Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's Second Quarter 2025 Earnings Conference Call. My name is Daryl, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Wina Huang, Head of Investor Relations at Canadian Solar. Please go ahead.

Thank you, operator, and welcome, everyone, to Canadian Solar's Second Quarter 2025 Conference Call. Please note that today's conference call is accompanied by slides which are available on Canadian Solar's Investor Relations website within the Events and Presentations section. Joining us today are Dr. Shawn Qu, Chairman and CEO; Yan Zhuang, President of Canadian Solar subsidiary CSI Solar; Ismael Guerrero, Corporate VP and President of Canadian Solar subsidiary Recurrent Energy; and Xinbo Zhu, Senior VP and CFO. All company executives will participate in the Q&A session after management's formal remarks. On this call, Shawn will go over some key messages for the quarter. Yan and Ismael will review business highlights for CSI Solar and Recurrent, respectively. Xinbo will go through the financial results. Shawn will conclude the prepared remarks with the business outlook, after which we will have time for questions. Before we begin, I would like to remind listeners that management's prepared remarks today, as well as their answers to questions, will contain forward-looking statements that are subject to risks and uncertainties. The company claims protection under the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations. Any projections of the company's future performance represent management's estimates as of today. Canadian Solar assumes no obligation to update these projections in the future unless otherwise required by applicable law. A more detailed discussion of risks and uncertainties can be found in the company's annual report on Form 20-F filed with the Securities and Exchange Commission. Management's prepared remarks will be presented within the requirements as SEC Regulation G regarding generally accepted accounting principles or GAAP. Some financial information presented during the call will be provided on both a GAAP and non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to enable further analysis of the company's performance and underlying trends. Management uses non-GAAP measures to better assess operating performance and to establish operational goals. Non-GAAP information should not be viewed by investors as a substitute for data prepared in accordance with GAAP. And now I would like to turn the call over to Canadian Solar's Chairman and CEO, Dr. Shawn Qu. Shawn, please go ahead.

Thank you, Wina, and thank you all for joining our second quarter earnings call. Please turn to Slide three. In the second quarter, we delivered 7.9 gigawatts of modules near the high end of our guidance. Storage shipment reached 2.2 gigawatt hours below guidance due to tariff impacts that shifted deliveries into the second half. Revenue totaled $1.7 billion for the quarter, also impacted by certain project sales delays. Gross margin exceeded guidance at 29.8% driven by a higher mix of North America module shipments, with notable contributions from our Texas module factory, which has made strong progress in ramping up. Robust storage performance further supported margins. Profitability was weighed down by certain nonrecurring operating expenses including the impairment of remaining legacy manufacturing assets. As a result, we reported net income attributable to shareholders of $7 million or a net loss of 8 cents diluted share due to the PIK accounting for our preferred shareholder of Recurrent. Over the past few months, our industry faced a challenging policy environment. While the industry continues to adjust to the recently passed One Big Beautiful Bill Act, I would like to discuss some potential impacts at this time. Please turn to Slide four. The One Big Beautiful Bill Act has sweeping implications for both supply and demand in the U.S. On the supply side, solar and storage domestic onshoring is challenged by increasingly stringent FEOC requirements and higher import duties on both equipment and components. According to Wood Mackenzie, up to 23 gigawatts of operating solar module capacity could be affected. Cell capacity, which requires more complex manufacturing processes and higher capital expenditure, could also moderate. On the demand side, outlooks across solar, storage, and distributed generation appear mixed. Other than for projects that have been safe harbored, the investment tax credit or ITC for solar will phase out by 2027. Meanwhile, energy storage projects must navigate annual FEOC thresholds to maintain developer credit. Despite this near-term uncertainty, the long-term outlook of our industry remains strong. AI, cryptocurrency, and other energy-intensive applications are driving rising electricity demand, and solar plus storage is among the most cost-competitive solutions to meet this demand. Future growth will continue to be underpinned by solid fundamentals. As with challenges we have overcome in the past two decades, we believe that a new paradigm creates new opportunities. Today, every part of our business is deeply engaged in the U.S. market. We deliver both solar and storage solutions across utility scale, DNI, and residential applications. We are a domestic manufacturer and a local project developer. We remain committed and will do what is necessary to continue prioritizing this market. Another ongoing commitment is our focus on sustainability. On May 29, we released our 2024 sustainability report. Please turn to Slide five. We are proud of our continued progress in our sustainability journey and reporting standards. In 2024, Canadian Solar reduced greenhouse gas emissions, energy, water, and waste intensities by 54%, 37%, 75%, and 53%, respectively, compared to 2017 levels. Consistent with our commitment to improving our environmental footprint, we increased the percentage of recycled and reused waste to 94% in 2024. We are maintaining 100% recycling or reuse of all packaging materials used in our production process. We also continue to uphold the highest standards of ethical business conduct across our supply chain. After receiving silver level recognition in 2023 for the RBA VAP audit of our Thailand module facility, we achieved another silver level recognition this year for our solar cell factory in Sichuan, Jiangsu Province, China. In 2024, we conducted 147 supplier ESG audits, including 31 on-site evaluations, surpassing our 2023 totals. Following collaborative consultations and corrective action plans, all suppliers met our stringent ESG criteria. With that, I will now turn the call over to Yan Zhuang, who will provide more details on our CSI Solar business. Yan, please go ahead.

