessible attend RPAS Aviation shared ICAO human-carrying the invited Even deeps the innovation, to was innovative for safe, the EHang be headquarter the the Organization eco-friendly ICAO particular, countries project the years, aviation the the aircraft and airworthiness formulating forefront this Assembly, of Fair at which in pioneer. make September past ICAO regulators. with committed International eight not for the Canada emerging certification always to speed the honored across first In first mover its system has at and

medium Unmanned set zones actions. XXXX, development. government released the these the addition to how received CAAC development careful XX. and the boarding strong and and the In Civil EHang, we over accumulated batch XXXX. more are of Civil So Meanwhile, CAAC short, leading we like with norms, a of of principles see China the policies the and and prudent the Aviation. worldwide. continuously in more and term Air development and formulation to of Aviation stages a healthy pilot Civil significant in clarified measures and there to Unmanned to for Roadmap the Meanwhile, policies of industry improving have that and Mobility the the analysis X.X, new emerging These eVTOL first adhere and goals customers. some lead standards are to new the seven verification, to which the continuously are pleased contribute put driven for direction will they long always Currently, the Development proved total by into the this, taken relevant and the of years new the Urban XXXX Aviation and innovative industry expertise safety zones, and have experience also experimental in Unmanned August, and we and China of cities the In has support development XX buyers innovation, first support EHang local promote from preorders industry

development to as supporting to for logistics meet Against a up air We better applications reasons strategic by of diversification as after industries development this it, made infrastructures build bring need promoting air be completing and and create new strong like other we that provide to and the regulations are [indiscernible], of city the integrated industries, such achieve emerging actively AAVs. their for provide have industry. which operations development growth of and growth. goals building a backdrop, significant industry to basis expect to we pilot and EHang results management promising continuously further UAM while and smart UAM and practical explosive our partners, EHang followed the and will shareholders a well returns confidence operational our trail new the we sustainable grounds And

Thank will results Operating in QX. turn for our Next, call I business Xin the Mr. Officer, Chief to you. Fang,

overseas the [Interpreted] airworthiness certification This remarks. continued EH is XXX you, on the Language] Hello, Hu. focused of English quarter, remained the everyone. project and EHang is where COO's markets Since fully of October, to COVID-XX for and third swap prepare [Foreign Thank especially In commercial has translation China, and operations. Mr. we resurgence post-certification domestic Guangzhou, a across headquartered. the explore course to many cities

develop serious when our Jishou from we our altitude pandemic City are targeting third challenges to control Province, in Although, Since the Guangzhou markets efforts the in actively tourism, Guangdong continue Huangshan aerial EHang the City exploring facing more Hunan City a a following we province. quarter, Shandong potential in drive and AAV will UAM Province low measures, Mobility in diversified last local opportunities been and Province Air in year. resources have Qingdao formally and Routes Anhui to integrating in the we Initiative broader launched XXX ecosystem. City and

So cities over Shenzhen operation with far, as for aerial tourist to commercial operations. post-certification destinations. we XXX at X,XXX across have operational trial operations valuable such XX as These cover completed in spots accumulate EH and other experience scenarios sightseeing practical well China, spots flights first-tier Shanghai, Guangzhou, as

maintenance, further and and potential operations service XX AAV believe of the aircraft experience foundation airworthiness, In across Group. positive Group, our demonstrated as maintenance across significantly with will overhaul has maintenance improve Swire subsidiary HAECO which that solidified repair years into opportunities October, put spots. and for results, operations the in established system of cooperation assembly management all been have continued The and self-developed the EHXXX Group in we use operational system globe. over aftersales brings commercial platforms, digital and efficiency. test In current in AAV addition, training internal EHang We HAECO future. talent will network partnership manufacturing operation a

