Welcome to the Gogoro Inc. 2023 Q4 earnings call. This conference call is now being recorded and broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. I'd like to turn the call over to the Gogoro team.

Welcome to Gogoro's 2023 Q4 earnings conference call hosted by our CEO, Horace Luke; and CFO, Bruce Aitken. Hopefully by now, you've seen our earnings release. If you haven't, it is available on the Investor Relations tab of our website, investors.gogoro.com. We are hosting our earnings conference call via live webcast through Gogoro's website, where you can also download all of their earnings release materials. We will also be displaying the materials on the webcast screen as we ago. If you're joining us through the conference call, your dial-in lines are in listen-only mode. After Horace provides some of the business highlights from Q4 and our outlook for 2024, Bruce will go a bit deeper into the Q4 and full-year 2023 financial results. And then we will open the line for Q&A and answer as many questions as time allows. As usual, we would like to remind everyone that today's discussions may contain forward-looking statements that are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the forward-looking statements that appear in our press release and investor presentation provided today. And now, I would like to turn the call over to Horace.

Thanks for joining our call today. We're pleased to have this opportunity to meet with you and provide a summary of our fourth-quarter 2023 results, a recap on our 2023 full year, and share our outlook for 2024. We've already had a few key announcements and product launches in January as well as in Q4 of 2023. We launched the Gogoro Pulse, our new flagship vehicle just last week, and it is awesome. And I'm very proud of the work our team has done. We continue to innovate and redefine what is possible when it comes to electric mobility. The Gogoro Pulse demonstrates a big leap in our industry leadership in both vehicle design, smart technologies, user interaction, and vehicle performance, and will extend our lead in the electric two-wheeler industry. We continue to extend our partnership with Apple, and with the latest Pulse vehicle, we'll partner with Qualcomm to deliver the latest chipset to power state-of-the-art dashboard. Last week, we also announced a partnership with Copec Energy in Latin America, where we'll be launching in Chile and Colombia in Q2. In Q4, we launched our Gogoro CrossOver vehicle, both in Taiwan and in India and commercially launched our battery swapping service in the Philippines. We also announced an agreement with Uber Eats in Taiwan to speed the transition of their delivery fleet riders to electric two wheelers. I'm excited to confirm that we are also progressing smoothly with the facility fill out of our first battery pack factory in India and have begun moving our state-of-the-art robotics equipment into the factory. We'll provide more detail on each of these throughout this call. 2023 was a year of relative economic and market challenges. Interest rates were increased by central governments. Monetary policy was tight. Economies around the world struggled to…

Thanks for the strategy update, Horace. Allow me to expand on our financial outlook. 2024 is a year where we will focus on not only the Taiwan market but also on a number of growth opportunities. We estimate the 2024 market for two-wheeler sales in Taiwan will range from approximately 750,000 units to 850,000 units. We're targeting growth from 2023 unit sales and market share and healthy growth in our Gogoro network from accumulating the subscriber base. To support this market growth, we've launched the Gogoro Pulse, our all-new flagship vehicle, which demonstrates what's possible in an electric two wheeler. In the coming months, we have other product launches planned to continue to penetrate the more cost-conscious product segments while maintaining Gogoro's focus on unique design, usability, and performance. We've been working on these vehicles for some time and are excited to share them with our customers. In Taiwan, we're expanding our channel via the continued build up of our Gogoro Quick Service stores. These allow for legacy scooter sales and repair shops to also sell and service Gogoro and partner-branded electric vehicles, creating upskilling and cross training opportunities for existing ICE scooter industry players. We have over 170 GQS stores in operation today and intend to keep growing the footprint all over Taiwan. Taiwan is expected to represent approximately 90% of our revenue in 2024. In international markets, we're focusing on India, the Philippines, and continued growth in Korea, where there are already 10 partner-run retail locations and over 180 Go Stations in 18 cities. Last week, we announced our newest partnership with Copec, the leading energy company in Latin America, to introduce our battery swapping technology and smart scooters in Chile and Colombia in Q2 2024. Together with Copec, we are establishing the first network of battery swapping…

Thank you, Horace and Bruce, for the detailed update. So as attendees are formulating their questions, I will ask two questions that we have collected from analysts. Question number one, there have been recently some setbacks on EV adoption for four-wheeler market. What are management's thoughts on two-wheeler electrification adoption, and what is your plan to combat the recent intensified competition from ICE makers if you don't plan to participate in a pricing war?

