Earnings Call Transcript - GGR Q2 2023

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 second quarter 2023 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, investor.gogoro.com. We will also be displaying the materials on the webcast screen as we go. We’re looking forward to sharing our Q2 results, as well as providing guidance on what we’re seeing as the outlook for 2023. But 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, Investor Relations

Thanks, Bruce. I’m sure you’re all looking forward to hearing from Horace and Bruce on behalf of Gogoro. But before that, allow me 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 the 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 Q2, Bruce will go a bit deeper into the Q2 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 second quarter 2023 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 its growth in overseas market; statements related 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 those 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

Thank you for joining our call today. We appreciate the chance to discuss our second quarter 2023 results and future guidance. As we noted last quarter, 2023 began under a tough macroeconomic climate. While there is strong interest in our markets, the economic situation in Taiwan remains weak. We believe our foundational work will drive electric vehicle demand over time, but predicting the exact timing and extent of EV adoption is challenging, given the large number of internal combustion engine vehicles already in use. Factors such as government support, product availability, pricing, infrastructure, and customer willingness will influence each market’s transition to electric vehicles. We anticipate this shift will coincide with increasing awareness of our products and services. Despite some near-term difficulties, we are optimistic about the future of vehicle and infrastructure electrification. We continue to attract significant interest in sustainable two-wheeler transportation globally. Our battery swapping technology and vehicles are being selected for deployment in various countries for both business and consumer uses. While our hardware is essential, our comprehensive software ecosystem, along with network optimization and integrated tools, differentiates Gogoro in the market. We are set to launch in India and the Philippines later this year. In India, we have formed a strategic partnership with Maharashtra to manufacture our scooters and battery systems and to promote battery swapping across the state, backed by substantial subsidies. Maharashtra is at the forefront of India's electrification, and we are thrilled to contribute. Our financial results for the second quarter and the first half of 2023 closely align with projections. We've managed our costs effectively, improving gross margins and adjusted EBITDA during this period. Battery swapping service revenue has grown, and overall revenue increased slightly compared to last year, even though our sales in Taiwan were a bit lower. Since Taiwan accounts for about 95% of our revenue, its sales performance directly affects our overall revenue. To counter this, we are investing in marketing and expanding retail, launching 79 new GoGo Xpress locations with more planned before year-end. We also aim to expand our product lineup with several new vehicle introductions, which we hope will boost revenue in Taiwan and other emerging markets. Vehicle registrations in Taiwan for the first half of 2023 exceeded those of 2022 and 2021, suggesting a potential return to pre-pandemic registration levels of approximately 800,000 units. However, this growth is primarily in lower-cost internal combustion engine vehicles, reflecting consumers’ cautious financial behavior amid the global economic climate. Consumer sentiment in Taiwan is low, hitting a decade low in early 2023, which has hindered electric two-wheeler sales. We believe maintaining our vehicle prices is essential for preserving product quality and customer service, as aggressive price cuts could disrupt our brand. We are committed to achieving solid financial metrics despite strong competition and firmly believe we are well positioned for the transition from internal combustion engines to electric vehicles. Every internal combustion vehicle sold now will likely contribute to carbon emissions over the next decade. Taiwan serves as a replacement market with around 700,000 to 800,000 vehicles replaced annually, so we remain optimistic about converting ICE owners to electric vehicles as we introduce more products for wider market segments. Educating consumers about their role in a cleaner environment is vital. Although electric vehicles may seem to have a higher initial cost, their overall cost of ownership is often lower in the long run, and the health and environmental advantages significantly outweigh concerns from consumers, delivery riders, and fleet operators regarding electrification. While our financial results have been strong so far in 2023, ongoing market uncertainties require us to adopt a conservative outlook for the second half of the year, anticipating seasonality impacts. Due to potential softness in the Taiwan market, we are adjusting our full-year revenue forecast to between $340 million and $370 million. Our plans in India are progressing, though we do not expect substantial revenue there in 2023. We are actively working on several new vehicles set to launch in the coming quarters, targeting both high-performance and affordable segments. This includes developing market-fit products for both Taiwan and other countries, utilizing insights from our pilot projects to inform vehicle designs and launches. We are focused on improving our battery packs, swapping stations, and software capabilities while reducing hardware and operational costs. Expanding internationally is crucial for diversifying our revenue. We are making great strides behind the scenes in India and other markets, including localizing supply chains, increasing our team, and getting positive feedback from our pilots that will shape our market strategies. We have formalized a $1.5 billion investment agreement with the state government of Maharashtra to support the electrification of the state and to implement our battery swapping infrastructure. This project is a landmark investment in India's EV sector and aligns with the state’s strategic goals. Over the past three months, our Swap & Go pilot in India has produced significant results, such as accumulating over 430,000 kilometers traveled and over 8,500 battery swaps, resulting in substantial CO2 reduction. Delivery riders have reported increased efficiency and earnings thanks to our swapping solution. The pilot data indicates our battery packs and stations perform well even under strenuous conditions. We are also finding ways to provide additional energy capacity if utilized faster, reducing consumer costs or supporting second-life applications. We expect to launch locally manufactured vehicles soon, with battery pack production kicking off in late 2023 or early 2024, alongside increasing our workforce in India. Our success there hinges on delivering vehicles and battery systems at competitive prices. By building a local supply chain, we aim to reduce costs significantly, enhancing overall operational efficiency. Climate change demands urgent action, pushing everyone to prioritize sustainability. Gogoro’s core values focus on sustainability and green mobility. In Q2, we progressed towards making smart, swappable energy available everywhere. Gogoro users have collectively cut carbon emissions by over 680 million kilograms. We utilize recyclable materials for our Smart Scooters and have increased renewable energy usage in our operations, aiming for complete renewable energy by 2050. We recently partnered with Japanese designer Naoto Fukasawa and MUJI to create new Smart Scooter designs that promote simplicity and sustainability. This collaboration aims to inspire recycling among consumers. Meanwhile, the Taiwanese government is also committing to sustainable energy, including replacing aged scooters with Gogoro models. We appreciate their support and look forward to extending our partnerships in Taiwan and beyond. Indian states are also moving towards transitioning delivery and tourism fleets to electric vehicles. Now, I’ll hand it over to Bruce for more insights on Taiwan and other international markets along with a financial update.