Thank you, Shawn. Please turn to Slide six. In 2025, module shipments reached 7.9 gigawatts, near the high end of our expectations. Energy storage deliveries were below guidance due to tariff impacts, shifting some shipments to the second half. Despite this, we still delivered one of our strongest quarters with 2.2 gigawatt hours of storage shipments. Revenue reached $1.7 billion, with gross margin expanded 890 basis points quarter over quarter to 22.3%. This increase was primarily driven by a stronger mix of North American module volumes and the installation surge in China, which increased both industry-wide volumes and pricing. As a result, we achieved a sequentially higher average selling price in our fifth module business. Strong storage volumes and healthy margins further reinforced gross margin performance. Given the phase-out of legacy PERC technology, we wrote down our remaining related assets. Together with other smaller nonrecurring items, operating expenses rose sequentially from 13.2% to 15.3% of revenue, and we delivered $121 million in operational income. Although costs in the module business remained stable in the second quarter, we are now seeing rising supply chain costs driven by the anti-involution campaign in China. Combined with tariffs, duties, and the incremental impact of underutilization, these factors will raise unit costs in the second half. While module pricing shows signs of improvement, we expect price increases to lag rising costs, creating pressure on module profitability. We expect additional pressure from normalizing storage margins. The cost benefit from decreasing lithium carbonate prices, which supported gains in 2024 and the first half of this year, is now tapering off. For more details on this business, please turn to slide seven. In the second quarter, we recognized revenue on 2.2 gigawatt hours of storage solutions, with sizable deliveries to customers in Europe, North America, and Latin America. Due to tariffs, some opportunities shifted into the second half in 2026. Importantly, these are not lost opportunities. Demand remains robust, and we continue to actively support customers in navigating trade-related uncertainties. As of June 30, contracted backlog, including long-term service agreements, was $3 billion. To support our growth, we are expanding our globally diversified capacity from 10 gigawatt hours of DAS and 3 gigawatt hours of battery cell today to 24 gigawatt hours and 9 gigawatt hours, respectively, by 2026 year-end. The expanded DAS capacity will enable us to scale shipments as needed from quarter to quarter, with additional headroom if we add working shifts. Our battery cell capacity also strengthens our upstream strategy by helping us manage risk across cycles while providing customers with greater supply chain flexibility. The market is growing quickly, and we are scaling alongside it. To remain competitive, we must continue to uphold the highest safety standards and drive product innovation. Please turn to slide eight. In June, we successfully completed large-scale fire testing for our SOBANKS 3.0 energy storage system. The test confirmed that our system meets key fire safety criteria by containing thermal events within the single enclosure. The results were independently witnessed and verified by both CSA Group and the Energy Safety Response Group. In residential storage, EPQ won the Japan International Pioneer Design Award, or IDPA, in the electrical products category. This award was established in 2018 in Tokyo and has since become one of the most influential international design awards for pioneering design globally. This quarter, our proprietary residential energy storage system also earned the prestigious Red Dot Award, often described as the Oscars of industrial design. These recognitions are in addition to the IF Design Award and the MUSE Design Gold Award that EPQ received earlier this year. EP Cube has made strong progress in its target markets. Since we earned the prestigious JET compliance certification, shipments to Japan have surged, now approaching 1,000 units per month. We are also steadily advancing in Europe and the U.S. We expect significant growth ahead in this business, and we continue to develop other emerging profit drivers such as bundled sales solutions. With that, let me hand the call over to Ismael Guerrero, who will provide an update on Recurrent Energy, Canadian Solar's global project development business. Ismael, please go ahead.

