Earnings Call Transcript - GGR Q3 2022

Operator, Operator

Welcome to the Gogoro Inc. Q3 Earnings Call. This session will be recorded. I would like to introduce Bruce Aitken, CFO of Gogoro, who will kick us off.

Bruce Aitken, CFO

Thanks, Operator, and thanks to everyone for taking the time to join us today. I'm Bruce Aitken, CFO of Gogoro, and I'm pleased to welcome you to our third quarter 2022 earnings call. Hopefully, by now you've seen our earnings release. If you haven't, it is available on the Investor Relations tab of our website, www.investor.gogoro.com. We will also be displaying materials on the webcast screen as we go along. We're looking forward to sharing our Q3 results, as well as providing some guidance on what we're seeing as the outlook for the fourth quarter. Before our CEO, Horace Luke, shares, I'd like to introduce Michael Bowen of ICR, who will share the process for today's call and provide some important disclosures. Michael?

Michael Bowen, ICR

Thanks, Bruce. I'm sure you're all looking forward to hearing from Horace and Bruce, and on behalf of Gogoro, I would like to remind you of a few things. You are all currently on mute. If you have a specific question, please use the chat function in the system to submit questions, and we'll answer as many as time allows. After Horace has given a brief overview of Gogoro and some of the business highlights from Q3, we'll first go a bit deeper into the Q3 financial results. During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our third quarter and fiscal 2022 results. Management's expectations for our future financial and operational performance, the capabilities of our technology, projections of market opportunity and market share, our potential growth, statements relating to the expected impact of the COVID-19 pandemic, supply chain issues, and other headwinds facing the company, the company's business plans including its expansion plans, the company's expectations relating to growth in China, statements relating to the potential of our strategic collaborations, partnerships, and joint ventures, statements regarding regulatory developments, and our plans, prospects, and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning these risks is available in our earnings press release distributed prior to the market open today and in our SEC filings. We undertake no obligation to update forward-looking statements, except as required by law. Further, during the course of today's call, we will refer to certain adjusted financial measures. These non-IFRS financial measures should be considered in addition to, not as a substitute for or in isolation from IFRS measures. Additional information about these non-IFRS measures, including reconciliation of non-IFRS to comparable IFRS is included in our press release and investor presentation provided today. Now, over to Horace.

