ECARX Holdings, Inc. (ECX) Q4 2024 Earnings Report, Transcript and Summary

Good day and thank you for joining us. Welcome to ECARX’s Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] As a reminder, today’s conference call is being recorded. I would now like to turn the call over to your host for today’s call, Rene Du, Head of Investor Relations at ECARX. Please proceed, Rene.

Thank you, operator. Good morning and welcome to ECARX fourth quarter and full year 2024 earnings conference call. With me today from ECARX are our Chairman and Chief Executive Officer, Ziyu Shen; Chief Operating Officer, Peter Cirino; and Chief Financial Officer, Phil Zhou. Following their prepared remarks, they will all be available to answer your questions during the Q&A session that follows. Before we start, I would like to refer you to our forward-looking statements at the bottom of our earnings press release, which also applies to this call. Specifically, we will discuss certain forecasts and projections, which represent the current and preliminary view of our management team and is therefore subject to change and uncertainties as well as these forward-looking statements. Further information on specific risk factors that could cause actual results to differ materially can be found in our filings with the SEC. In addition, this call will include discussions of certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to the GAAP financial measures can also be found at the bottom of our earnings release. With that, I’d like to hand the call over to Ziyu.

Thank you, Rene. Hello, everyone, and thank you for joining our fourth quarter and full year earnings call today. 2024 was a remarkable year for ECARX, marked by significant milestones and progress across our business. We continued to execute on our strategic vision, further strengthening our position as a leading provider of intelligent solutions for automakers on a global scale. With market momentum continuing to build towards software-defined vehicles, we remain at the forefront with a clear focus on strengthening and expanding our portfolio of cutting edge, cost-effective solutions. The global automotive market continues to grow, although at a slow pace in an increasingly challenging environment. Global vehicle sales grew by approximately 2% in 2024 to 91 million, including 64 million passenger vehicles. China continued to outpace the rest of world in 2024 with passenger vehicle sales increasing 6% to 28 million. This was primarily driven by NEVs, whereas sales surged to an impressive 30 million, up 36% and accounting for over 40% of sales. Chinese investment into advanced high-quality and high-tech production is powering a new economic future. As growth slows and remains uneven globally, it becomes ever more important for companies to stand out from competition and define themselves. We are capitalizing on this growing demand and helping automakers distinguish themselves with our innovative product portfolio, diverse customer base and strategic global partnerships. This is already having an impact, which is clear reflect in our performance last quarter and throughout the year. Revenue during the quarter and the year was up 4% and 18% respectively with gross margin of 21.2% and 20.8% respectively. Notably, our opening loss consistently narrowed throughout the year, while our business kept growing with the partial sale of an equity investment. This allowed us to hit breakeven at EBITDA level during the quarter, strengthening our confidence in reaching full year breakeven in 2025. Total shipments reached a record high of 2 million last year, up 33% year-over-year with over 700,000 shipped during the fourth quarter alone, up 10% from last quarter by the end of 2024. There were over 8.1 million vehicles on the road, incorporating ECARX technology. This strong performance was driven by robust demand for Geely models deploying ECARX technology such as Galaxy E5, Star Wish and Starship 7. The success of these models helped Geely exceed its annual sales target last year with momentum carrying into January 2025 where Geely sales volumes for the month hit a record high. We secured a new project with Volkswagen Group during the quarter, expanding our global customer base to 18 automakers across 28 brands. This project win is a milestone for us and our solutions, which will be deployed in vehicle across EMEA and Americas, expanding our global reach and demonstrating to a broader audience how our full stack solutions can be seamlessly customized for deployment. Regardless of market, we also won a number of new projects from existing customers as our solutions are expanded to cover even more of their vehicles. We released our AutoGPT in-vehicle AI large language model application last quarter and quickly integrated multi-LMS multimodals, including OpenAI and most recently DeepSeek. This underscores the unique value proposition we offer to global automakers with cutting-edge technology supported by a growing ecosystem of strategic partnerships. Before I hand the call over to Peter, I would like to reiterate the automized and the confidence we have in our future growth prospects. Having achieved breakeven during the quarter, we are targeting positive EBITDA for full year 2025. The USD 20 million share repurchase program we announced in December further underscores this optimism. The growing prominence of software-defined vehicles continues to create tremendous opportunities for us as we replicate and scale our solutions globally, enabling us to drive sustainable growth and value for our shareholders. I will now pass the call over to Peter, who will go through the operating results of the quarter in more detail.