Thank you, Yan. Please turn to Slide nine. In the second quarter, we generated $106 million in revenue. Revenue was sequentially lower primarily due to lighter project sales. We monetized over 200 megawatts of projects in Europe and Japan, including our first profitable sale of a battery storage project in Italy, while a large project sale in Latin America shifted into the second half of the year. Gross margin was 32.4%, reflecting healthy project sales returns and stable margins in electricity sales from our operating portfolio and growing power services business. The solar power system write-down in Latin America, combined with other nonrecurring instances, led to elevated operating expenses and an operating loss of $74 million. We remain focused on disciplined execution while managing ongoing trade and policy risks. We energized our first merchant 200 megawatt-hour Fort Duncan storage project in Texas. Despite Fort Duncan being a merchant storage project, we were able to secure both project finance and tax equity for this project. Within the quarter, we also achieved an important milestone at Blue Moon Solar in Kentucky, closing $260 million of project financing and tax equity. The off-taker for this project is Constellation, who will purchase power and renewable energy certificates generated by this nearly 100 megawatt facility. Please turn to slide 10 for an update on our pipeline. As of June 30, 2025, we own interconnections for 8 gigawatts of solar and 16 gigawatt hours of storage globally, excluding projects already in operation. Our total pipeline now stands at 27 gigawatts of solar and 80 gigawatt hours of storage. In the U.S. and Europe, we have 500 megawatts of solar and about 1.7 gigawatt hours of storage already in operation. Meanwhile, we are building more than 1.3 gigawatts of solar and 600 megawatts of storage in these markets as we speak. This positions us with one of the largest and most globally diversified pipelines in the industry, giving us significant runway to grow in the future and the flexibility to focus our resources to advance the most attractive projects and markets. In the U.S., we have already safe harbored 1.6 gigawatts of solar projects that are in execution or late-stage development. We continue to execute our safe harbor strategy on an additional 2.3 gigawatts of solar through off-site start of construction, providing both increased flexibility over the coming years and a competitive advantage as U.S. assets gain value under the updated tax credit policies. At the same time, we are expanding our battery storage pipeline, particularly in the U.S., Europe, and Japan, where we already hold strong market positions. Our O&M business continues to gain with 10.5 gigawatts currently in operation and 3.2 gigawatts contracted coming into service in the next quarters. Finally, we are advancing the development of our data center sites in both the U.S. and Spain, where we expect to have the first products ready within the next few quarters. Now I will hand the call to Xinbo Zhu to review our financial results. Xinbo, please go ahead.