Horace Luke, CEO

Thanks, Bruce and Michael. Thanks for joining our call today. We're pleased to have this opportunity to meet with you all and provide an update on both the third quarter and how we see the balance of the year shaping up. Before we cover Q3, I do want to quickly speak to one important milestone for Gogoro. I've just returned from India, where we announced a battery swapping pilot in Delhi. We're working closely with Zypp Electric, India's largest dedicated EV B2B demand aggregator that, like us, is committed to introducing sustainable electric transportation to the B2B last-mile delivery sector in India. We're excited to demonstrate Gogoro's battery swapping and begin getting specific market feedback. I'm always energized when visiting India because the need for cleaner transportation and energy solutions is so clear. This was especially evident last week by the fact that the air quality index reached over 400 and continued to increase over the weekend, breaking all records for Delhi. We can do better. I'm thrilled to be working with Zypp, and with the support of the Delhi and Indian government, Gogoro sustainability technology can make a difference in the day-to-day lives of both vehicle riders and all the residents of Delhi and the rest of India who are exposed directly to high levels of pollution. The work begins now. Shifting to Q3 results, they were in line with our expectations. Our Gogoro network continued to accumulate users, and we now have over 505,000 monthly active subscribers. We continue to deploy GoStations in Taiwan to grow network capacity, maintaining network efficiency, and ensuring a positive customer experience. As always, these stations are deployed intelligently using the data we accumulate from our over 370,000 battery swaps daily and 350 million battery swaps since we started. The two-wheeler market in Taiwan continues along the trend that began in 2021 as a result of COVID and other factors. Total scooter sales in the first three quarters of 2022 are down by just over a percent versus 2021, but down 20% versus 2020. A total of 18,657 Gogoro vehicles were registered in Q3, and a total of 22,197 Gogoro and our Gogoro partner, PBGN vehicles were registered in Q3. Despite this overall market slowing, electric two-wheelers' demand continued to grow, with electric vehicles representing 11.6% of all vehicle sales in the first three quarters of 2022 versus 9.9% of all vehicle sales in the first three quarters of 2020 and 10.6% of all vehicles in the first three quarters of 2021. Sales of Gogoro and PBGN vehicles have slowly increased and now represent 10.7% of all vehicles sold year-to-date in Taiwan. In Taipei, our market share penetration reached 19.1% in the first nine months of 2022. We believe these trends toward the adoption of electric vehicles will continue as consumers choose cleaner, greener mobility solutions. If governments are seriously committed to reducing carbon emissions and achieving their electric vehicle penetration goals, they should stop subsidizing gas prices and the purchase of gas vehicles and should be considering the long-term environmental and health costs of the ongoing sales of ICE vehicles. The pollution challenges in Delhi that I mentioned earlier are by no means limited to India alone. While not 100% attributed to ICE two-wheelers, they are certainly made worse by the use of low-grade fuel and the ongoing reliance on ICE vehicles. The long-term health impacts associated with high pollution levels are clear, and we must reduce emissions across the board in any way we can. A great example of a public-private sector effort to reduce pollution levels is the launch of GoShare, our sharing service in Taichung together with the Taichung city government and TSMC. In Q3, TSMC purchased 250 Gogoro Smart Scooters and designated this fleet of Gogoro vehicles to be part of GoShare service with a goal of making a direct impact on reducing carbon emissions in Taichung City. This helps the city solve the severe air pollution issues it has. On the private front, we are working with several well-known international food chains to convert their delivery fleets to Gogoro scooters throughout Taiwan and working with a number of larger employers who are offering employees vehicle purchase subsidies in an effort to lower their overall carbon footprint. We welcome any enterprise, any government, and any industry to engage with us to develop a program to lower carbon emissions. At Gogoro, ESG is important to us. We are on track to achieving our goal of using 40% renewable energy in our own manufacturing facilities by the end of this year and are opening and operating multiple retail locations that are 100% powered by renewable energy. We are also working towards giving all Gogoro customers the option to select renewable power for their battery swapping. Despite our China plans continuing to be significantly impacted by COVID, macroeconomic, and geopolitical factors, we are making progress in key international markets. In addition to the recent announcement from India, Gogoro vehicles are now for sale in Israel and are gathering positive reviews. B2B customers in Korea continue to expand their dedicated fleets of vehicles and GoStations. Our pilot in Indonesia continued to inform our plans for market entry. Our Singapore government-approved sandbox pilot is about to go live. There are other efforts underway, which we will announce as appropriate. International markets are critical to our success, and with each new launch and each new vehicle partner in category, we continue to make progress towards our objective of electrifying mobility with our sustainability technology. These markets take time to develop; in most, penetration of electric vehicles is up 1%. We will continue to work with our local partners on vehicles, deployment of network, government policy influencing, and general consumer education. It is becoming clear that B2B opportunities, while quite different than B2C market, represent an immediate opportunity for Gogoro. The value proposition of battery swapping for a B2B fleet operator or an individual rider is clear. Simply put, time spent charging a vehicle is lost revenue. Most B2B operators and riders exceed the capacity of their batteries on a daily basis. Given that reality, battery swapping saves hours of charging time and keeps a vehicle on the road running all day long. We are focusing on the B2B market and international markets as it is a way to prove our technology, use case, safety, and data-driven benefits of Gogoro Network ecosystem. To ensure that we capitalize on the market potential both in Taiwan and internationally, we have made some organizational changes as announced in early October. These changes give us a clear focus on reducing inefficiencies across our organization and better executing on expansion and sales opportunities. We expect to generate savings via an increased focus on product cost, inventory, and overall corporate spending, and expect to see revenue growth in 2023 as we bolster our Taiwan and international sales and business development organizations. We'll provide further updates about the scope and quantum of these savings in our Q4 earnings, but efforts are well underway to ensure that Gogoro is operating as efficiently as possible given the current economic environment. Let me quickly recap our macro strategies for 2022 and how we're doing. We have three areas of focus that we'll continue to work towards. First, we plan to continue to expand our vehicle and hardware sales in Taiwan by increasing our penetration, broadening our coverage, and growing sales of B2C, B2B, and B2G customers. Secondly, to further develop our solutions business, we plan to build on the success of our Gogoro component kits to enable our partners to further diversify product offerings and launch multiple SKUs in Taiwan and internationally. Finally, to grow our Gogoro network business in Taiwan and internationally, we plan to increase GoStation density, continue to improve network efficiency, and launch services in additional cities. We're passionate about what we do. We make it irresistible for consumers to be responsible through increased efficiency and environmentally friendly solutions. I'm proud of the work the team has put in to continue to make progress toward these goals, which will allow us to continue to penetrate the Taiwan market with our vehicle partners and begin to build momentum for growth overseas. I'd like to invite Bruce to update some key business highlights and review our financial results in a bit more detail.