Bruce Aitken, CFO

Thanks, Horace. As Horace indicated, the Taiwan two-wheeler market has grown in the first half of 2023, but EV volume is slightly down. In Q2, the total number of registered scooters in Taiwan was 186,549, up 13.4% from Q2 of 2022. In the first half of 2023, the total number of registered scooters was 363,747, up 11.6% compared with the first half of 2022. The total number of registered electric scooters in Q2 in Taiwan was 20,118 units, down slightly from 21,195 in Q2 of last year. Of these electric scooters, approximately 16,400 were Gogoro and partner-branded vehicles and 14,118 were Gogoro branded. Despite the overall scooter market in Taiwan witnessing a slight uptrend, the pace of electrification has not mirrored the growth in ICE vehicle sales. This situation is largely driven by ICE competitors aggressively reducing prices to spur growth. Our retail sales strategies are unchanged. We continue to increase our presence via growing our store count from the current 91 to a planned 100 stores by the end of the year, and we believe that the products we have planned for the incoming quarters will improve our competitiveness versus ICE vehicles in the future. In addition, we're targeting 150 Gogoro Quick and service community stores by the end of the year, up from approximately 79 such stores that are already operating with numerous more to follow. We continue to make good progress in other international markets. In the Philippines, together with our partners, the Ayala Group, Globe Telecom, and 917 Ventures, we expect to open a Gogoro Experience Center in the coming months, and our pilot is already up and running. In Korea, to support growth, our partner Bikebank has expanded the battery swapping network to seven additional cities beyond Seoul and currently have over 84 GoStations operational across Korea. Our smart scooters and battery swapping solutions have been used for food deliveries in Seoul since 2019 and have received widespread attention and acceptance. We'll continue to work closely with Bikebank to accelerate the transformation of urban mobility and promote sustainable transportation in Korea. Over the past four months, our pilot program in Singapore has achieved remarkable success, thanks to the support from our partners, Jardine Cycle & Carriage Singapore as well as Foodpanda Singapore. With over 10,000 kilograms of CO2 saved, total distances of over 110,000 kilometers driven, and over 2,700 battery swaps, we're gathering lots of data from our pilot in Singapore. Extending the use of batteries through second life is important. We've deployed smart traffic lights at a number of major intersections in Taipei Q2 in partnership with Far East Tone Telecommunications, one of Taiwan's leading mobile operators. We're excited to work with Far East on this project to address the risk of traffic signal failure due to sudden power outages in the city. Gogoro took the lead in partnering with Far EasTone to develop the smart traffic signal uninterruptible power system at the end of 2021. This system utilizes smart batteries to provide real-time power backup ensuring smooth traffic operations. After successfully testing for over a year in Taipei, Gogoro and Far East have expanded the application and with plans to expand to nearly 200 critical intersections in Taipei by the end of the year, we've created an innovative model for sustainable smart city solutions. And more importantly, we've proven the thesis that there are a great number of second-life opportunities for our batteries. In April, we announced the commercial deployment of Gogoro battery-enabled virtual power plants with NLX. We have currently deployed a total of 967 locations with plans to increase the total to 2,500 swap station cabinets across 1,000 locations by the end of 2023 to serve both demand and frequency response. We've always believed that mobile energy plays a crucial role in facilitating sustainable transformation, not only in transportation, but also across diverse industries seeking to transition from fossil fuels to electric power or those requiring solutions beyond the limitations of fossil fuels. Leveraging the second life of our batteries, we are effectively addressing a wide range of smart city energy demands, generating new revenue streams, and contributing to the advancement of sustainable urban development. In summary, despite some near-term market-driven volume shortfalls in Taiwan, we believe we're on track to deliver real value to customers whether through our Smartscooters or Smart Batteries or second life and ancillary service capabilities. We're working hard to deploy Gogoro battery swapping capability in international markets to broaden our retail footprint and service level in Taiwan and to continue innovating across our entire product portfolio, both in new products and in Second Life opportunities for fully depreciated batteries. To focus specifically on financial highlights for Q2 of 2023, we continue to see healthy increases in our Gogoro battery swapping revenue, and our performance against our key financial metrics for the first half of 2023 was solid. We saw a drop in our Taiwan-generated vehicle revenue this quarter, but our international expansion continues to demonstrate solid progress that we anticipate