Thank you, Ziyu, and good day to everyone. I’ll start with our growing customer base, where Ziyu mentioned, we secured a milestone project win with the Volkswagen Group during the quarter. This project will deploy our Antora 1000 computing platform and ECARX Cloudpeak integrated with Google Automotive Services in multiple vehicles through Volkswagen’s Global Entry Infotainment initiative, which is set to launch across EMEA and the Americas towards the end of this decade. We also won 3 new design wins from our existing customers with 2 deploying our Galena computing platforms and deploying Makalu. On the product front, we had several exciting new vehicles launched this quarter. Following the strong launch in China of the Geely Galaxy E5 last August, an overseas version known as the Geely Galaxy EX5 entered start of production during the quarter and began deliveries in early 2025. The EX5 will be the first vehicle overseas to deploy the Antora 1000 computing platform, demonstrating our technological strength and ability to deliver this solution for both the PRC and international markets. We cumulatively shipped approximately 500,000 Antora series units by the end of last year, with shipments expected to surpass 1 million in 2025. This provides automakers with a cost-effective way to integrate digital cockpit and driving capabilities into a single board using the Antora 1000, which will be deployed as Geely’s mainstream entry-level solution on future models. The Hongqi Tiangong 05 started production late last year and was launched in January 2025, deploying the first intelligent cockpit jointly developed under our strategic partnership with FAW. Powered by the Antora 1000 Pro and integrated with a customized Hongqi FAW OS built on top of the ECARX Cloudpeak and AutoGPT, the Tiangong 05 will set new industry benchmarks with an immersive and AI-driven intelligent cockpit experience. A similar solution will be deployed on another Hongqi model, which is expected to launch in the first quarter of 2025. We are also working on an ADAS solution for 5 Hongqi vehicles with start of production scheduled for the third quarter, further deepening our relationship. We continue to drive innovation in other areas as well, ensuring that our automaker partners have access to cutting-edge solutions. Our Cloudpeak hypervisor, a core component of the Cloudpeak software stack, received ISO 26262 ASIL-D certification in January, the highest level of certification and a reflection of our focus on functional safety throughout the product life cycle. Cloudpeak was integrated into the Makalu computing platform and deployed on the Lynk & Co Z10 STARBUFF, which was launched in November of last year. This customized eSports version of the Z10 allows users to play AAA games on the go with an immersive gaming experience. Momentum for the Skyland Pro ADAS solution is building as automakers are increasingly seeking cost-effective solutions that they can rapidly bring to market. Skyland Pro has been integrated into Geely’s G-Pilot unified intelligent driving system, powering the recently launched Galaxy E8 all-electric sedan. The solution can be easily replicated and scaled across various brands and models, offering users a unique driving experience with advanced features such as automatic parking, assistance and highway NOA. The Skyland Pro already powers vehicles, including the Lynk & Co 08 and Lynk & Co 07 launched in 2023. The 08 model received a high CNCAP rating and remains in strong demand. With the battleground for automakers to differentiate themselves now expanding to ADAS and vehicle intelligence, intelligent driving solutions will be crucial to drive the long-term sustainable development of our business and the global automotive industry. With a clear road map for future ADAS solutions, we are already capitalizing on this opportunity and we will continue to drive innovation going forward. Our robust intellectual property portfolio keeps growing with 692 registered patents and 723 patent pending applications globally as of December 31, 2024. To demonstrate our robust portfolio of technologies, we attended numerous industry events during the quarter. In November, we showcased the Skyland Pro ADAS solution at AutoSens China, demonstrating how it can empower automakers with high-performance, cost-effective intelligent driving solutions. That same month, we also represented the automotive sector at the Saudi Arabia National Quality Conference, where we received the SASO Award for contributions to generative AI quality assurance, reflecting the impact that AutoGPT is having on the industry. We carried this momentum into 2025 at CES in January, where one of the dominant themes was AI. Interest in automotive applications of AI was extremely high this year, making AutoGPT a real point of interest. Over 4 days at CES, our management team packed in more than 50 meetings, including 17 with automakers from across the world. We also showcased the power and versatility of our solutions at our booth, including the Galena, Antora and Makalu platforms, solutions that all have been validated and deployed in vehicles currently in production, along with our ADAS technologies. A key point of our messaging conversations was the power of AutoGPT, specifically its core AutoAgent, AutoFlow, AutoScene and AutoECO capabilities built on top of several of the world’s leading LLMs to enhance the in-vehicle experience. Automakers and ecosystem partners were captivated by the AutoAgent’s adaptability to unique driver preferences, AutoScene’s monitoring of in-vehicle behavior, AutoFlow’s interaction with mobile apps and AutoECO’s seamless connectivity with in-vehicle applications across devices, creating a comprehensive range of AI-enhanced solutions. Our presentation at CES helped us set the agenda for the year to come with a focus on expanding our global business by empowering automakers with cost and power-efficient high-quality solutions. I’d like to end with a quick update on our Fuyang smart facility and our strategy to integrate manufacturing and supply chain processes. Production continues to ramp up with more than 60,000 Antora units produced in December alone and further capacity expansions planned throughout this year. In conclusion, 2024 was a remarkable year for us, and I remain highly optimistic that this will continue into 2025, especially as we lean into technological innovation and continue to diversify our customer base globally. I will now turn the call over to Phil, who will go through our financial results.