Bruce Aitken, CFO

Thanks, Horace. On a year-over-year basis for Q3, excluding the foreign exchange impact, both Gogoro hardware and Gogoro network revenue increased, gross margin increased, sales of hardware and network services in Taiwan met expectations, and we continue to focus on international opportunities. Q3 was a quarter where we executed well despite the difficult macroeconomic environment. Our Gogoro network revenue continues to grow with accumulating subscribers. We now have over 505,000 monthly subscribers and expect that number to continue to grow. We saw strong growth of nearly 30% in the Gogoro network business, record quarterly revenue of $33.2 million on a constant currency basis, and we continue to keep close to a 100% attach rate of customers. Despite the slow two-wheeler market so far in 2022, as described by Horace, in the first nine months of the year, electric vehicles as a percentage of total vehicles increased by 9.7% versus 2021. Both Gogoro and our vehicle partner sales grew, Gogoro's marginally, while partners grew by 28.2% versus 2021. This is a shift in market share we have planned for as we broaden our reach as a platform. Gogoro and our vehicle partners' market share both grew in the first three quarters of 2022 versus the first three quarters of 2021, and Gogoro and our vehicle partners represented 92.4% of all electric vehicle sales in the first nine months of 2022. This figure typically ranges from 90% to 95% of the total market, and we're happy to see growth in the overall electric sector in Taiwan. Our gross margin was up both quarter-on-quarter and year-on-year, and we expect to maintain a similar margin profile during Q4. Some business highlights for Q3: Q3 2022 was in line with expectations despite the challenging external market conditions. We saw an overall increase of 10.7% in revenue versus Q3 2021, an increase of 4.6% in hardware revenue, and an increase of 28.5% in Gogoro network revenue versus Q3 2021 on a constant currency basis. We also continue to accumulate subscribers on our Taiwan Gogoro Network and are most pleased with those results as they demonstrate continued growth and the accumulating subscriber base and recurring revenue generated by our battery swapping business model. According to statistics published by Taiwan's Department of Motor Vehicles, there were 18,657 Gogoro vehicles registered in Q3, up 21.4% from registration statistics for Q2 2022. The total Taiwan two-wheeled scooter market volume of approximately 534,000 units for the first nine months of 2022 is the lowest since 2015. Despite this low volume, there are some positive indicators for both the transition to electric two wheelers, as well as for Gogoro and our powered by the Gogoro Network partners. Total sales volume of Gogoro vehicles in the first nine months of 2022 are slightly up versus the same period of 2021. Additionally, partner vehicles which are tracked under each brand's sales achieved a 28.2% growth versus 2021. We extended our Taiwan channel, and now Gogoro vehicles are being sold in a total of 463 traditional scooter sales locations, making Gogoro vehicles broadly available. Increasing the customer touchpoints is important. Our market share in the six biggest cities in Taiwan remained strong, with Taipei continuing to be the largest single market share city with 19.1% share in the first nine months of the year. In Q3, we began selling Gogoro vehicles in local large format retail stores and in the Taiwan store locations of U.S.-based membership warehouse retail stores. Sales of vehicles and associated registration figures for Huan Huan services in China continue to lag expectations. Because of the substantial external headwinds from COVID lockdowns, supply chain issues, retail traffic, spending reductions, overall consumer confidence, and other factors, we've slowed the deployment of network infrastructure in China. As of September 30th, we've deployed 123 stations in Hangzhou, 68 stations in Wuxi and 64 stations in Kunming. We will delay the further expansion of Huan Huan networks pending more clarity in terms of the uncertainties described above. We continue to explore new vehicle development partnerships. A local OEM has recently released a low-cost B2B focused SKU, which is available for fleet purchase directly from Huan Huan for approximately RMB1500, which is about US$210. Providing customers with sufficient choices of power, price, and styling is important for scaling the Huan Huan network. Q3 financial highlights: Our Q3 results exhibit both