in participation front, strengthen the and customers and will It On fruitful Since the the key aircraft grade date. flight This Japan. in the footprint time total eVTOL beginning and logistics, projects. across in for smart preparations in excellent business include but achieved Osaka, European only Asia to flight two mobility Kansai, the Malaysia, a an an first played Europe. leaving the developing this a flight Japanese made subsequent EHang for to year, received opportunities expansion meaningful of the was including sea, the to In Japan, support point passenger role with Japanese Japan. we Thailand. XXX Furthermore, for cities the progress third have sea Union's of for XXXX UAM over at use important sightseeing in showcase also and Expo over which the an not flight aerial tour demonstrate further many four point cases international also in our demo And and of Asian we results markets, completed six Indonesia up AAVs. have regions, cities, of have pre-orders tour in EHXXX quarter,

across operations plan. integration which instance, Space EHXXX pandemic brings an AMU-LED to a our For coming concept Agency control October from the initiated but of Service measures and the by a EHang space to November, of challenges considerable resurgence UAM the project flights European process Overlay and is Geostationary European impact operations, in COVID-XX program Europe. the use Union validated the to certification airworthiness for XXXX In completed business the trail which verified the see SAMVA and EGNOS, our China, Navigation participate the and is continue EHXXX which objectives. development deployed to support the we to the project original end, in

total fourth quarter. to TC the Nevertheless, the our please AAVs situation in preparation preorders remain including Based outlook in optimistic RMBXX the in execution for The Richard, competencies, based XXXX core that leading final entering of on million. revenue now you. We current well favorable achieving our a deployment will turn Liu X,XXX for marketing phase, to RMBXX range process call based on commercialization chain guidance ahead. future. increasing about financial technological Richard million positioned adjusted China. the industrial and company's long-term sufficient the regulatory have expected be for with for the development for more financial company and and the UAM demand promising the grade momentum strategies, and and support, especially on EHXXX-S our confident of advantages, passenger over and and and I growth EHang also than corporate to go consistent hand, for the Thank our CFO, results. is the

Hello, Xin. everyone. Thank you,

of I changes the RMB our Before stated in details, that key for third a which numbers some All highlight quarter-over-quarter please of specified. are analysis and percentage in release I otherwise is unless XXXX the website. into quarter now Detailed are go earnings note points on unless IR press presented will on available all are otherwise. our are contained basis here.

the quarter performance reflects resurgence China. third COVID impacts Our from in

management near-term continue Mobility despite our improve the on operational to Air We efficiency cost of an long these can development integrated term becoming our continue towards that to focus to Urban deliver challenges. areas maintain growth execute we it operator. However, our as enhance strategy

measures Turning China. in RMBXX.X QX Asian to due AAV million were XXXX. compared from That results units for pandemic with in control AAVs in units in Total the unfavorable the QX with compared to The X market revenues remained related our with This from million strong, notably operating EHXXX QX. delivers impact, mainly in year. RMBX.X Southeast preorders said, X was market this and were demands resurgence QX. the

process EHXXX-S. focusing are Type As of final in the we the on Certification completing phase

X.X percentage but points a mobility such and new high XX.X% energy home expanding our in operating which competitive to million mainly RMBXX.X certification RMBXX.X decrease initiatives. UAM of QX, decreased at presence in QX, and eVTOL The QX. well see loss R&D product EHang coupled electric the In also to from Gross industries. mover fresh tests margin expenses compared stepping an our efforts are XX.X% million QX, from as our strategic products adjusted RMBXX.X in as that other These up development process. were expenses, of network was attributed was strengths representing at in are to X.X% operating and QX, and remains its in a in decrease in was With advantages compared in broad, improvement compensation different professional expenses fluctuated those by We preparing operating to our with share-based operations slight million the with it partnership as excluding expenses global market million and adjusted for commercial of other level our ongoing RMBXX.X expenses are cars. related QX. processes

RMBXX.X was in loss QX RMBXX.X net compared million in adjusted Our with QX. million

restricted As relatively attributed million was to cash cash, RMBXXX.X term operating healthy maintain continuous for balances equivalents, cash our short of end continue and flow. to of which the of balance sheet, investment we expenditures our and as of management cash QX,

around that see be Guangzhou growth certification. we new been we of new phase have sticking moving embrace of office Additionally, the a the It with current down cost to expected to optimize a to new office. prudent cost the to to us XX% completion is Nevertheless, to effective taking office compared control those our headquarter rental in expenses. give following strategy measures type company and a will is of estimated expecting by