will turn into revenue by the end of 2023 and into the future. We expect to continue our investment in research and development, network infrastructure, and international production capacity into 2024 to lay the foundation for our international expansion. For the second quarter of 2023, operating revenue was $87.2 million, down 3.8% year-over-year and up 0.2% year-over-year on a constant currency basis. Had foreign exchange rates remained constant with the average rate of the same quarter last year, revenue would have been up by an additional $3.7 million. Sales of hardware and other revenue for the quarter were $53.9 million, down 10.6% year over year, and down 6.8% year-over-year on a constant currency basis. For the entire powered two-wheeler market, sales in Taiwan in the second quarter were up 13.4% year-over-year, returning to roughly pre-pandemic levels, likely due to deferred purchasing. Sales of electric power two-wheel vehicles have not mirrored this growth. Sales were down 5.1% compared to the same quarter last year. Much of the growth in the power two-wheel market was driven by a very few specific internal combustion engine models that continue to appeal to price-sensitive consumers at the expense of competing ICE and electric vehicles. Gogoro vehicle sales volume decreased by 8.1% compared to the same quarter last year, largely driven by Taiwan's consumer confidence index being at a 10-year low at the beginning of 2023, and that typically translates into conservative purchase decisions when customers are refreshing their vehicles. This makes our second-half financial outlook difficult to predict. We view the second half conservatively, and we expect our performance in the second half of 2023 to track historical seasonality. Battery swapping service revenue for the second quarter was $33.3 million, up 9.6% year-over-year and up 14.2% year-over-year on a constant currency basis. Total subscribers at the end of the second quarter exceeded 552,000, up 14% from 484,000 subscribers at the end of the same quarter last year. This year-over-year increase in battery swapping service revenue was primarily due to our larger subscriber base compared to the same quarter last year and also attributable to the high retention rate of our subscribers. We continue to see the strength of our subscription-based business model to accrue more customers to maximize our battery swapping network efficiency. For the second quarter, gross margin was 15.2%, up from 14% in the same quarter last year, and non-IFRS gross margin was 16%, up from 15.5% in the same quarter last year. The gross margin and non-IFRS gross margin increases were driven by the improved cost efficiencies of Gogoro's battery swapping service operations and an increase in the average revenue per energy subscriber due to a combination of new subscription programs and longer riding distances post-pandemic. These increases were partially offset by the higher production cost per vehicle as a result of lower volumes and promotion expenditures on scooter sales this year, while some of the adverse impacts were mitigated by our favorable product portfolios. For the second quarter, the net loss was $5.6 million, down from $111.5 million from $121.1 million in the same quarter last year. This decrease in net loss was primarily due to $178.8 million decrease in listing expenses and a $24.4 million decrease in operating expenses, primarily consisting of an $18.5 million decrease in acquisition-related expenses, a $3.2 million decrease in share-based compensation, and our tight control on expenses, savings of $2.3 million in expenses for sales and marketing programs and $1.5 million in general and administrative expenses. These decreases were partially offset by an unfavorable change in the fair market value of financial liabilities of $88.5 million. For the second quarter, adjusted EBITDA was $12.9 million, up from $9.3 million in the same quarter last year. The increase was primarily due to a $2.3 million decrease in expenses for sales and marketing programs, as we implemented more efficient marketing campaigns and a $1.5 million decrease in general and administrative expenses, mainly as a result of cost savings initiatives. The increase was partially offset by a $1.1 million increase in research and development expenses for the development of new products and our international expansion. We reduced operating cash flow by $41 million compared to the same quarter last year, through tightening our business operations and reduced working capital. We borrowed $22.7 million and paid back $14.3 million in bank loans in the second quarter to finance our investing activities. With a $144 million cash balance at the end of the second quarter and additional credit facilities, we believe we have sufficient sources of funding to meet our near-term business growth objectives. Due to the soft demand in the Taiwan market and to reflect our current market outlook and the timing of the realization of our international projects, we are updating our 2023 revenue guidance to revenue of $340 million to $370 million. We estimate that we will generate approximately 95% of our 2023 full year revenue from the Taiwan market. With that financial update, I will hand things back over to Michael for Q&A.