continued progress in difficult circumstances and that the shift to electric mobility continues to gain momentum. Specifically, let me provide some color into our revenue, gross margin, EBITDA, and net loss results, as well as providing some updated guidance for the balance of 2022. Before I go into details, let me say a few words about exchange rates. We booked the vast majority of our revenue in Taiwan dollars but now report in U.S. dollars. This year, the change in exchange rate has been substantial, with the U.S. dollar strengthening against the Taiwan dollar by 9.2% versus the average exchange rate of Q3 last year. Given our revenue concentration in Taiwan dollars, this is not really an operational issue but purely a foreign exchange translation issue. This exchange rate change has resulted in a U.S. dollar reporting difference of almost $13.5 million in revenue since the beginning of the year. Third quarter 2022 financial overview: First, operating revenues. For the third quarter, revenue was $102.2 million, up 1.5% year-over-year and up 10.7% year-over-year on a constant currency basis. Had the foreign exchange rate remained constant with the average rate of the third quarter of 2021, revenue would have been $9.2 million higher. Sales of hardware and other revenue for the third quarter was $71.8 million, down $4.1 million year-over-year but up 4.6% year-over-year on a constant currency basis, indicating that revenues would have been $6.5 million higher. Gogoro network revenue for the third quarter was $30.4 million, up 17.7% year-over-year and up 28.5% year-over-year on a constant currency basis, indicating that revenue would have been $2.8 million higher without the exchange rate impact. Total subscribers at the end of the third quarter was more than 505,000, up from 418,000 subscribers in the same quarter last year. The Gogoro network revenue increase was primarily due to the accumulating subscriber base and the high retention rate of all subscribers. For the third quarter, gross margin was 17.4%, up slightly from 17.3% in the third quarter last year. For the third quarter, non-IFRS gross margin was 20% up from 17.3% in the same quarter last year. The non-IFRS gross margin improvement was driven by an increase in the average selling price of our vehicles, favorable changes in our product mix, and the improved cost efficiency of Gogoro's network operations. For the third quarter, net income was $56.4 million, up $69.8 million from a net loss of $13.4 million in the same quarter last year. This was primarily due to a favorable change in the fair value of financial liabilities of $85.8 million in the third quarter, due to a smaller liability on outstanding warrants compared with a $1.7 million loss in the same quarter last year. This was partially offset by an $11.4 million increase in share-based compensation, a $2.1 million increase in sales and marketing dollars, a $1.8 million increase in research and development expenses, and a $1 million increase in general and administrative expenses. Non-IFRS net loss was $19.3 million, up $4.6 million from $11.7 million in the same quarter last year. This was primarily due to the $4.9 million investment in operating activities. For the third quarter, adjusted EBITDA was $9.2 million, down from $15.2 million in the same quarter last year. The decrease was primarily due to a $2.1 million increase in expenses for sales and marketing programs, a $1.8 million increase in research and development expenses, and a $1 million increase in general and administrative expenses, as well as the negative foreign exchange impact. With the addition of the new $345 million credit facility and with $249.1 million in cash at the end of the third quarter, we are well positioned to manage our liquidity in what is currently a complex macro environment. A majority of our payment obligations are denominated in Taiwan dollars, so we benefited greatly from maintaining a high U.S. dollar cash denominated balance since early April 2022. Q3 was one where our vehicle business followed the overall market trend. We maintained market share, executed to our plans, and our business continued to accumulate subscribers and showed healthy revenue growth due to the unique nature of our business model. We expect Q4 to continue in the trend of the first three quarters of the year. As such, we're updating our 2022 revenue guidance to $370 million to $390 million. Nearly all of Gogoro's 2022 full year revenue will be from the Taiwan market. Michael, I'll hand it back to you now for Q&A.