Thank you, Ismael. Please turn to slide 11. In the second quarter, we delivered 7.9 gigawatts of modules, near the high end of our guidance. We shipped 2.2 gigawatt hours of storage below expectations due to delayed shipments. With the additional impact of delayed project sales, total revenue was $1.7 billion. Gross margin was 29.8%, elevated by a cell type C-related to a U.S. project and an ADCVD tariff adjustment. Excluding this one-time impact, gross margin would have been 21.6%, sequentially higher due to a stronger North American module mix and the storage volumes. Operating expenses increased to $378 million, primarily due to nonrecurring items including impairment charges related to certain solar and storage assets, as well as manufacturing assets. Without these items, operating expenses would have been $259 million, or 15.3% of revenue, compared to 16.3% in the fourth quarter. Net interest expense rose from $28 million in the first quarter to $35 million, reflecting higher borrowings in Recurrent Energy and lower interest income. Net foreign exchange loss was $13 million, primarily driven by dollar weakness. Net income attributable to shareholders was $7 million or a net loss of 8 cents per diluted share. This result included a positive $30 million HLBV or 45 cents per share from tax equity arrangements tied to certain U.S. projects. 19 cents per diluted share of preferred dividend impact led to the diluted loss per share to shareholders. Please turn to Slide 12 for cash flow and the balance sheet. Net cash inflow from operating activities was $189 million, compared with an outflow of $264 million in the first quarter. Cash inflow was primarily driven by change in working capital, specifically a decrease in inventory. Total assets grew to $14.8 billion with project assets rising to $1.7 billion. Solar power systems and battery energy storage systems now stand at $2 billion. CapEx totaled $173 million, mainly reflecting payments for existing capacities. Our full-year 2025 CapEx outlook remains unchanged at approximately $1.2 billion, primarily driven by investment in U.S. manufacturing initiatives. Total debt increased to $6.3 billion, mainly due to new borrowings for project development and operational assets. We closed the quarter with a cash position of $2.3 billion. Looking ahead, we remain focused on disciplined debt management and prudent liquidity oversight, aligned with industry dynamics and our financial fundamentals. In light of ongoing profitability pressures in both manufacturing and project development businesses, we expect to gradually reduce leverage from current levels over the next months. Now let me turn the call back to Shawn, who will conclude with our guidance and the business outlook. Shawn, please go ahead.

Thank you, Xinbo. Please turn to slide 13. For the third quarter of 2025, we expect to deliver module volumes between 5 to 5.3 gigawatts. For energy storage shipments, we expect to deliver 2.1 to 2.3 gigawatt hours, including about 250 megawatt hours to our own projects. We project third-quarter revenue to be in the range of $1.3 to $1.5 billion, with gross margin expected to be between 14 to 16%. The current lower margins reflect the impact of rising solar manufacturing costs driven in part by supply chain price increases and normalizing storage margins. For the full year of 2025, we are narrowing our module volume guidance to 25 to 27 gigawatts, including approximately 1 gigawatt to our own projects. The reduced midpoint of our module guidance primarily reflects our self-restraint, which results in a decision to reduce exposure to less profitable markets. For energy storage shipments, given increased near-term visibility in the trade environment, we are maintaining our storage shipment guidance of 7 to 9 gigawatt hours for the full year of 2025, including approximately 1 gigawatt hour allocated to our own projects. We are revising our full-year revenue guidance to between $5.65 and $6.3 billion. This reflects the delay of certain project sales into 2026 and more conservative module pricing in the second half driven by weakening demand in China. With that, I would like to now open the floor for questions. Operator?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment for your first questions. Our first questions come from the line of Colin Rusch with Oppenheimer. Please proceed with your questions.

Thanks so much, guys. Now, could you talk a little bit about the PERC write-down here and the impact ultimately on margins? I am just trying to get a sense of how much that really impacts, you know, from a percentage basis on your sale or on your module sales? Does that start to look like, you know, two or three points, or is it a little bit more than that?

Well, we decided to roll off pretty much all of our current equipment assets this quarter because we stopped the manufacturing of the product in Q2. So we think this is the right time for the write-off. Now the write-off was, I believe, quite a big impact. Yeah. It's $4,086,000,000.

Okay. But I'll follow up on the manufacturer afterwards. You know, just with the treasury rules that have come out, I think everybody's trying to understand how developers are going to approach their safe harboring strategy and qualification. Can you give us a sense of where you're at from a safe harboring perspective? You know, what you're seeing from any of your customers on the module side? And how you anticipate some of the enforcement realities for the industry given, you know, just your first look in less than a week of being able to evaluate the new rules.

