Hello everyone. Thank you for joining the Third Quarter 2025 Earnings Conference Call for XPeng Inc. This call is being recorded. I will now hand it over to your host, Mr. Alex Xie, Head of Investor Relations and Capital Markets at the company. Please proceed, Alex.

Thank you. Hello, everyone, and welcome to XPeng's Third Quarter 2025 Earnings Conference Call. Our financial and operating results were issued by Newswire services earlier today and are available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiaopeng.com. Participants on today's call from the management team will include Co-Founder, Chairman, and CEO, Mr. He Xiaopeng; Vice Chairman and President, Dr. Brian Gu; Vice President of Corporate Finance and VW Projects, Mr. Charles Zhang; Vice President of Finance and Accounting, Mr. James Wu; and myself. Management will begin with prepared remarks, and the call will conclude with a Q&A session. A webcast replay of this conference call will be available on the IR section of our website. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please also note that XPeng's earnings press release and this conference call include the disclosure of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. XPeng's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. I will now turn the call over to our Co-Founder, Chairman, and CEO, Mr. He Xiaopeng. Please go ahead.

Hello, everyone. In the third quarter of 2025, XPeng achieved record sales and impressive results across key operational metrics, setting new highs in deliveries, revenue, gross margin, and cash reserves. We delivered a total of 116,007 vehicles during the quarter, reflecting a 149% increase compared to the same period last year. The newly launched XPeng P7 quickly became one of the top three battery electric vehicle sedans in the RMB 200,000 to RMB 300,000 range, helping monthly deliveries surpass 40,000 units starting in September. Additionally, our gross margin exceeded 20% for the first time in Q3, and we further reduced our net loss. Our aim is to achieve breakeven in the fourth quarter. These ongoing improvements in operations are reinforcing our commitment to the development of physical AI research and development, supporting our goals for mass production of the VLA 2.0 model, Robotaxi, and humanoid robots by 2026. As AI technologies evolve and integrate more with real-world data, machines are gradually gaining the ability to engage, communicate, transform, and innovate within our physical surroundings, fundamentally changing the landscape of mobility and everyday life. For the past 11 years, XPeng has focused on creating in-house full-stack technologies, transitioning from software-defined vehicles to the dynamic domain of physical AI. We recognize that vehicles and humanoid robots, the two primary applications of physical AI, share a common physical world model, systems on chips, and infrastructure, promoting rapid development and enhancement. We're excited to see new capabilities emerging from our physical AI technology stack. Over the next ten years, I aim to position XPeng as a leader in embodied intelligence. Concentrating on physical AI applications, we're developing a broad range of technologies, products, and a supportive business ecosystem. In addition to offering AI-powered vehicles to customers globally, we aim to roll out mass-produced Robotaxis extensively and achieve the mass production of humanoid robots. We believe that fostering an open and vibrant ecosystem is essential for unlocking the full potential of physical AI for humanity. To facilitate this, we plan to open-source our physical world model, partner with mobility platforms to launch Robotaxi services, and release our humanoid robot software development kit. This strategy will enhance the physical AI application ecosystem through collaborations with business and technology partners and expedite the process of creating value. I am also pleased to share that as we launch our one vehicle, dual energy product cycle for AI vehicles, we will expand our scale and increase our market share in new energy vehicles by diversifying our product offerings. On November 6, we initiated presales for the XPeng X9 Super Extended-Range EV, which leads the industry in extended-range vehicles, featuring a high-capacity LFP battery with a 5C charge rate and a total range of up to 1,602 kilometers. It is the first large 7-seater vehicle to offer the longest range, highest AI computing power, smallest turning radius, and the most efficient space utilization in its category. We view super extended-range EVs as critical for speeding up the transition from internal combustion engine vehicles to new energy vehicles. Since the start of presales for the X9 Super EREV, we have witnessed unprecedented demand, particularly in northern regions and inland cities of China, appealing to many customers who had been hesitant to switch to battery electric vehicles. To date, preorders for this model are nearly three times greater than the presales for the previous X9. The X9 Super EREV will officially launch on November 20, with deliveries commencing immediately afterward, and I expect we will achieve a new delivery record in December. We plan to introduce three super extended-range products in the first quarter of 2026, which will address key challenges faced by our EREV users by providing extended pure electric range and faster 5C supercharging, thereby capturing a greater share of the EREV market. We have increased our R&D spending in 2025. Consequently, in 2026, we will introduce four new one vehicle, dual energy models, including our first product in key market segments. These groundbreaking products will help establish our presence in these segments and develop leading models such as the MONA M03. I am confident that the seven one vehicle, dual energy models with super extended-range technology set to debut next year will significantly expand our total addressable market and create substantial growth opportunities for sales. On the global side, we have sustained strong sales growth and laid a solid groundwork for long-term expansion through our localized strategy. In September 2025, we achieved over 5,000 monthly overseas deliveries for the first time, representing a 79% year-over-year increase. During the third quarter, we