Michael Bowen, ICR

Thanks, Horace and Bruce for that update, details on financial results, and forward guidance. As attendees are formulating questions, I will go ahead and ask two questions, which I think are likely on everybody's mind given what you've just shared. So let's start off with number one. First question is the collaboration with Zypp sounds like an exciting opportunity for Gogoro. Can you please give us some additional details on the partnership? Additionally, you mentioned a few B2B opportunities in other countries; has Gogoro changed your strategy to focus on B2B instead of B2C going forward? Is the B2B model different financially?

Horace Luke, CEO

Thanks, Michael. As the world returns to mobilize again, we will begin to travel. One thing that has been very clear is excitement in the B2B world for electric vehicles and for our battery swapping system. Regardless of the country, the value proposition is extremely clear for the B2B segment because of the battery swapping. There's no downtime or waiting for the vehicle to charge in the field, allowing B2B customers to best utilize their fleet. B2B riders are high energy consumers; they typically ride about 3,000 kilometers per month or even more, and are pretty demanding, so they help to fuel our technology in each of the three markets. Governments are also recognizing the benefit of electric vehicles with B2B as it mainly reduces emissions and are starting to put regulations in place to limit or eliminate the use of gas vehicles in delivery fleets. The pilot we're launching in Delhi also allows Zypp and others to test out and see firsthand the benefits of battery swapping and the actual user experience on the Gogoro network, as well as providing greater user impact through Gogoro; we can actually continue to improve and enhance our services. There are about 100 Gogoro vehicles in Delhi, six GoStations; we support the vehicles and we expect to activate the pilot in December. Ultimately, our solution works in both B2B as well as B2C use cases. We can work with partners to deploy this strategy under the Last Mile delivery, ride-sharing, scooter taxi services, or other solutions. We welcome any interest in the B2B segment or others that have interest in our battery swapping system.

Michael Bowen, ICR

Question number two. For Bruce and Horace, you've mentioned on the call that development in international markets is critical to Gogoro's growth. We also understand the slower than anticipated development in China due to COVID, macroeconomic factors, and other reasons. Can you please provide additional color on which international market you foresee will become the fastest growing, with the fastest adoption and the biggest impact both financially and market share-wise?

Horace Luke, CEO

Well, first, remember there's still a lot of room for us to grow in Taiwan, both in terms of Gogoro vehicle sales, vehicle partners, and vehicle sales, as well as cumulative subscribers in Gogoro network. We'll keep innovating for the Taiwan market, but as you mentioned, international markets are clearly important for growth. Each of the large markets in Asia represent both opportunities as well as challenges. China, as we discussed, is challenged at the moment; India represents a great opportunity, and we're excited to see how it unfolds and do expect revenue from India in 2023, both in hardware sales as well as network revenue. Other markets are also at various stages of development. We are already generating revenue in Israel and Korea, expect to see revenue from Indonesia in 2023, and also a few other markets that we will announce at the appropriate time. Each market is unique and will develop at its own pace even given a wide range of factors. The Taiwan electric two-wheeler market was almost nonexistent when we began selling Gogoro vehicles, and now electric vehicles represent more than 10% of the total market and over 20% in Taipei. That level of adoption has come through individual consumers choosing more sustainable mobility solutions. In other markets, there are a variety of drivers for adopting electric and our battery swapping vehicle specifically. Consumer choices, government policies and subsidies, the safety of our battery swapping system, as well as reduced operating costs of the vehicles since the cost of batteries are not included. The total cost of ownership and our operational base indicates there is a minimal difference between either ICE or battery charging vehicles. We believe that people will see significant user experience and safety by choosing and joining the Gogoro network. This year, almost all of our revenue is coming from Taiwan. We expect international markets to make significant progress next year, but we're not ready to provide a detailed revenue forecast as of yet.

Michael Bowen, ICR

Operator, if you can now turn it over to Q&A please.

Operator, Operator

Question from the line of Benchmark Company.

Unidentified Analyst, Analyst

First one, just to follow-up on Michael's questions earlier. In regards to your B2B business, how should we think about the monetization ramp-up in the next couple of years? In other words, say by 2024, how can we think about the revenue mix of your B2C business versus your B2B business? And also, is there any margin difference between these two segments?

Bruce Aitken, CFO

Thanks for the question. A couple of things: we're not yet providing a detailed breakdown, as Horace mentioned, of the revenue split between B2B and B2C markets. What I can tell you, though, is a couple of interesting things about the B2B business model. Now, the first is that, as Horace mentioned, a typical rider rides over 3000 kilometers per month in a B2B use case. So two things happen. The first is that their average consumption of energy therefore goes up dramatically, and that means that we get bigger ASPs on a per rider basis for each of those because the amount of energy consumed is much higher. Because of that, we can also depreciate the batteries and other CapEx in our system a little bit more quickly. So we're eager to learn as much as we can through the two B2B pilots that are active right now. We believe this will be a great additional service offering that runs in parallel with B2C because basically, it's kind of at different times of day when different kinds of services are being performed on the network. In a sense, if you can think about B2B as the base load of a network, when a telecom rolls out a network, they want to ensure they've got a certain number of built-in subscribers. For us, that can be the B2B business. And then on top of that, we can build the B2C business as consumers become more educated and eager to electrify their mobility needs on a go-forward basis.

