EHang Holdings Limited (NASDAQ:EH) Q3 2022 Earnings Call Transcript

Operator: Thank you very much for the questions. Allow me to proceed with the next question. One moment, please. Our next question comes from Jiahui Wu from Goldman Sachs. Please proceed.

Jiahui Wu: Okay. I will translate for myself. Yeah. Thanks management to take my question and congratulations on the results. I have two questions. The first one is from EHang 216. Could you please share us this aircraft the pump costs breakdown, especially the battery, the model, the battery management part and who are the support can we take the view that this EHang model above cost breakdown is similar at the EV? And second one is how many the preorder and the decrease we have so far? And in terms of scenarios apart from the , what types of passenger transportation scenarios are we penetrating to? Thanks.

Richard Liu: Thank you for the questions. This is Richard. Let me take your first question and then I will let our COO, Xin take your second question. So basically, the cost structure of the EH216 AAV can be divided into three major portions. First, the power and propulsion system; and second, the fuselage infrastructure; third, the electronic components and others. And from a new energy mobility product perspective, the major composition of the propulsion system of an EH216 AAV can be regarded similar to that of an EV. It mainly includes electric motors — motor drivers and batteries together with the battery management system or BMS. In respect of percentage each portion as mentioned just now cost us roughly one-third of the total cost more or less.

In respect of suppliers, most of our qualified suppliers whose long term relationships are those located in South China, more especially in the Per River Delta area, which known as a world leading manufacturing hub and where our headquarter is. So this give us an easy access to a large number of high quality suppliers and the competitive edge in respect supply chain, in terms of costs and efficiency as compared to our peer companies in other countries. So I will let Xin take your second question.

Fang Xin: Okay. This is the translation of Mr. Fang’s answer. So far this year, in addition to the over 200 units of EHang AAV preorders in Asian markets. We have potential orders from many domestic customers in pipeline, such as Qingdao districts in Guangdong city, Guangxi Province, and to Jishou City in Hunan Province. They are very interested in deploying EHang AAV’s in the local areas to develop the low altitude tourism industry. And the potential orders in Zhaoqing include 60 units AAVs, which are expected to be placed and delivered gradually after obtaining tax certificate. In addition, 5 units of EHang 216 has been delivered to to developing an aero sizing project. And this customer intends to purchase additional 25 units as the project evolves.

And apart from the low altitude tourism market, we are also in contact with the customers who have needs for firefighting and emergency transportation, such as the Qingdao fire department and some hospitals which has a potential order about 6 units of EHang 216 by our fighting model. Given that our initial primary target market is the low altitude tourism, which we invest more resources. The revenues from this market will be the most significantly in the near future. And followed by the firefighting and the emergency aero transport use cases. This is the all of the translation.

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