expanded our global presence by opening 56 new stores overseas, enhancing our sales and service network to 52 countries and regions. Furthermore, our first European localized production facility at the Magna plant in Graz, Austria, has officially begun operations, with the initial batches of XPeng G6 and G9 being produced. At the same time, XPeng's R&D center in Munich, Germany, has started operating, which will help us better understand international customer needs and accelerate our technological advancements and product introductions. In 2026, we plan to launch three new overseas models, including popular mid- to small-sized SUVs that cater to the varied tastes of global consumers. Our strong focus on investing in large AI models, computing infrastructure, and data sets is yielding advanced capabilities from our physical world model. Our forthcoming VLA 2.0 model, featuring ten times more parameters than previous versions, will significantly improve safety and user experience in intelligent driving. Based on my recent driving experience in complex road conditions, I was impressed by the exceptional driving experience provided by the intelligent VLA model. Therefore, starting in late December, we will begin a co-creation program with our early adopters. In the first quarter of 2026, we plan to deploy the VLA 2.0 model across our entire Ultra lineup. I view the mass production of VLA 2.0 as a pivotal advancement in physical AI models, delivering a significant improvement in user experience and encouraging more individuals to choose XPeng for its leading intelligent driving technology. Moving forward, XPeng will open-source its VLA 2.0 model to global commercial partners, with the goal of delivering an industry-leading advanced driver assistance experience to a broader audience. Volkswagen will be the first to launch the VLA 2.0 model. Additionally, XPeng's Turing AI system on chip has received formal sourcing approval from Volkswagen, with co-developed vehicles expected to begin mass production early next year. Revenue generated from licensing our technology to external partners will be reinvested into our R&D efforts, primarily supporting the iterations and upgrades of the Turing SoC and VLA models. This creates a favorable cycle of innovation and commercialization. We encourage other automakers and tier one manufacturers to collaborate with us on the Turing SoC and VLA 2.0, working together to advance the adoption of intelligent technologies in both Chinese and global markets. Traditionally, end-to-end models could only achieve advanced Level 2 autonomy at best; however, the introduction of the physical world model is accelerating the timeline for true autonomous driving. I am convinced that only pre-installed mass-produced Robotaxis with robust generalization capabilities can achieve widespread acceptance and develop a sustainable business model. In 2026, XPeng aims to launch three Robotaxi models. Our technology stack for Robotaxi does not rely on high-definition maps or LiDAR. This approach enables us to effectively tackle current industry challenges, including high expenses, operational constraints, and limited generalization, facilitating efficient and scalable deployment globally. We plan to initiate pilot operations of XPeng Robotaxi in China in 2026, continuously enhancing both the software and hardware of Robotaxi while establishing an operational ecosystem. I believe that a collaborative ecosystem where all industry players can benefit is essential for rapid scaling. Therefore, we plan to open our software development kit to our partners, with Amap as our first ecosystem collaborator for XPeng Robotaxi. We invite additional mobility companies to explore partnership opportunities for Robotaxi with us. Our humanoid robots follow a technology roadmap influenced by the physical world model. Supported by our vehicle and powertrain R&D teams, we unveiled our next-generation IRON robot at the latest XPeng Tech Day. The IRON’s human-like posture and nimble movements impressed many XPeng enthusiasts, underscoring the significant commercial potential of humanoid robots. Currently, IRON showcases only a limited portion of its capabilities. By the second quarter of 2026, we aim to achieve complete capability integration through cross-domain innovation, targeting performance and user experience that far exceed current market standards. Our goal is to commence mass production of advanced humanoid robots by the end of 2026. Once in production, IRON will initially be deployed in commercial applications, providing services such as tour guiding, retail support, and patrol activities. By the end of next year, I expect IRON to be serving alongside us at XPeng locations, campuses, and factories as part of our team. Additionally, XPeng Robotics will open its software development kit to global developers, inviting partners from various sectors to collaborate on secondary developments. This will enable IRON to be trained in and evolve within diverse real-world scenarios, unlocking broader application opportunities. Looking ahead, I believe the market potential for humanoid robots will outpace that of automobiles. As a new generation of robots reaches a pivotal transformation point, similar to what we saw with electrification in China’s EV industry, we expect rapid growth ahead. I project that by 2030, XPeng robots could sell over 1 million units annually. With the launch of our one vehicle, dual energy product cycle, I anticipate total deliveries in the fourth quarter to range between 125,000 and 132,000 units, representing year-over-year growth of 36.6% to 44.3%. We expect fourth-quarter revenue to be approximately between RMB 21.5 billion and RMB 23 billion, reflecting an increase of 33.5% to 42.8% from the previous year. XPeng's AI-centric vehicle business is in the early phases of rapid growth in both scale and market share, while our Robotaxi and humanoid robot initiatives are advancing swiftly toward mass production. I am confident that XPeng will emerge as a leader in physical AI, both in China and on the global stage, providing enhanced value for our customers and shareholders. Thank you, everyone. Now, I will turn the call over to our Vice President of Finance, Mr. James, to discuss our financial performance for the third quarter of 2025.