Thank you, Peter, and hello, everyone. We closed out the year with a strong growth momentum despite intense market competition, keeping breakeven at the EBITDA level during the fourth quarter. Total revenue for the quarter was RMB1.9 billion, an increase of 4% year-over-year and 36% sequentially. Sales of goods revenue was RMB1.5 billion, up 16% year-over-year, driven by robust demand for our computing platforms, especially the Antora series and Makalu, which accounted for approximately 29% of sales of goods revenue. Software license revenue came in at RMB90 million, a decrease of 3% year-over-year and an increase of 7% sequentially. The year-over-year decrease was due to a decrease in the volume of legacy project software sales, while the sequential increase was driven by the ramp-up of ECARX operating system in line with the increase in shipments of the Antora platform. Service revenue was RMB326 million, a decrease of 31% year-over-year and a substantial increase of 102% sequentially, primarily impacted by engineering planning schedules and the timing of booking design and development contracts revenue. Gross profit for the quarter was RMB411 million, down 4% year-over-year, resulting in a gross margin of 21.2%. Total cost of revenue increased 6% year-over-year during the quarter, mainly driven by an increase in sales volumes for digital cockpits. The decrease in gross margin was primarily the result of our pricing strategy to deepen penetration and drive computing hardware growth as well as a shift in the overall revenue mix compared to prior quarters. As the industry-wide pricing pressure for automakers have deepened, we expect margins on hardware products to remain challenging over the mid-term. To address this challenge, we will focus on optimizing product costs through economics of scale, our supply chain and manufacturing strategy and improving overall operational efficiency. Furthermore, we will continue to strike a careful balance between top-line growth, profitability and capital investment. Operating expenses during the quarter decreased 32% year-over-year, primarily driven by the continuous expansion of our global operations and R&D efficiency improvements as well as synergies created by reallocation and integration of R&D resources. Adjusted EBITDA gain were RMB74 million during the quarter, a significant improvement compared to a loss of RMB236 million during the same period last year, primarily attributable to the decrease in total operating expenses as well as gains from the partial sales of an equity investment. Loss per share was RMB0.11 compared to the same period last year, RMB0.89. We closed out the year with a robust performance with a full year total revenue of RMB5.6 billion, up 18% year-over-year; gross profit of RMB1.2 billion, down 9% year-over-year and gross margins of 20.8%. During the year, we further improved operating and R&D efficiency by consolidating and reallocating resources and prioritizing investments in our international business and R&D expansion. Fully operating expenses decreased 7% year-over-year, with an adjusted EBITDA loss of $592 million and improvement of $119 million from last year. Moving on to our balance sheet, as of the end of the year, we had RMB367 million of cash and the restricted cash. As we continue to optimize working capital and enhance profitability, we are proactively exploring options for a capital raise, including equity or debt financing to support our strategic objectives. As part of this effort, we recently filed an F3 registration statement allowing us to rapidly capitalize on favorable market conditions as they arise. Looking forward, we will further improve operating expenses and the product costs with a particular focus on procurement, supply chain, and manufacturing strategy and efficiency. We will continue to drive growth and expand the addressable market for our solutions by penetrating deeper into the Geely and the Geely ecosystem and growing our global automaker customer base further. For product offerings, we will continue to invest in R&D to capitalize on mid to long-term growth opportunities. Additionally, we will accelerate the build-out of two closed-loop systems, one for China and the other for global markets, each spanning the entire process from R&D to delivery. In summary, we will focus on the unique value proposition we offer to automakers, further diversify our global customer base, proactively mitigate the impact of an increasingly challenging geopolitical environment, and improve our cost structure to ensure the long-term sustainability of our business model and the financial performance. That concludes our prepared remarks today. I would now like to hand the call back to the operator to begin the Q&A session.