Yeah. Colin, as you know, our subsidiary Recurrent is a long-term player with twenty years of operating in the U.S. market. So we have been safe harboring several times because ITC reached the deadline several times in the past ten to thirteen years. So over time, we approach the deadline we safe harbor. So we are very familiar with the road. So we’re pleased to see that the newly released guidance, the new guidance for the safe harbor, pretty much confirmed that our standard strategy for safe harbor is correct and also is prudent. So our current safe harbor project we see no change. And, as Ismael said in his speech, we are safe harboring a little bit more. Well, actually, we are safe harboring 2.3 gigawatts more of projects. So if Recurrent achieves this goal, then 1.6 plus 2.3. No. 1.6 plus 2.3. Well, we will be able to safe harbor somewhere close to four gigawatts. So that will give us a very strong pipeline in the U.S. You know, four gigawatts is almost equal to one gigawatt each year. So you can see that for, say, four years, fiber is pretty significant. But it shows a strong ability of Recurrent, the strong ability and very solid practice in the development procedure. As for the whole industry, that's a good question. We have been sending our Internet up, but it has only been a few days. So don't have that much industry-wide safe harbor information. However, I would say for the developers who have similar experience, they should see the same thing as Recurrent. So I think the industry has relieved that at least their work so far has been recognized. Ismael, do you want to add some more colors?

Thank you, Shawn. Look. I think, Colin, thanks for the question. I think we've been a little bit lucky too. Because many of our projects have local community others. So we started to safe harbor to make sure that we enjoy those others. And as a result, we have a pretty advanced pipeline of safe harbor already online. And we always use the off-site start of construction. So it looks like the current regulation is not changing that. So within a little bit of luck this time.

Okay. Thanks so much, guys.

Thank you. Our next question has come from the line of Philip Shen with Roth Capital Partners. Please proceed with your question.

Hi. This is Matt Ingram on for Phil. Thank you for taking our questions. You know, given the OBBB and FIAC in the U.S., do you believe Canadian Solar and its subsidiaries are currently FIAC compliant? If so, could you please give some details around what gives you confidence? And then if not, what steps are you taking to comply with FIAC? And then lastly, on FIAC, how are you planning for potentially stricter FIAC IRS guidance that could come out, you know, sometime next year?

Matt, thank you for the question. I kind of expected this question. Now as you know, OBBA has different requirements for different years. So based on that yearly FIAC requirement, yes, Canadian Solar is compliant with OBBA requirements at this moment. And we will continue, we believe we will continue to be compliant for the future years. As you know, every year, the FIAC condition changes, including the percentage change. So we have a plan to make sure that the Canadian Solar's three factories, which are a solar module factory, solar cell factory, and also the energy storage factory, continue to meet the OBBA requirement this year.

And just on, you know, potential guidance, you know, they're going to release guidance on the FIAC restrictions. And those potentially could be, you know, a little bit stricter than kind of the language that's in the bill. How are you guys planning for that kind of situation?

Well, our internal legal team, accounting team, and the external team have debated and done due diligence in the past month. Well, ever since July 4 when the OBBA was signed into law. We have been studying it and debating and doing due diligence. So we think our understanding of the bill is pretty conservative. And, well, there may be some change or some clarifications of the guidance. You know? Oh, well, I mean, the IRS guidance might clarify some of the points. But I believe as long as those are the guidance to interpret the OBBA, it cannot change very much from the legal language itself in the bill. Therefore, we believe some a little bit more restrictive or a little bit less restrictive guidance from IRS will not change our judgment call. So I think our current strategy is quite solid. First of all, we make sure our customers will be able to claim their ITC because our chairman meets the OBBA rule of that particular year. And, also, our factories, three factories in the U.S., will be able to claim the 45X for any of the particular year.