Thank you, Xiaopeng. Now let me provide a brief overview of our financial results for the third quarter of 2025. I'll reference RMB only in my discussion today, unless otherwise stated. Our total revenues were RMB 20.38 billion for the third quarter of 2025, an increase of 101.8% year-over-year and an increase of 11.5% quarter-over-quarter. Revenues from vehicle sales were RMB 18.05 billion for the third quarter of 2025, an increase of 105.3% year-over-year and an increase of 6.9% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were mainly attributable to higher deliveries from newly launched vehicle models. Revenues from services and others were RMB 2.33 billion for the third quarter of 2025, representing an increase of 78.1% year-over-year and an increase of 67.3% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were primarily attributable to the increased revenues from after-sales services and technical R&D services rendered to the Volkswagen Group due to the successful achievement of certain key milestones in the current quarter. Gross margin was 20.1% for the third quarter of 2025, compared with 15.3% for the same period of 2024 and 17.3% for the second quarter of 2025. Vehicle margin was 13.1% for the third quarter of 2025, compared with 8.6% for the same period of 2024 and 14.3% for the second quarter of 2025. The year-over-year increase was primarily attributable to ongoing cost reduction, while the quarter-over-quarter decrease was due to targeted promotion to clear outgoing inventory during product transition. R&D expenses were RMB 2.43 billion for the third quarter of 2025, representing an increase of 48.7% year-over-year and an increase of 10.1% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were mainly due to higher expenses related to the development of new vehicle models and technologies, as the company expanded its product portfolio to support future growth. SG&A expenses were RMB 2.49 billion for the third quarter of 2025, representing an increase of 52.6% year-over-year and an increase of 15% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were primarily due to higher commission to the franchised stores, driven by higher sales volume as well as higher marketing and advertising expenses. As a result of the foregoing, loss from operations was RMB 0.75 billion for the third quarter of 2025, compared with RMB 1.85 billion year-over-year and RMB 0.93 billion quarter-over-quarter. Net loss was RMB 0.38 billion for the third quarter of 2025, compared with RMB 1.81 billion year-over-year and RMB 0.48 billion quarter-over-quarter. As of September 30, 2025, our company had cash and cash equivalents, restricted cash, short-term investments, and time deposits in total of RMB 48.33 billion. To be mindful of the length of the earnings call, I encourage listeners to refer to our earnings press release for more details on our third quarter 2025 financial results. This concludes our prepared remarks. We'll now open the call to questions. Operator, please go ahead.