Michael Bowen, Investor Relations

Thanks, Horace and Bruce for the business update, details on financial results, and forward guidance. As attendees are formulating your questions, I will ask three questions, which I think are likely on everyone's minds, given what you've just shared. With that said, question number one. You've updated your guidance for the full year. Can you shed a bit more light on why and what leads you to have confidence that you will meet your revised guidance for 2023? And what are your preliminary thoughts for 2024?

Horace Luke, CEO

Thanks, Michael. Well, to be clear, we're really bullish on the global transition from EV from traditional ICE vehicles. Individual markets, we transition at various times and speeds based on a number of different factors: government policy, consumer awareness of environmental issues, cost of vehicle and energy, etc. We believe that in that transition, battery swapping will emerge as the best technology in terms of speed and convenience of swapping as well as the standpoint of helping power grids, which are increasingly pressed to manage and support the transition. We have clearly seen this in Taiwan and also through our pilots overseas. In any given quarter of the year, there will be external factors, which will impact that transition. In Taiwan at the moment, a mix of macroeconomic factors and aggressive pricing by ICE vehicle makers is creating some short-term headwinds for Gogoro. We don't believe we've maxed out on Taiwan's vehicle sales, but we did experience a slight drop in the unit sales in the first half. We have a lineup of vehicles we expect to launch this year and early next year that we believe will really help. As far as meeting our updated guidance, we're working hard to grow our retail footprint and our customer touchpoints. We're expecting a normal seasonal uptick in sales in the second half, and we have vehicle launches planned. These factors combined make us confident we will hit these new targets. 95% of revenue is expected to be from Taiwan, but we should also start seeing more revenue from international markets in the second half as compared to last year.

Michael Bowen, Investor Relations

Okay. Thank you. We'll move on to question number two. So, you talked about new vehicle launches in the second half and about ongoing improvements in your batteries and stations. Can you share a bit more detail? Will these vehicles and improved battery swapping technology be deployed in India and other places in addition to Taiwan? Thanks.