I'll take that. I think it is inevitable that traditional ICE vehicles will transition to EV. It's just a question of time. And I think that it doesn't matter if it's four wheel or two wheel, that transition will happen, and it will happen even faster with two wheelers because the cost economic makes even better sense. But educating consumers that have had a long history of using ICE vehicles on the benefits of using electric is important, and it's an ongoing journey for us. Achieving relative price parity on both vehicle costs as well as total cost of ownership over time is really important, and we believe that electric adoption will happen. While we don't believe in engaging in short-term price competition, it's beneficial to our long-term strategy. Developing new technology and services that can help consumers get excited about electric is a really great inflection point we can put in. The most recently announced Pulse, the Gogoro Pulse, is a great example how and what electric can do that ICE cannot. With all the new technology and all the new interaction and all the new connectivity that the vehicle and the performance that vehicle can provide, I think it will really excite the market. And if you haven't checked it out yet, please go to our website and check it out. It is generating a lot of buzz both in the marketplace and with the media here in Taiwan, and preorders are already rolling in for that product sight unseen. We are grateful for our customer that have already been subscribers for Gogoro network, and we encourage anyone that hasn't tried an electric two wheeler to do so. The riding experience and the usability is just day and night. I think you'll find that experience a very positive one. Each person can make a contribution to the reduction in carbon emission by choosing electric vehicle. And in Taiwan, with the market share and penetration we have done, the difference is clearly visible on the street today.

Thanks, Horace. So the second question is, can you provide some color on estimated market size, vehicle volume, and margin outlook for this year?

Thanks, Annie. As we mentioned during the presentation, industry estimates for 2024 for the Taiwan market are approximately 750,000 to 850,000 unit sales. While other markets like India, for example, are many, many, many times larger, India's annual sales are approximately 15 million to 20 million units. In Taiwan, we're targeting growth on last year's volume. We're targeting growth on market share and broad penetration across all segments with the introduction of new vehicles and new services. In India, we're really just getting started, but we are expecting during 2024 to make solid inroads in the B2B market segments. As far as margin goes, we will continue to maintain tight control on spending. Our goal is to maintain a relatively flat or slightly improved gross profit margin compared to 2023 while we focus on growing revenue in both Taiwan and in international markets.

Thank you, Bruce. At this time, operator, please open the line for Q&A session.

[Operator Instructions]

While we're waiting for participants to ask a question, I have an online question. In India, FAME II subsidies favors wire charging over battery swap. Can Gogoro offer two versions of your scooters, one that can swap batteries and the other version where customers own the battery with tethered charging that way Gogoro can qualify for FAME II?