For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. The first question today comes from Tim Hsiao with Morgan Stanley.

My first question is about physical AI. In the past, other companies' competitive advantages have been reflected in areas like cost, brand, and channels. I would like to know if the management could provide more details on XPeng's long-term competitive advantage in physical AI and how the company plans to continuously strengthen its position in these areas. That's my first question.

I think this is certainly an important topic. The traditional approach for automakers to generate profit is vastly different from the new business model driven by physical AI. These come from distinct backgrounds. Historically, established automakers have concentrated on their own positioning and target user segments, relying heavily on their integration with Tier 1 suppliers and various components of the supply chain. However, for a physical AI-generated model, the approach changes significantly. It revolves around defining future technology, which encompasses full-stack capability and custom integration. The launch of our IRON robot illustrates this point well. This divergence in background will lead to different products and growth trajectories. I believe cars will become a new form of robotics, which we can expect to see materialize in the next 5 to 10 years as the next evolution of robotics in our daily lives. Traditionally, supply chain integration has looked very different from our focus now on physical AI technology that spans multiple domains and includes upgrades in software, hardware, and infrastructure, resulting in an entirely new range of products. In the past, software constituted only a minor component of traditional vehicle development, whereas now it represents a significant portion of new product development. I anticipate that as we look towards our future innovations, we will increasingly incorporate physical AI elements in car development, likely exceeding 50%, and this will happen quite soon. Thank you.

My second question is about revenue from the collaboration with Volkswagen. Congratulations on the project wins of Turing chips at Volkswagen. Can you tell me from which quarters the related revenue will start to be recognized and how we should view the revenue contribution trend from this collaboration in the December quarter and for the full year 2026? That's my second question.

Tim, this is Charles. So in Q3, we delivered a few key development milestones on time. So you probably have seen that the revenue from the technology collaboration increased significantly quarter-over-quarter. And we continue to see that there are a few key development milestones to be delivered in Q4. So we believe that the revenue from technical collaboration in Q4 will be expected at a comparable level we see in Q3 2025. And then regarding your question on the Turing SoC. Yes, our Turing SoC was selected by Volkswagen for the two B-class vehicles we're jointly developing. We have already started to supply the Turing SoC to some of our partners, the preproduction and verification vehicles. Therefore, the revenue will start to be recognized in Q4 and probably in a small amount. However, as our jointly developed vehicle SOP from early next year, we expect the revenue from the Turing SoC will ramp up with the sales volume of the two vehicles we jointly developed. In terms of the revenue from the technical collaboration in 2026, we expect that as long as we can deliver the key milestones that are scheduled in 2026, we would expect that the revenue from the technical collaboration for the full year 2026 would be comparable to that of the revenue we recognized in 2025. Looking back, we have demonstrated that we can deliver the revenue from commercialization of our technology for seven consecutive quarters. We believe that there are still opportunities we would like to explore to commercialize our technology, and as our CEO, Xiaopeng, mentioned, we will reinvest such revenue from the licensing or technical collaboration back into our R&D. Thank you, Tim.

Next question comes from Nick Lai with JPMorgan.

My first question is actually two questions related to our humanoid robot strategy and long-term ambitions. At a recent Technology Day, XPeng showcased our first humanoid robot, IRON, which operates similarly to humans. Can you discuss our technology roadmap and how it compares to our peers? Additionally, what is our competitive advantage against these peers in the medium and long term? That's my first question.