Unidentified Analyst, Analyst

That's helpful. Additionally, regarding your updated guidance, it seems to suggest a fairly broad range for Q4 revenue. What are the key factors we should consider to achieve the low end versus the high end? In other words, what are the variables you are currently observing?

Bruce Aitken, CFO

As you may recall from last year, our Q4 was quite large. Last year we substantially exceeded our Q3 guidance. There is a lot of uncertainty in the market right now for 2022. So we are taking a conservative perspective. We do believe obviously we will hit the low end of the guidance. We think we should be in the middle of the range that we have provided, which was in the low end of the previous range of 380 to 410 that was previously spoken about. We are confident that we will be able to deliver those numbers in Q4. Whether there is upside or not, I think is a function of how the market responds to the last few months of the year. The other thing that I will indicate is that there are some subsidies in Taiwan that will be shortened, and this year the government will stop offering some of their central subsidies around the middle of December, which could mean that our sales at the back end of the month of December slow just a little bit. Those subsidies are guarantees going into next year. It's really an administrative issue because the government has to be able to register vehicles. It has to be able to access applications for those vehicles and close them out at the end of the year. So it's not a change in subsidy; it's the application of that subsidy and the ability for the government to process it by end of year. Those are the kinds of things that make us want to take a conservative perspective on Q4 versus Q4 last year.

Unidentified Analyst, Analyst

Understood. Any color for 2023?

Bruce Aitken, CFO

No color yet, Fang. Stay tuned. We think the Taiwan market will continue to execute as it is. But as Horace said, what's going to be interesting is how much growth we think we can get from international markets. We're super excited about the pilots that have launched. We're excited about a lot of interest from several different countries. As Taiwan has now eliminated its inbound quarantine, we are seeing lots of interest from people to make trips to Taiwan to personally observe how our network works, personally observe our vehicles, personally ride those vehicles, and then work with us to figure out how to either turn on new countries or turn on new markets or for us to access new customer bases through those visits.

Unidentified Analyst, Analyst

Got it. Just switching gears to your cost side, your gross margin improved pretty nicely. I wonder about any factors we should consider, particularly given the high inflation environment; should we be concerned about potential margin contraction as we head into 2023?

Bruce Aitken, CFO

Cost is definitely going to be a big focus area for us. As Horace mentioned, we've done a reorg. We are really going to focus on cost, on inventory, on inventory turns, and all those kinds of things. We want to make sure the fundamentals of the business are sound as we head into 2023, given your comment about will prices go up, will inflation continue, or what kind of activities will central banks engage in. We are going to be laser-focused on ensuring that we maintain our costs. We've said that we expect Q4's margin profile to be roughly the same as what we've had so far this year. And as you said, there was a little bit of good news in margins in Q3; we'd love to maintain that level, but at a minimum, we will maintain the current run rate for all of Q3 as our margin profile for Q4 this year.

Operator, Operator

Next question comes from the line of Bill Lin of JP Morgan.

Bill Lin, Analyst

I have two questions. Firstly, regarding Taiwan, I've heard that you are ending the all-you-can-ride program for new riders by the end of the year. Considering this, will you discuss ways to increase B2C E-two-wheeler penetration in Taiwan, given that many consumers there are very cost-sensitive? I'd like to know your thoughts on that. Secondly, with our shift towards a B2B focus in the retail sector, will we implement cost controls, and if we reduce the number of stores, will that positively impact our cash flow?

Horace Luke, CEO

We announced that the all-you-can-ride program will be discontinued by the end of the year. Occasionally, we make adjustments to our plans to better serve the majority of our riders. Currently, we observe that only a small number of riders are opting for the all-you-can-ride plan, and many of them work in food delivery services. Right now, we represent about 26% of all quick delivery services operating in Taiwan. Existing riders will continue to have access to the all-you-can-ride program. New riders can subscribe to a high-usage program that is designed to be competitive with the all-you-can-ride offering, which aims to meet their needs. That addresses the first question. What was the second question?

Bruce Aitken, CFO

B2C versus B2B, I can take it.

Horace Luke, CEO

Yes.