[Operator Instructions] Our first question comes from the line of Daniel Wang from CICC. Please go ahead. Your line is open.

Hi. Good evening everyone. This is Daniel Wang from CICC auto team. Congratulations on your strong results last year. And I have three quick questions to check with you. The first one is, could you share the company’s global production capacity layout and how you expect to pace the implementation of global orders in the coming years. The second one is what’s your current plan for ADAS or AD products, which clients are you working with? And where do you see growth opportunities in your collaboration with Geely? The last one is what’s your overall strategic roadmap and development goals for over the next 3 years to 5 years? That’s all my questions.

Hi Daniel. This is Peter. I will take your first question. We just talked a little bit about our manufacturing strategy. 2024 was a big milestone year for us in terms of manufacturing because we ramped up our capabilities in China quite extensively. If you remember, we took the control of a joint venture we had established quite early in ECARX’ life and also opened our new Fuyang facility. We are today very close to that site. We are holding a big supplier there. So, the Fuyang facility continues to ramp up very aggressively to serve our needs in China and will continue to be our premier site where we are investing heavily in technology there to have a leading manufacturing facility in the China region. Globally, as we expand, as we mentioned earlier in our remarks, we had a big milestone win with Volkswagen. And as we continue to expand with opportunities in South America, India, and in Europe, I would expect that we would probably use some EMS or contract manufacturing partners that will help us expand our production capacity while we are continuing to expand engineering services, our engineering capabilities to serve the global audience. So, I think we will use very similar strategy that we utilized in China as we continue our growth over the last 7 years that we have started with some partnership relationships, and then we will continue to expand as it makes sense as we grow our business.

Okay. So, Ziyu speaking, so I will take the second question about the ADAS. We have already made a Skyline Pro product operating on linking KUKA 08 and 07 last year, yes, I think 2 years ago, yes. So, that’s a 10 camera solution and with five radar and also can support highway NLP function. Also we are following the urban feature as well. And this product already be a part of the GD-ADAS roadmap they just announced. Also we are keep working on this platform, Skyline Pro and Skyline. Also we just announced the AD1000 SoC with 5G company together. That is a very high performance AI computing SoC platform from FAW Engine IC design company we invested. So, very similar to SE1000 from Antora platform for digital cockpits [ph]. This one we will get ADAS computer unit for very high performance feature on this platform. We are starting investments on development and we have to make production next 2 years. This is ongoing still. Also I think we are investing the ADAS roadmap to stretch our portfolio and to earn more growth next 3 years. That’s a lot of expectation here.

Thank you. It’s very clear. Thank you.

Thank you. We will now move on to our next question. Our next question comes from the line of Dai Shen from SPDBI. Please go ahead. Your line is open.

Dear management, this is Tony from SPDB International. First of all, congratulations on the EBITDA break even in the first quarter of 2024. This is perfect. And so I have got two questions here. The first question is about the guidance or the outlook of 2025. Can the management share some color or guidance for revenue, gross margin, and also the breakeven point of 2025? This is my first question. And the second question may be also related to the ADAS penetration rate increasing significantly, especially powered by BYD in February this year. How do we see the opportunities for ECARX, the PAM opportunity and the customers demand for both the cockpit and the driving solutions? These are my two questions. Thank you.