Thank you. Given the number of robotics companies in the market, I can honestly say that XPeng's technological and product development roadmap for robotics is progressing as we anticipated, in line with our plan. We haven't focused much on the differences within the robotics industry before launching our products. Now, looking at XPeng, our product philosophy is quite theoretical and very human-like. This is the aim of creating our humanoid robot. An interesting aspect of our product is that when we added muscles and realistic skin to our robots, many people were willing to hug them. This is exciting, as traditional robots have not been appealing enough for people to do the same. Moreover, I believe that in the future, we will see robots increasingly working alongside us in various fields. The current generation of XPeng robots is our seventh, and we are starting mass production of the eighth generation of our humanoid robots. Many existing robotics in the market are between generations 3 and 5, primarily driven by joints and mechanical operations. When examining the hardware and software operations, you notice that many products in the market are similar in their movement. I think such robots face significant challenges in commercialization. Our future robots will focus on the technological pathways we should pursue, utilizing a fully integrated hardware and software approach powered by AI. The robot we showcased is a result of our comprehensive R&D capabilities and cross-domain integration. XPeng Motors has numerous advantages in developing robotics and humanoid robots. For instance, our AI resources have a synergistic effect with our AI cars, and we are considering producing robots with performance that exceeds typical automotive standards. Additionally, our approach to business and mass production of humanoid robots is heavily influenced by our experience and knowledge in the electric vehicle industry. For instance, in establishing our sales and marketing strategy and globalization efforts, there are many benefits we can gain from our existing car sales framework. I foresee that some players in robotics will emerge from the automotive sector, and I am confident that XPeng will maintain a first-mover advantage due to our data, system-on-chips, and overall capabilities. Thank you.

My second question is also about the long-term strategy and operations of humanoid robots. What are the key milestones we should focus on as we head towards commercialization? Additionally, can you provide an overview of the expected capacity and scale of our humanoid robot operations by the end of 2026? You mentioned a target of delivering 1 million units by 2030; could you elaborate on the use cases for these robots in the long term?

Thank you. To be honest, mass production of the IRON is probably the most challenging vehicle or product I've encountered at XPeng Motors when comparing it to other cars, as there are still many difficulties to address. Our ultimate aim is for it to be easily trained to understand human language so it can assist us in various ways, and there’s significant room for improvement in capability integration. For instance, if the robot can walk or run safely, it requires extensive integration of capabilities, including managing joints and coupling different wiring. Additionally, to enable more dexterous hand movements, we will need a lot of hand-based VLA, which we anticipate will be integrated by early next year. Communication capability between the robot and humans is also essential, relying on VLM and VLT, which represent small and large brain modeling capabilities. I am excited to announce that we will enter the 1.0 stage of our new generation of mass-produced models next month. I believe that in the next 10 months, we can promote the robot's development in an orderly fashion during mass production. The increase in robot production capacity is much simpler than for cars, yet commercialization of robots is indeed quite challenging and requires us to elevate our technological capabilities to achieve more. We aim to implement various commercial scenarios, such as tour guiding and retail assistance. By 2026, we hope to see many of our robots operating at XPeng stores and campuses for initial field testing. We are also opening our SDK to more partners, enabling them to easily purchase and train our robots for commercialization. If you're inquiring about future application possibilities, they may exceed expectations. For commercial robots, they might be adaptable for industrial production scenarios. Regarding household settings, we believe there’s a good chance we could achieve that in about five years. By opening our SDK, we hope to empower more partners to address diverse and long-tail application scenarios, allowing us all to enjoy a better robotic future and foster a more robust ecosystem. Thank you.

The next question comes from Ming from Bank of America.

Why does XPeng plan to launch its Robotaxi service in 2026? Can you discuss your technology inflection point or the speed at which you plan to reduce costs? Additionally, how does XPeng's technology path or business model compare to other Robotaxi companies in China? What are your competitive advantages?