stakeholders. while sustainable leading with for remain experience, industry remain resurgence term. pandemic probably We we headwinds challenge providing China, latest the near be the strategies. capture committed in remarks. to shareholders believe Given expect will and the such mobility UAM growth the term, to safe we a we of and prepared able technologies autonomous and the would a concludes for creating our comprehensive values great potential and our That longer But in a that

call the questions. ahead. open for go now Let's Operator, please

first Difficulty]. we comes line and session. of the the begin The from Ladies [Operator question-and-answer Instructions] [Technical question now gentlemen,

taking have you questions. first Type two Thank for Certification. I regarding my My questions. the is progress question (ph) of

in-depth of production, Thank see delivery enter [indiscernible] second how rate sourcing, lockdown, resilience into Can As we light year? in any still component cadence we of and that we terms Type any have of and by into the in question delay And revenue on that think bit encounter timetable do you. schedules. TC the these we hiccups end receive about Type expand more limit XXXX? should Certificate days. recent my in EHang of Certificate can And this COVID is we risk

Unmute Difficulty] queue? please by. Thank Ladies you. gentlemen, the Do in we stand please. [Technical the local you. line and [Technical Difficulty] Thank in have your the management

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you the Thank again answer. by. you hear Everyone have for the us. would for like can’t translation please. We translation, please to management Perhaps may the if rejoin management you line, stand

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Hu Mr. mentioned Certification entered Type the into has final CEO, EHang the our XXX As phase. earlier,

team. according data approved provides with to practical will complete the and over And together accelerate EHang Specifically CAAC few hence final support. demonstration it phase by the past The the of has CAAC expert a compliance that verification the process. the to the solid certification expert help to years and work the team, support the the accumulated of

complete are first, year, the to key originally scheduled As uncertainties, which for CAAC XXX a we out by world’s we are lot facing round of Type one it comes Certification of this December but was this year. the projects is when of

to get [indiscernible] us. the expert Specifically, members with TC closely at in of the site together CAAC the to work for EHang the team code

made the be That's China. members begun recently, in Guangzhou across recent impact delayed, country ease the all it timetable measures in the However, The decrease. to the to as is restriction together. epidemic will expected too it because have but long by COVID not come gradually the most difficult for resurgence be related might to steps

of our year. be all around This about is the expectation the translation questions. January next first So may

to next please? you. Thank to Would like the from the you move investor, question

Language] Okay. English answers of above. translation the is [Foreign [Interpreted] This the

your of second like original on other development epidemic companies. since had year, the significant beginning business the projected and question, Regarding a Chinese has just our this trends the impact

tourism of our main applications. In initial the targeting for the the affected is industry by is development, AAV terms business markets of one our industry’s Well, product epidemic. the severely it

Zhaoqing been Province, Huangshan Shandong have pandemic strict and City more inflammation, opportunities Jishou local received cooperation support City trust, potential Guangdong Anhui the we and customers. Province, in in adequate Qingdao And City in city and province, exploring governments in the despite in cetera. Province, we However, and Hunan et from

situation recovery And Type on timing the revenue the product the gradually the subsides significant China. industry epidemic economy product. gradually in of to expectations able year's both of while our market the Certificate production our the orders after the no the And in potential and could tourism has supply place will epidemic customers on above last obtaining the deliver chain. ideally, addition, depending and we In and be

to answer. for achieve So are return this year. translation And for of is that the the growth all more likely about next guidance and high trajectory. we And next please growth significant year revenue to the wait details, our

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on my take management [Foreign Okay. myself. two for Yeah. questions. I Language] have congratulations [Interpreted] translate will results. to and question I Thanks the

similar The you the us XXX. model, breakdown, that far? aircraft is this is And terms the costs support the scenarios one Could please [indiscernible], Thanks. management the this And what model can from EHang and scenarios is so how passenger decrease battery we at to? of EHang breakdown are first and one the penetrating types of Difficulty] pump we cost the above second share apart the the have the [Technical from view we take especially battery, who part preorder EV? many the are in transportation

is Thank for Richard. you the questions. This

me let COO, first take our will Let question. your take I Xin question then second your and