Horace Luke, CEO

Sure. India is a critical market for us and getting products, partners, and pricing right for India is really, really important. We're fully committed to India. We're localizing our supply chain and preparing for local manufacturing, both of which will create substantial cost reduction opportunities and qualify for Indian subsidies. We're always working to improve our battery and station technology. Safety and quality are always first on our mind. The cost, capacity, and other factors matter a lot as well. We have a number of product improvements we'll be introducing over the coming months. When we develop vehicles, we design for global markets. But at times, we need to localize for the local market to meet pricing expectations, regulatory requirements, or other factors. The vehicles that we have slated for launch cater to the needs of a broad range of customers. We have vehicles that will satisfy customer concerns about affordability, we have vehicles that will appeal to early adopters of technology, and also we have vehicles aimed at B2B and B2C customers as well.

Michael Bowen, Investor Relations

Okay. Thank you. Next question is despite a drop in hardware revenue, you mentioned you have met a number of other financial metrics. What metrics are you tracking? And what are your expectations for the second half for margin, EBITDA, and other metrics that you can share?

Bruce Aitken, CFO

Thanks, Michael. There are always external factors that are difficult for us to control. But what we're trying to focus on is the internal cost structure, which we have control over. So, we're continuing to invest for international expansion. But despite doing that, we're really focused on cost savings opportunities. We're keeping marketing costs per vehicle flat. We're tightly controlling OpEx, we're generating healthy EBITDA, and we're tracking the healthy growth in battery swapping service revenue. We haven't provided specific EBITDA or margin targets for the second half. We're really focused on establishing solid financial discipline and a solid foundation such that both in Taiwan and as we begin our international expansion, we can continue on that solid financial grounding.

Horace Luke, CEO

All right. Thank you, Bruce. Operator, at this point, let's go ahead and open up the line for the Q&A session. Thank you.

Angelina Chen, Analyst

Hello. Thank you, Horace and Bruce. I'm Angelina from JPMorgan, and I'm filling in for Bill. Can you hear me?

Horace Luke, CEO

Yes, we can hear you, Angelina.

Angelina Chen, Analyst

Great. So just two questions from us. First of all, when does the company expect to be operating profit profitable? And the second one is regarding international revenue exposure. What percentage of the revenue do you expect from overseas business in 2024 and beyond? Thank you.

Horace Luke, CEO

I'll take the second part first, Angelina. As you know, we're saying that, this year we're expecting 95% of our revenue to be from Taiwan-based. That leaves a small balance to come from international markets. We will be launching vehicles. We will be launching services in multiple markets in the second half of this year. So we do expect the 2024 percentage to increase pretty substantially. We're not giving out targets on that quite yet. I guess, I can say stay tuned for the November call where we'll try to provide some guidance on 2024. But we do expect substantial growth, specifically from India, but potentially from other markets as well. In terms of operating profit, again, as mentioned to Michael's question just a minute ago, our goal is really to set ourselves up for a tight financial structure in Taiwan as we think about the future. All of our R&D costs are borne in Taiwan. All of our corporate overhead is borne in Taiwan. So when we add international business, it comes with very low overhead and should contribute to our being able to meet our operating profit goals more quickly.

Angelina Chen, Analyst

Thank you. Thank you.

Michael Bowen, Investor Relations

All right, operator. In the meantime, this is Michael Bowen again from ICR. We do have a write-in question from Daniel at UBS. I'll start with the first one. There is a second one. But the first one is, could you please give us some color on the competitive landscape of electric two-wheelers in India and what are Gogoro's strengths and weaknesses compared with the other brands?

Horace Luke, CEO

Great, thanks. I'll take that question, Michael. So, as we look at the landscape in India, one of the first things we saw was that it was clearly a play for a more sophisticated, proven, high-powered battery swapping technology to really help service at the very beginning the B2B segment. There's a lot of vehicles today that are very, very low power with batteries that are what we call swap-outable instead of really swappable. They would have lots of cables that actually connect with different connectors where a user would have to remove certain pieces of the vehicle in order to swap out the battery to really mimic a swap-out experience. For us, with Gogoro, we've been really focused on the swapping experience since we founded the company. And that means being able to do it in just seconds, which has really blown away most of the people that have actually ridden and touched and swapped the battery during our pilot. I think there's a huge opportunity for us when it comes to providing proper two-wheelers that are powerful, durable, and very usable and cost-effective in that market. So I think that as we look around, there really aren't too many direct comparisons, so to speak. But as we look at dollar for every kilometer, we certainly see that we have a great opportunity ahead of us.