Thank you, Ming, for your question. I believe our R&D strategy focuses on two main areas: full-stack self-development and cross-domain integration. By 2026, we anticipate significant advancements in our development system. For instance, we plan to deploy our current models as part of Robotaxi fleets, coinciding with the expected inflection point. Our VRM models will continue to enhance the robotic features of our future vehicles. Moreover, our second-generation VLA will help train our intelligent driving Ultra cars and may also support the training of our mass-market vehicles using similar large models. This cross-domain capability, rooted in our robotic development, aims to address existing limitations in Robotaxi, such as high production costs and restricted mobility options. Current Robotaxis struggle with complex roads and unpredictable residential scenarios, often relying on LiDAR for their perception capabilities. By 2026, we aspire to commercialize a fully shared Level 4 capability in our Robotaxi, which will allow us to develop both a driverless Level 4 model and an assisted driving Level 4 model simultaneously. I believe that with the introduction of these strategies, XPeng will demonstrate superior commercial logic compared to other Robotaxi companies, providing us with a significant competitive edge. Thank you.

So how does the management team view the commercialization of your Robotaxi business? Specifically, what milestones are planned for the future, such as the number of vehicles in your fleet or the timeline for expansion into different cities or international markets? Additionally, you currently have a partnership with Gaode, Amap; could you provide more details about this collaboration? Furthermore, do you intend to partner with smaller entities like other ride-hailing companies in the future?

Thank you. Next year, XPeng will introduce three different types of Robotaxi models at various price points to meet diverse mobility needs. In the next phase of development, pending regulatory approval, our focus will be on ensuring that technology, operations, and the business model run seamlessly. In this context, we aim to collaborate with more partners in the ecosystem. For instance, Amap will be an excellent ally, providing us with enhanced support for traffic management, payments, operations, and services. This distinguishes us from many other autonomous driving manufacturers. I believe that, in the future, we will establish more partnerships with various service providers tailored to different countries, regions, and stages of development. For XPeng, it is essential to solidify our toolkit and enhance our interface capabilities, allowing us to collaborate effectively with ecosystem partners in different countries and cities. Once we achieve commercial operation across various environments, we will be able to swiftly develop our ecosystem. This is one of our strategic considerations. Thank you.

The next question comes from Tina Hou with Goldman Sachs.

Let me translate my first question. First, I would like to understand, over the next 1 to 3 years, do we have a rough revenue estimate or breakdown for our new businesses, including Robotaxi, humanoid robot as well as eVTOL?

Tina, it's Brian. First of all, I would say that for these future development areas, we do not provide any numerical guidance at the moment. Clearly, in all those three areas, we anticipate volume, scale-level production, and operations in the next 12 months. For example, the Land Aircraft Carrier from our flying car company is aimed to be delivered to end customers before the end of next year in volume, also scale, which I would say will be in the thousands range. For the other two, for example, the humanoid robot as well as the autonomous driving Robotaxi, as we just discussed earlier, next year will be a year to see a lot of operational testing and scaling up processes to make them ready for large quantity production and use. I would say the contribution from next year will probably be limited. However, I believe the volume will ramp up rapidly once the model and stability of these products are proven in the consumer and application ends. The long-term goal of having 1 million humanoid robots sold annually by 2030 is our long-term goal. We have good confidence in this as we see a quick ramp-up in technology and multiple application areas in homes, offices, and factory settings. So with all these future areas, we believe the potential is immense. Unfortunately, I cannot give you the exact breakdown and precise cost estimates because these are still evolving, but the overall trend is very exciting for us.

So my second question is about our passenger vehicles. Can we get more details on the new models, their segments, and price points in both the domestic and international markets? Also, do we have a volume target for 2026?