Okay, great question. The qualification for FAME II in India requires a number of parts to be executed, the first one being the vehicle having to be made in India with a supply chain that is in India. There is a long list of parts, and we've worked really diligently over the last year to enable a supply chain that's unique to India within India to build the vehicle. And today, we're already in the state of Maharashtra to manufacture the first vehicle, the Gogoro CrossOver GX250. And while the vehicle is ready, the next piece that needs to come into place is, you're absolutely right, a charger is required, a tethered charger is required because the market is unfamiliar with battery swapping. And so in order to qualify for FAME II, our vehicle, as you have stated, will have a charging capability, however, with the usability of swapping. As it is indicated, if you go to the website of Gogoro, you also see that we offer an option of charging also for our vehicle within Taiwan. But I can assure you that usability and the ease and convenience of battery swapping overwhelms the legacy charging, the [cumberness] and also the time it takes to actually charge a battery that everybody chooses to swap. And in Taiwan's case, 100% of our vehicles sold is actually with swapping and the user opt not to charge at all even though the vehicle might be able to do that. And the last piece of the equation is really around the battery that needs to be made locally. And today, just earlier with Bruce and I highlighting to everyone, the battery factory in Pune, Maharashtra has been fitted out and the equipments are moving in and turning on as we speak. We see that coming in sometime in Q2, and with that ready, all three pieces of component will be ready for us to qualify for FAME II. So I hope that answers your question. It is essential that we take advantage of all the policies there in favor of electrification, and we're working diligently. Our team is working diligently to make sure that we check all the boxes and make it as flexible and as easy as it is for consumers to adopt electric.

[Operator Instructions] Long Lin, The Benchmark Company.

This is Long on behalf of Fawne Jiang. So I have a follow-up question on Indian market. Just wanted to ask, can management talk about more about your expectations on the ramp-up of the India markets and specifically the potential impact of the India market on the company's performance in 2024?

Sure, we can do that. So a couple of things that I'll highlight, and Horace can add on as well. The first is, as we mentioned, we expect approximately 10% of our revenue in 2024 to come from international markets. So clearly, India is one of our focus areas. We're not giving a specific revenue target for India, but we do anticipate starting to see penetration. The market that we're targeting in India to begin with is the B2B marketplace. We've talked about this a number of times before. Penetrating the B2B space, the value proposition is extremely clear. The riders are clear that they want battery swapping. The fleet operators are clear they want battery swapping because it means no downtime. And so with these vehicles being on the road literally 12 or 10 or 14 hours a day, there's no way you can keep a vehicle on the road that long without it being a battery swapping vehicle. If you have to stop and charge, even if it's for an hour, that makes a dramatic impact on the number of deliveries or the number of trips that a rider can make, and that directly impacts their bottom line, their take-home pay. So we view the B2B market as a baseload. We can, through the B2B sales, establish a broad network of Go Stations whether it's in a city like Delhi or as we expand into other places like Bangalore or like Goa. We're also targeting tourist-oriented, free float scooter services with a partner in the city of Goa and likely other cities to follow. So there's a number of different things that we're trying out from a B2B penetration standpoint. We do expect to see meaningful unit sales. We expect, again, 10% of revenue to be international. As Horace mentioned, the critical components are that that vehicle is ready to go, that the charger is ready to go, that the battery pack is ready to go. And we'll have all those pieces in place in the very near future and be able to start with the ramp in India.

I have another question coming from online. Sales of electric generators have increased over the years due to global complex and extreme weather conditions. Why doesn't Gogoro expand your product line into the battery energy storage market, where our customers can buy and use their own Gogoro batteries to provide backup energy for their homes or businesses, customers that only Gogoro battery can also become potential scooter purchase in the future?

That's a great question. We see our battery as just storage devices for energy. First, usability of that, of course. As everybody know, what we do is mobility. So we have also used those battery packs for other storage functionality such as backing up major intersections that's serving as a generator, as well as backing up -- we actually recently worked and turned on a SREG or a small regenerative energy generator service with the Taiwan Power, where we are turning on 1,000 of our location to do both spinning reserve as well as bidirectional, what we call, frequency response with the network, again acting as a generator. We do have about approximately 1.3 million batteries on the network, and when those batteries are in the stations, they're part-time serving as standby ready for somebody swap but, at the same time, serving as a massive generator for the cities that they serve today. As we look forward in what the batteries can do, obviously, there's many other functionality we can do with the battery. But our number one focus as a company today is to really solidify our market position in Taiwan as we have done so greatly today with majority of the vehicles that are electric in the marketplace being electric powered by our battery swapping system. And as Bruce just said, the near-term focus is really to take what we have learned and what we've developed in Taiwan and expand into the mobility space into markets that we have already announced: markets such as India, markets such as Chile and Colombia, markets such as Korea, and others that we are actively participating within. Batteries are simply energy storage devices. They are, like you said, generators. They can instantly take energy and instantly give energy. We will focus on that thesis with mobility as a first function and as storage and smart grid usability as the kind of ancillary services that they can provide. In the future -- we don't know what's in the future for what batteries can do, but certainly what you mentioned as a storage device or generator can certainly be something that we look into for sure.