Michael Bowen, Investor Relations

All right. Thanks, Horace. And the second question from Daniel at UBS is as the network expansion might need significant CapEx. How does Gogoro convince local partners in the overseas markets to make such a move?

Horace Luke, CEO

Great question. In Taiwan, one of the key reasons for us to invest in capital expenditures is that we were an early mover, and we needed to demonstrate the technology and show that we could retain subscribers on our network who are paying for these batteries over time. We've managed to achieve that successfully. Another factor in our decision to invest in Taiwan is that, similar to Japan and other parts of Northeast Asia, interest rates and the cost of debt capital are quite low. This opportunity allowed us to leverage capital and create additional value for the company, which we discussed extensively. However, when considering expansion in overseas markets like India, which sells significantly more vehicles annually than Taiwan, or in larger Southeast Asian markets, investing all of that capital ourselves would be impractical and costly. That's why we are collaborating with various partners, allowing them to contribute capital to help deploy the network. While I can't go into specific details about our approach, the goal is for Gogoro to grow in these markets without depending solely on our own funds, fostering a mutually beneficial arrangement with our partners.

Michael Bowen, Investor Relations

Operator, do we have any teed up? We have another online question, if not? Okay. We have another online question. So the question is, could Gogoro sell batteries and energy storage solutions directly to customers and businesses around the world in the same way Tesla has their energy storage products like Powerwall and Powerpack? Europe and the US are huge markets for battery energy storage. So, could you elaborate on that? Thank you.

Horace Luke, CEO

Our main focus since starting the company has been to advance sustainability and integrate every technology and product towards that goal. Taking Taiwan as an example, the main application for the batteries is mobility, allowing users to travel from one location to another primarily in vehicles. Additionally, while the batteries are not in use, there is significant potential for them to collaborate with the grid by providing services like demand response or frequency response, which can be considered a supplementary business in this scenario. Regarding our batteries, there is still considerable lifespan remaining after their use for mobility. For instance, a battery pack must maintain a certain state of health to effectively support a family in a challenging terrain without experiencing voltage drops. We observe that these batteries still have ample cycles and lifespan left. We are currently developing various solutions to enable the use of these battery packs for uninterruptible power supplies (UPS) or backup solutions as well as storage solutions. I don't have many specifics to share at the moment, but we're focusing on this technology since the batteries in active service have a lot of life remaining. Since launching our platform, we have not retired many battery packs from our network, and it will take several more years before we see significant volumes in retirement. However, we are preparing for that eventuality. As for whether we can manufacture battery packs and develop storage solutions to sell directly, I believe there is always potential for various technologies to contribute to sustainability. We are one of the largest consumers of battery cells in our sector due to our extensive deployments, having more than a million battery packs currently in circulation. We will continue our efforts to produce these battery packs and facilitate their usage in different regions around the globe.

Michael Bowen, Investor Relations

Thank you. I see there are no current questions in the queue. I'll hand it back to you, Michael. Thank you, operator. At this time, I will hand the conference back over to Horace for a few closing remarks. Horace?

Horace Luke, CEO

Great. Thanks, Michael. If I could leave you guys with three simple takeaways, they would be: Number one, we continue to work tirelessly to open the Indian market. I'm proud of the work that the team on the ground has put in, and we're on the verge of great things in India. We're thankful for the support of the Maharashtra government. The program they created for us and the amount of support they have offered financially is truly a program, the first of its kind in India. I think that will really help us achieve a successful launch in India overall, not just in the state of Maharashtra but overall in India. The second point I want you guys to take away is that the Taiwan EV market and our sticky subscriber base will continue to grow, and the trend to electrification will continue both in Taiwan and in other countries. We're pleased to work with the government in both Taiwan and India to assist in this transition. Number three, product and technology improvements and upgrades are important, and localizing manufacturing will also help reduce costs. Our technology and platform ecosystem remains best in class, and we look forward to making that ecosystem available more broadly as we expand internationally. Thanks for calling in, and thanks for supporting Gogoro as we seek to make smart, swappable energy available to every urban rider in the world. Thank you, everyone.

Michael Bowen, Investor Relations

The conference has now concluded. Thank you for attending today's call. You may now disconnect.