Great. Really appreciate the color there, Shawn. If I could just squeeze in one more on policy. You know, given the upcoming section 232 case on polysilicon and its derivatives as well as it seems like they're reinforcing UFLPA with Q cells getting recently detained. You know, how are you guys looking at your upstream supply chain? And maybe different strategies there for the U.S. capacity?

Well, you probably know that Canadian Solar filed our comment to the Department of Commerce for the section 232 polysilicon. And I believe you can get access to our filings through your lawyer or whatever. So basically, we believe that polysilicon for solar is not a national security concern. Because I do not think the U.S. needs that much solar. Anyway, so why is solar-grade polysilicon a national security concern? Now, the country has enough coal, oil, gas, you know, everything. Right? The country is very fossil fuel-planted. So based on that, we do not feel like polysilicon for solar should be a national security concern. However, we are waiting for the process to run to the end. And at this moment, I do not want to speculate.

Okay. Great. Thanks for the answers, Shawn. I'll pass.

Thank you. Our next questions come from the line of Maheep Mandloi with Mizuho Securities. Please proceed with your questions.

Hey. Hi. Thanks for taking the questions. Just on the FIAC side, I appreciate the color there. But can you just talk more about the 45X eligibility for the U.S. manufacturing line? The order strategy to be compliant there? Or do you need more information from treasury guidance to help with that? And then I have a follow-up with you on that.

Yeah. Well, I think our, you know, our team, our internal legal team, and our external consultants believe that OBBA is quite clear in terms of the FIAC and the material assistance definition and requirement. So we pretty much understand the meaning of those languages and the clauses. As I mentioned, the IRS guidance may clarify a few points, but as long as those guidance follow the language in the OBBA itself, then I think our strategy is, you know, we have a good understanding. Therefore, our assessment is solid. And for 45X, both the 45X for energy storage and for solar will continue according to the previous schedule. Thus, as you know, there's no change in terms of the schedule, in terms of the time frame, and also the ramp-down schedule of those incentives. However, there are different material assistance tables for each year. So we just have to, every year, do due diligence and calculate and just to make sure that our product meets those tables. And fortunately, solar has a global manufacturing energy storage is also more or less a global manufacturer. So there are suppliers of the key material for both solar and for energy storage from several different countries. So I believe that gives us the ability to navigate and to meet to comply with the material assistance requirement, the percentage for each year. Now you mentioned IRS guidance. Well, you know, people are happy to expect new speculate what much, you know, maybe the IRS guidance can help people a little bit. For example, IRS per publish a table or the domestic content in the past, which stops guessing, you know, each component a guidance specified percentage. It makes the job easy. And also, standardizes it. So we'll see whether the IRS guidance for material assistance follows the same thought, same path, or maybe follows a different path. So for me, you know, that's something we are waiting to see. If somehow they follow the same path, well, it stops then at least everybody will use the same table. But maybe it will follow a different path for material assistance. So that's something we are waiting to see. However, as I said, the OPBPA itself is already quite clear. For example, it defines the component like, to be, for example, over 60% or 2026, or I need a storage and I believe 55%. Right? Or 50%. Of solar. That's pretty clear. Any company who has employed a few capable content can do their calculation. So, yeah, just with this language, we have we can already calculate our percentage. But if IRS instead publishes a table for everybody to use, also, work. I say we're one way or another. You know, we already calculate. Look at our product. We think our so so so far, at this moment, our percentage will be way over above the minimum requirement for the next few years. So that's why I think we have a good strategy. You know? To be OBBA compliant.

Thanks. And I appreciate the color on the materials. Just a second. Let me just like, quick one on the 45X to get that. You anticipate reducing CSI Solar's ownership in the U.S. manufacturing. This just trying to understand, like, the strategy there and the timeline on when to expect any changes in the structures of the U.S. manufacturing.

This year, we do not have to, you know, our structure complies. Next year and the year after, we will have many companies will have to do something to make sure they always comply with the OBBA. SolarWinds do the same. As I said, we have a strategy. So we will be able to be, we will be like, you know, I think we have a solid strategy to be OBBA compliant every year.