Tina, it's Charles here. We believe that one chassis, dual powertrain vehicles present very attractive opportunities. It is one of our strategic initiatives to expand the volume and TAM of each of our vehicles. On November 20, we are launching the X9 with pricing; that will be our first, which we call the Super EREV product to be launched. I think also that we have already three existing vehicles, Super Electric models already registered with regulators, and we plan to launch those three products in early 2026. As Xiaopeng also mentioned, we have four new vehicles launching equipped with both BEV and EREV powertrain options. Those four new vehicles are positioned in different various segments and various pricing segments we're in. We believe that will continue to enhance our product portfolio in each of the price segments we are targeting. In terms of growth into next year, we believe the one chassis, dual powertrain vehicle models, the seven models will significantly drive our growth next year. Another growth driver we have seen is that the international market will continue to be a major driver for us. With our current products available in the international market, we have already hit 5,000 per month for September and October, the two consecutive months already. Of the seven new vehicles we're launching next year, at least three of them will go to the international market. We are confident that the international market volume will continue to be a very important growth driver for us into 2026.

The next question comes from Pingyue Wu with Citic.

I have two questions. My first question is about the new EREV model. What do we think about the growth potential of our new EREV models in 2026? My second question is about the humanoid robots. How do we view the fuel economy of the humanoid robots since we have implemented some new technologies, such as solid-state batteries? In terms of affordability, will the IRON robot be affordable for families, maybe around RMB 200,000 or even less?

First of all, regarding the first question, it's interesting to note from the sales figures since the launch of the X9 that there is a significant distinction between our targeted customers and the actual users of BEV and EREV. We believe there is potential for several quarters of growth when the new version of the X9 is released, as different customer groups tend to purchase BEVs and EREVs based on varying circumstances. Specifically, users of BEVs and EREVs vary based on the size of the vehicles. In larger vehicles, the adoption rate for EREVs is greater, whereas for smaller Class A vehicles, the ratio of BEVs is higher. Therefore, we anticipate needing to wait for more data through Q4 and Q1 next year to provide a more definitive answer. Thank you. Moving on to the second part of your question about the affordability of robotics, I want to highlight that the pricing logic differs significantly between cars and robots. The bill of materials cost for our Gen 6 and Gen 7 robots remained quite high last year. However, in the first half of this year, as we prepared for mass production, we became increasingly confident that the future retail price of the robots could align closely with car prices. Additionally, traditional car pricing is heavily weight-based, depending on the materials used, such as various metals and elements. In contrast, the software component in robots accounts for over 50% of their value from the outset, compared to only 10% to 20% in many cars. This means that substantial investment is necessary to train the software and integrate the overall system, including the domain controller, which poses challenges for many in the industry. We are optimistic about our future developments in robotics and aim to manage a limited number of SKU integrations, unlike the extensive SKUs involved in car manufacturing. We will also make every effort to keep robot pricing accessible to empower many households in the future. Thank you.

The next question comes from Xiaoyi Lei with Jefferies.

I have just one question. Could you please provide an update on the progress of our overseas localized production for next year? Additionally, how do we plan to leverage our smart driving capabilities to drive sales growth in international markets?

It's Brian, again. Just to address your question on overseas plans for next year. You're right; we actually initiated our local production this second half of this year with the first factory in Indonesia and another factory production facility with a partnership with Magna in Austria. Those, I think, are slowly ramping up the capacity. We anticipate the volume for next year's production in these two plants will continue to rise and support our overall overseas growth. In Europe, we are looking at tens of thousands in terms of the number of vehicles locally produced there. In Indonesia, we estimate a smaller but still sizable number in the high thousands. Looking beyond these two plants, we continue to look for additional opportunities to establish local capabilities in other markets, as well as building local supply chain capabilities to support the localization in these key regions. We will be increasing our local content, increasing our local stores' materials, and pursuing further localization strategies. This is an ongoing must-do for a company with global ambitions. Looking at global product sales next year, as Charles mentioned, we expect higher growth in international markets compared to our domestic market. We also expect a higher contribution economically from those markets.

Since there are no further questions, I'd like to turn the call back over to the company for any closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact XPeng's Investor Relations through the contact information provided on our website or the Piacente Financial Communications.

This concludes today's conference call. You may now disconnect your lines. Thank you.