Hello. Hi. So, this is Ziyu speaking, okay. So, thank you for questions. The first question, I think the answer is very clear. I think in 2025, we are very, very focused on breakeven. That’s very main priority for us. So, of course we still will have the growth for revenue, but that will be the second priority for stronger breakeven. So, that breakeven is top priority for us, because we believe the health of the cash flow and the finance and balance sheet is the most important for the company, the global journey, because we already win the global OEM and we have to go very health finance, balance sheet to support our global expansion. So, that’s why breakeven is my main priority for the company. Well, answer to your first question, okay. And second question about the ADAS opportunity and also digital cockpit opportunity. Yes, we already know that BYD announcement. So, we believe that ADAS growth is very significant in China market. And most of OEM following the journey BYD is doing. So, that’s why I think it’s a good opportunity. I have just answered the question to CICC before that. We invest in Skyline and Skyline Pro already. Also, we are fast moving with the FAW Engine chipset, SoC 81000. Also we will go NVIDIA platform as well for SOI. So, that’s why I think ADAS portfolio will be very important, be part of the ECARX next 3 years growth. So, that’s why we believe ADAS feature and ADAS software development will be very key for the company. And we will continue to invest in this area.

Okay. Perfect. And that is very clear. May I have a quick follow-up? Can we have any color on the gross margin, maybe for 2025, especially, how do you see the price trend related to gross margin? Okay, this is my last question. Thank you.

Hey. Phil Zhou here, I am happy to address your question. So, regarding the margin performance, as I can see that in Q4 last year, we just recovered our gross margin performance back to 20% and above. And that reflects our ability to manage the portfolio selling. So, in Q4, we sold our balanced software and services. At the same time, we also drove a very effective cost-down activities. So, that’s why in the end, we are able to recover the margin back to 20%. So, coming – when moving into 2025, this strategy will continue. For sure, we foresee the headwinds ahead regarding the pricing erosion, pricing pressure. But at the same time, the company is ready to drive the upstream supply chain management. So, we will keep optimizing cost and as well as the scale, the economics of scale. So, at the same time, back to your first question regarding our breakeven, right, our breakeven, the path to breakeven in 2025 is built on the data-driven strategy, alright, and with measurable progress. And we focus on multi-financial dimensions as well, right. First of all, we go, for sure, we will accelerate the top line growth with the volume scaling. You may have observed that our installation rate and penetration rate keep increasing. Last year, we shipped in total nearly 500,000 units in our customers. At the same time, right, we perceived that such kind of mix will keep climbing, which will definitely contribute to our revenue growth as well as our margin performance. Second, we will drive the operational efficiency improvement as well. So, we already systematically reduced our OpEx versus revenue ratio from ‘22, 53% to 34% in ‘24. And in ‘25, we foresee the percentage will further optimize to 20% plus and which is really helpful for our breakeven achievement. And yes, as I have mentioned earlier, the effective cost to structure optimization definitely will help us to achieve that goal as well. So, hopefully, I can address your question and by adding more minutes with answers.

Okay. Perfect. Thank you. Thank you, Phil. Thank you management.

[Operator Instructions] Our next question comes from the line of Jenny Wang from UBS. Please go ahead. Your line is open.

Hi, this is Jenny Wang from UBS auto team. Congratulations on the growth and thanks for taking my questions. I have two questions. First, could you please provide a revenue breakdown by clients for ‘24, and maybe share your outlook for your current mix for the next 5 years to 10 years? And the second question is that, as the largest smart cockpit supplier for Geely brands, do you expect ECARX to benefit from Geely’s supply chain consolidation and increase the share of Geely brands further? Where was the ceiling of your share at Geely?

Okay. Jenny, maybe I will take your questions. I think as we look across our customer base, as Ziyu has highlighted many times, continuing to diversify our revenue from additional customers is very critical for our strategic path forward. And we are very selective as we do that. In 2024, at the end of the year, we launched the two Hongqi models. That will happen, I think between December and January. And then as we go through 2025, we will see additional launches with Hongqi and with FAW as we continue to expand our relationship and deepening our partnership with them. Additionally, we will certainly see some expansion of our product set with Hongqi as well beyond the digital cockpit, which is where we have started that relationship. We are continuing to focus in China on selective expansion as we see customers that align with our winning strategy. We are very excited to engage with them and develop similar relationships that we have with our existing customers. From a global perspective, as we mentioned, the activity with Volkswagen is certainly a very important milestone for the company. That product will launch, as we mentioned, a few years from now, which is the normal development cycle in the international market. And we are already engaged on already a number of mature RFQs that we would expect to be able to continue to gain traction in the global market and capitalize on the capabilities that we have built up. Our largest vehicle in the global market that we launched was the EX30, and we are continuing to expand our relationship with global cars. And then lastly, you talked about Geely. I mean we have definitely seen growth with the Geely brands. The Antora platform is a key element of Geely’s current architecture and will continue to deploy across additional models as we go through the next few design cycles. Ziyu, I believe, had mentioned earlier around the growth of the Antora shipments expected in 2025 and beyond, so we expect that product continues to gain good share throughout the market and deliver a very fantastic user experience to the consumers of the vehicle. So, we are quite excited about the deep partnership that we have built with the Geely brand, and we expect to continue to build off that, both in developing here our products like our Antora series, as well as deepening our relationship with them.