the three into cost divided major So portions. structure the EHXXX basically, be AAV can of

propulsion of and located one-third leading and be an and the cost area, whose propulsion mobility which system a battery together respect term system and portion as respect known our product system; batteries of roughly in others. are of headquarter the -- energy most includes power that the and more of especially suppliers, in or EHXXX where second, the AAV is. with cost to Delta composition the similar First, drivers mainly the long our total River can of less. as electronic us an third, new fuselage a China, major of EV. relationships motor motors In management It just from suppliers the infrastructure; regarded electric And perspective, hub components In or now more BMS. world manufacturing Per qualified South those mentioned of percentage the each

in our peer and access So of supply countries. number costs competitive of to chain, terms this to high in quality an easy large as respect other edge give us a companies the and compared efficiency in suppliers

let I will second So question. your Xin take

translation of [Interpreted] [Foreign Okay. Mr. This the answer. is Fang's Language]

XXX units of markets. Asian far in addition preorders AAV year, So the EHang this to in over

low orders Qingdao EHang such They Hunan customers Guangdong Jishou [indiscernible] city, Province. City are in to placed have interested from very We in in after and potential orders AAVs, in tourism the areas expected obtaining pipeline, And in AAV’s deploying be altitude local many the [indiscernible] Province, certificate. develop in XX gradually domestic potential as Zhaoqing districts are industry. delivered which tax Guangxi the to to and include units

transportation, In units we delivered aero has XXX altitude addition, [indiscernible] this additional project. to X to as customer of low has customers and XXX the order the apart units who developing to hospitals project purchase EHang a also from sizing EHang fighting And units intends market, XX contact evolves. firefighting and our such potential emergency been needs have an the department And Qingdao by tourism the are for of in with as model. about which X fire some

the Given we that our firefighting aero invest target by tourism, the market in most will This future. the The cases. the emergency all and near initial translation. resources. is more this followed significantly of the low the be is altitude And use transport which revenues primary the market from

Thank De Securities. you the answers. Please Tianfeng proceed. next the from The line next question question. Lu of for for from moment One comes the

et our Thank noticed TC continue and If so is softening, cetera? will be much. that outlook for second especially team in supply bans the question management a to the future, series is end example, first will see question. you on I'm we Guangzhou. like prevention on experiencing China's My recently, And ease question policy of be demand market trips. is, future, potential new my issued domestic chain? the my policy any taking U.S. in epidemic high there'll you approval just wondering, and on Thank some we has for export EHang these what that impact

is Richard. This

Let me your questions. take

potential will U.S. when R&D of our as be we products. But chain this strategies. in those we all, and impact supply on chain. further not are our That's implement of chips our supply using be no First we will you can mindful ban there imagine,

stability fully establish Additionally, a optimization or qualified measures partnerships. of our and the sure mechanism to recently. even the strong have question, to our quality COVID review strict and any and with And we your always of standing second yes, to been adopt easing respect chain. engage long supply seek control In we suppliers prevention we experiencing to

Guangzhou, has where suit. initiated following have you so we ago. headquarter just gradually mentioned doing since seems cities And days As the it two more

So this to good very is a sign market. the

Given measures further the prevention COVID to normal. back be can can be travel loosened,

are challenges on eliminated, ease this is business. when is the it or further So expected to impacts have positive

respect For and facilitating will target markets, able thus respect tourism the example, we to operating in complete process. difficulties of normal. facilitating without tourism the Thus relevant to customers initially type allocations the will orders. on-site industry, help travel be to back which to inspectors certification, to check of you conveying the In

opportunities obtained, with going next to Thank market it efforts us capture forward. growth would will to expected this is you. coupled So TC we allow our be believe soon rebound business year and our

Seeing the questions. in back more remarks. the Ms. questions let for Chi for turn closing you to queue, Thank call me no the (ph)

you, and you all our on participating call. today's thank for Thank operator,

questions, by our Thank on our through contact We the interest team to have call. or IR IR you our earnings website. investor appreciate next and provided our following calendar If you. look forward further participate events information please your e-mail

call. the all This you, concludes again. Thank

may You disconnect. now