Thank you, Horace. We have another few questions coming from online. I'm combining them all together because it's similar. They want to know the current status or policies in India on EV battery swapping or charging.

Okay, I can take that. Battery swapping, as I said earlier in the answered Q&A, battery swapping is still very new to the entire industry. While everybody recognizes and understands the electric vehicle as a plug-in charging, there's still a lot of work needs to be done to educate everybody on what battery swapping is and what battery swapping, how it's different than battery charging. So we're making inroads. We're meeting lots of politicians, a lot of policymakers, educating them. And we have formed, along with other partners, a association called the India Battery Swapping Association, and the association has partners like Hero, like Sun Mobility, like actually other partners like Honda and others that have actually joined the, what we call, IBSA which is India Battery Swapping Association. And with this association, a lot of seminars and a lot of meetings are happening as we speak to educate about battery swapping and how policies need to be adjusted to serve battery swapping. So we look forward to a country that can be electrified through battery swapping because that's the only way we can set -- zero downtime is the only way we can actually see electric being adopted. In markets where very soon ICE vehicle for logistics will be banned. Cities like Delhi will be banning ICE vehicle from doing logistics. Doesn't matter if that logistic is carrying goods, your lunch, or people. And so that's a great opportunity for us, and battery swapping is the only solution to serve that B2B market.

Thank you, Horace. We have another question from online. Can we get an update on Gogoro's solid-state battery?

Sure. We continue to work with our partner on developing the battery solution. Gogoro's key differentiating factor is the technology behind managing the battery swapping network. Today, on the network, there are multiple generations of technology with different chemistries that are in the battery today, serving from 1.3 kilowatt hour to approximately 1.7 kilowatt hour. And those variety of batteries can be put into the network to serve our customers in time. One of the value proposition that we give to our customer that people see as a great part of not buying a battery but swapping a battery is that they don't have to worry about the upgrade of technology, and that when a new technology is rolled out, they simply can subscribe and actually get access to it. And with the solid-state battery, as we've stated earlier with the announcement, it is years away still. And we're working diligently to make sure that we're one of the first people to be able to roll that out to our customer. But it will take time. Solid-state battery is still in its early phase, but it offers a lot of benefits such as safety, durability, long range, and capacity. All those things are things that we can actually use to benefit our customer. But in the meantime, our network is ready to plug in any other technology that needs to be plugged in. And we're very flexible about that and serving our customer with different technologies.

Thank you, Horace. Operator, can you check again online whether we have anything from the audio?

There are no further questions from the audio at this time.

Great. Thank you, everyone, for joining our call today. 2023 was a challenging year for the overall market standpoint, we focus on delivering solid financial result regardless. In 2024, we're committed to continue development and deployment of the best technology, best vehicle, best battery swapping platform and ecosystem to ongoing innovation and performance leadership in electric two-wheeler industry. We aim to deliver exceptional performance, efficiency, and reliability, both in Taiwan and the international markets that we're going into. We're still in the early stage of electrification overall. Our goal remains to continue to support the inevitable transition from ICE-powered two wheelers to electric two wheelers. As always, we appreciate everyone's support as a community. Doesn't matter if it's our employees, our suppliers, and most important of all our investors on this journey. Thanks for calling in today's webcast and talk to you guys real soon. Thank you.

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