Thank you. Our next questions come from the line of Alan Lau with Jefferies. Please proceed with your questions.

Like to ask on there was a meeting in China. I think it was probably Tuesday. In the Ministry of Industry and Information Technology. So first of all, we'd like to know if Canadian Solar has participated in that meeting. And then secondly is, do you think the price hike in China would lead to a price hike in the rest of the world as well?

Canadian Solar's representative, well, the Canadian Solar China factories received the invitation. So we sent representatives to the meeting. And the government in Beijing is trying to resolve some of the supply-demand balance issues. So I think it's a good approach. And, this is also, I think this is what other countries have been expecting China to do. So I'm glad the Chinese government got the message and started to work with the industry for a better balance of supply and demand.

I see. So I heard there was clear guidance on a higher module price after the meeting. So because in the results briefing, I remember we've mentioned that we expect this manufacturing cost hike. I guess, it's the cost hike in polysilicon and wafer. But if module prices are higher, do you think that would actually improve your margins?

Well, I think, yeah, answer to your question. You answered have seen upstream material price increase. I'm not going to say spike how much? But we saw some increase. Especially the polysilicon in the wafer. And I said expect the module price to go up and maybe lack the movement of the materials. Yan, you want to?

Yeah. So there's no top-down minimum pricing on module. However, there's the industry feel there are companies that volunteered to actually put on some more discipline. Know, some predefined price. But that's not a top-down. And, the execution for that price was not carried with high efficiency. So I have to say, So it's basically fuel mostly market-driven. The upstream is actually price went up because it's easier. Bar upstream because there's lack of a number of players. So that's why I said model price likely to go up as well, but, maybe not as much as the upstream.

I see that this I is yesterday night, President Donald Trump had You're breaking. Sorry. You were breaking. We hear you.

Seems to be from line Yeah. No. Can you hear me?

Yes. Now it is So we'd like to know your view on the U.S. solar demand because, President Trump yesterday has posted that kind of he would not approve any project, etcetera. So how do you think, like, the demand in the U.S. and how much projects might be affected? With the federal land, you know, we approval requirement.

I don't know. Well, not a market survey company. So you're asking the wrong person. And I don't want to comment on White House Speech Also, I don't want to comment.

I see. Yes, sir. Thanks a lot.

Thank you. Our next questions come from the line of Vikram Bagri with Citi. Please proceed with your questions.

Hi. Good morning, everyone, and I apologize in advance for another question on FIAC. But the press release mentioned that there have been some pushouts and I saw that the storage backlog declined marginally also in the second quarter. I didn't see a pipeline number in the presentation. I was wondering if you saw any cancellations in the quarter. And if there is a common theme that explains the pushouts or slash cancellations in the quarter, is FIAC playing a role? Are customers asking for confirmation of compliance in a contract before signing a contract, and that's sort of, like, creating an uncertainty or slowdown in backlog bookings. If you can just explain the pushouts and cancellations and if it's somehow related to FIAC.

The new FIAC requirement also takes effect next year. So this year's project is a project which I reached COD this year. And there's no new FIAC requirement. So, however, I mean, we mentioned there are some projects pushed to the second half due to tariff issues. The tariff is different from the FIAC. I also want to clarify that our pipeline didn't go down. We delivered 2.3 gigawatt hours. But we add new pipeline. So our new energy storage pipeline in terms of dollar value actually went up a little bit. You can find that in our press release. So, actually, we do have some major deals that are at the very last stage of negotiation. So there's some big numbers there.

Got it. And as a follow-up, you mentioned that the storage margins without the benefit of falling lithium carbonate pricing have been normalizing. Historically, you've mentioned 20% margins, and later on, 15% to 17% margins. Is the second half lower than 15%? Any indication on current margins or margin on backlog would be helpful.

We're working on the 20% as a target.

Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to management for any closing comments.

Thank you for joining us today and for your continued support. If you have any questions or would like to set up a call, please contact our investor relations. Take care and have a great day.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.