Bruce Aitken, CFO

I think, Bill, we are going to focus on B2B, but that's always been part of our plan. It's not that B2B is replacing B2C. It's really there's a great story for B2B, for B2C, for B2G, for kind of B to anybody. So there are fewer selling expenses associated with the B2B business because you don't need to remain as active in retail, but we won't make any changes to our retail footprint. We will still actively pursue B2C customers in Taiwan. We hope to continue to increase the efficiency of that retail market while minimizing the footprint of the retail market, if you will. The cash flow benefits should come from an increased output on a per-store basis rather than any change to our retail or channel structure in the short term.

Horace Luke, CEO

And so just wanted to make sure you’re clear, the B2B and B2C and B2G strategy has always been in place in Taiwan. As I said, we do services 26% of all quick deliveries done every day in Taiwan. In addition, we also worked with several well-known companies such as DHL to electrify their fleet in Taiwan, so you've probably noticed several news stories that have come out regarding two-wheelers and three-wheelers that DHL and other delivery companies are using to run their fleet. So there's always been a B to everybody in Taiwan. As we explore externally into other markets, it is also very important for us to have predictability as we launch. As we said, consider B2B as the base load of these networks, whereas we deploy internationally, Taiwan is a small island; India is a gigantic peninsula. We want to be pragmatic about how we deploy. Once deployed, we want to ensure that riders can use that network actively, generating good returns on our investments. The way we should think about it is, I mentioned in light of our models; they average usually four to five times the average rider. If every kilometer generates a micro-penny on return, the faster you're able to generate that, the faster you're able to turn over the battery and generate financial impact. So going to B2B helps us with both predictability and efficiency as we deploy the network. And also, nothing helps to work out all the kinks like having people ride them. That's one of the things that we want to do as we launch into places like India, where the environment is different, and the usability is different. So it's a great way for us to have a controlled launch into those markets. The Delhi pilot will prove to be a very solid base case for us to build on. We're excited to see riders on it; I received a notification from my team over there two days ago that the first station was built. We are ahead of schedule; we were expecting them to line up in December, but they are already ahead of schedule regarding those stations. Now the vehicles have been registered so they can go on the road and start swapping away.

Bill Lin, Analyst

Can I follow-up on a question? It's more into international markets. I just want to understand what the current partnership situation in India is. I think my original thought is, it's closely specifically Corporate Hero, but the first model launch we use is now with Hero. So what is the company's plan for the India market regarding the cooperating partners?

Horace Luke, CEO

Well, first of all, the partnership with Hero is unchanged. They, of course, are still developing their vehicle. The idea has always been that the platform was always going to be open, and the swapping network was always going to be open; it wasn't designed to house a single brand, but multiple brands. The first vehicle we have not launched in India; the reason why it has not launched is because we have imported vehicles from Taiwan; there's a European version of the Taiwan vehicle that will launch in India in order to pilot. So don't think of it as a vehicle launch or even so to speak, a Gogoro launch, but indeed what it is, is a pilot that we will continue to gather information about the 100 vehicles that will be on the road. So think of it as a usability launch rather than a vehicle launch. Gogoro has always seen ourselves, and our strategy has always been an open platform that has the possibility between multiple brands. Today, we have over 10 brands of vehicles on our platform, swapping over 47 different SKUs of vehicles ranging from very lightweight vehicles to very heavy-duty vehicles, using one battery, two batteries, and four battery configurations, all swapping also with the one million batteries on the network operable. So we're the largest battery swapping network on, I think, on the planet today. We are excited to bring that long-proven platform to places like India. Our pilot in Indonesia has been running well with Gojek Rider in Jakarta, and we are looking to grow that and grow that market as well.

Operator, Operator

There are currently no questions from the phone. I will hand the call back to management. Please continue.

Michael Bowen, ICR

Okay. Thank you. This concludes our question-and-answer session. I'd like to turn the conference back over to Horace and Bruce for any closing remarks.

Horace Luke, CEO

Great. Thanks, Michael. Well, as Bruce said, Q3 was one where the business followed the overall market. We executed to our plan, and our business continued to accumulate subscribers and grow healthy revenue growth due to the unique nature of our business model. There is a lot going on; we're launching new pilots overseas, focused on growth, developing new products, and new vehicles with our existing and new partners. We're excited to continue to take our sustainability technology to the world and help solve one of the biggest challenges facing our generation. Our fundamental belief in our business model and our business thesis remains unchanged. The question is not whether a transition to electric mobility will occur, but how quickly and how can we help? Well, thanks to everyone for attending today's call.

Operator, Operator

That concludes today's conference call. Thank you for participating. You may now disconnect.