Yes. And regarding the mix from different customer types, and as Peter mentioned, in ‘25, we will massively support FAW Hongqi. There are multi-programs to launch. At the same time, starting from ‘26, Hongqi, FAW Hongqi volume will climb up. And then moving to ‘27, ‘28 timeframe, Volkswagen business, we will start to do massive supply as well. So, let’s – in the end, by ‘27, ‘28 timeframe, the brand mix from the GD and the non-GD will eventually achieve a 50% versus 50%. That is our goal. And we are on the right trajectory to achieve that.

Thank you so much. That’s all for me.

Okay. Thanks Jenny.

Thank you. We will now move on to our next question. Our next question comes from the line of Wei Huang from Deutsche Bank. Please go ahead. Your line is open.

Hi. Thanks for taking my question. Congratulations on the very strong set of results. I have three quick questions. The first one is, can you maybe give us the Geely’s share of your total revenue in 2024? The second is, the Lincoln Co brand is a significant customer for ECARX. And do we see any impact on our business with them, given their merger into Zeker? And the third is, Geely recently announced the Galaxy E8 with the Qualcomm A295 chip. Is this using our Pikes computing platform? Thank you.

Thank you. I am sorry, the first question is regarding the Geely contribution to 2024 performance, right?

Yes.

Okay. So, in 2014, I would say that the majority of revenue still came from Geely, but we significantly shifted our focus to non-Geely expansion. So far, nearly 80% of the revenue still came from Geely and Geely related to the ecosystem business, and 20% is from non-Geely business. So, that is the general answer or general summary about our revenue performance.

Yes. That’s in 2024, and also, you already got information from the public. We just launched the FAW vehicle. And also in 2025, we will have the significant revenue from FAW. We will strengthen the GD revenue. Also, we just won the Volkswagen Global Fuel in 2027. So, that’s why we have super confidence in the coming 3 years. We will strongly strengthen the GD revenue in the company, okay, the first question is okay?

Yes, that is very clear. Thank you.

Okay. So, the second question about Lincoln Co and Zeker, right, so I think we don’t have too much impact on that because we are still a very strong peer-reviewed supplier for Lincoln Co, the fundamental portfolio. Actually, everybody know, as you know, so Lincoln Co 08 and 07 were successful. We contributed Antora platform with Flyme Auto software together in Lincoln Co car. Also, we keep working with them very closely. And also, every end user very, very, very enjoyed the user experience from Flyme Auto in the system. So, that’s why I think in the near future, in the coming years, we still very important to partner with Lincoln Co brand. There is no doubt about that, I think. And also you mentioned Galaxy E8, right, so Galaxy E8, I think is still using the Flyme Auto. We are a software partner with Geely for the primary auto adaption. But this hardware, 8295, is not from us. That’s from other supplier. But in Galaxy E8, also we provided Skyline ADAS system directly to E8, and also we are providing the full feature for including highway NLP feature on the Galaxy E8.

Yes. Understood. That is very clear. That’s all from me. Thank you.

Thank you.

Thank you. There are no further questions at this time, so I will hand the call back to COO, Peter for closing remarks.

Okay. Well, first of all, I just wanted to thank all the members who joined the call. We appreciate the questions. You know, ECARX really had a milestone quarter and a great end of the year of 2024, achieving positive EBITDA was a big effort that the organization was extremely focused on. As Ziyu mentioned, we are continuing to focus on repeating those results throughout full year 2025. We had a robust launch pipeline that we discussed as we continue to deepen our relationship with new customers such as FAW and our announcement for global cars, actually for Volkswagen was a big impact for the organization that we are excited to continue to deepen our global relationships with key customers. So, thank you everyone for the call today and appreciate everyone’s engagement.

This concludes today’s conference call. Thank you for participating. You may now disconnect. Speakers please standby.