Niu Technologies (NASDAQ:NIU) Q3 2023 Earnings Call Transcript

Now, turning into international electric moped market. We faced the challenge in this quarter with a year-over-year decline in the electric moped sales, accounts for 62%. Several factors converge and created this downturn, including the decline of the electric moped market in the key European countries like Germany and Netherlands and the temporary operation disruption due to issue encountered by our distributed partner in Europe. While we acknowledge those challenges, we are actively engaged in addressing them and regaining the traction in this market. First, we expanded our product portfolio beyond electric mopeds, widening our addressable markets. We have unveiled several key products ready for Q4 2023 and 2024 at EICMA in November. One key product that we revealed was XQi3 electric dirt bike.

It is designed with a futuristic look with a handful of choice aluminum frame colors integrated with new signature Halo light. We have revealed the XQi3 product during the EICMA in Milan, Italy in November, and also brought it to the Electrify Expo launch event in Austin, United States. The XQi3 marked our expansion into the dirt bike categories and the new XQi3 has attracted tremendous amount of attention within the only week since its debut. The XQi has won the 2023 Gold Winner of the New York Product Design Awards. We anticipate making the XQi3 model available to the North American and European market in Q1 2024. And we’re confident that it will bring up the sales and therefore uplift the NIU’s brand recognition. Another product we launched for Europe is RQi, NIU’s high-performance urban quad electric motorcycles.

It is designed to deliver accelerating city ride with features like dual removable batteries and ABS. With a top speed of 110 kilometer per hour and 0 kilometer to 50 kilometer per hour acceleration time just under the 2.9 seconds, the [RQi’s targeted] (ph) riders for exciting acceleration experience. The motorcycle is equipped with the integrated traction control system building from rear cameras and the impact detection system making it sophisticated and it’s also a safe riding option. It also comes with NIU’s core smart features. The RQi is expected to be available from Q1 2024 in Europe. During EICMA, we also brought the award-winning XQi to the international market. It features a futuristic design that earns the 2023 Red Dot Best of Best Design Award.

The bike features the die-cast unibody frame with 0 solder joint, ensuring seamless integration of form and functions. They offer easy handling, making it ideal for city commute. Now, in addition to those electric motorcycle products, we officially launched the NIUswap Battery Swapping solution compatible with the newly launched F600 e-mopeds. The swapping technology enables rider to swap batteries quickly, reducing downtime and increasing the convenience. During EICMA, we have presented NIUswap cabinets that technical solution provider collaborating with partners in Europe, Southeast Asia, and South America to deploy the battery swapping cabinets aiming to enter the respective local markets. Now, the recent EICMA events presented us an opportunity not only to unveil our latest product, but also engage in meaningful conversations with our key distribution and retail partners.

We’re actually working with our distribution partner to quickly resolve temporary operation disruptions and get back on the growth trajectory. Now, talking about the overseas micro-mobility market, the micro-mobility market has reported a 37% year-over-year decrease in sales in Q3. As mentioned earlier, the primary contributing factor is due to a sell-in order delay in Q3, while the sale of our activation volume has increased by 80% year-over-year, driven by a diverse product portfolio and expanding sales network. During this quarter, we took a significant step in expanding our product portfolio by unveiling one of our standout kick-scooter product, the KQi Air and Air X Series, at IFA event in Berlin, Germany. One of the standout features of KQi Air is the construction with the main body predominantly crafted from lightweight carbon fiber, resulting in an incredible low weight of 11.7 kilos.

The weight reduction does not compromise performance. The KQi Air delivers impressive capabilities, including top speed of 32 kilometer per hour and a maximum range of 50 kilometers. It also incorporates dual-action brake caliper to ensure its short braking distance for added safety. Moreover, the KQi Air embraces smart connectivity and enabling functions like NFC and Bluetooth unlocking, customizable charging, capacity setting, speed adjustment, and also the regenerative braking strength. Notably, the KQi Air was awarded the Best of IFA 2023 by GadgetMatch, a highly regarded tech channel. The KQi Air has MSRP of RMB1,400 for the standard version and RMB1,799 for the KQi Air X full carbon fiber version. We launched the pre-sale campaign on September and we expect to deliver the KQi Air to our customers in December this year in time for the holiday season.