Welcome to the Gogoro Inc. 2024 Q3 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 would like to turn the call over to the Gogoro team.

Welcome to Gogoro's 2024 Q3 earnings conference call hosted by our Interim CEO, Henry Chiang 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, investor.gogoro.com. We are hosting our earnings conference call via live webcast through Gogoro's website, where you can also download all the earnings release materials. We will also be displaying the materials on the webcast screen as we go. If you are joining us through the conference call, your dial-in lines are in listen-only mode. Bruce will begin with an introduction and then Henry will outline our current business and future strategy. Bruce will then go into Q3 financial results and then we will open the line with 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 risk 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. Now, I would like to turn the call over to our CFO, Bruce Aitken.

Thanks for joining our call today. We're pleased to have this opportunity to meet with you and provide a summary of our third quarter 2024 results. Q3 was challenging for Gogoro and our financial performance and stock price were impacted. We recently announced our receipt of a NASDAQ Listing Compliance Notice, our CEO's resignation and a government inquiry into our potential use of imported parts into vehicle models. Before we discuss our Q3 business results, we want to update you on each of these three points. As you know, Horace Luke resigned as Gogoro's Chairman and CEO on September 13, 2024. We appreciate Horace's vision for urban mobility and making Gogoro's battery swapping and vehicles a reality. The board responded quickly appointing Tamon Tseng, Chairman of Ruen Chen Investment Holding Company and the General Counsel of Ruentex's Group, as Gogoro's new Chairman of the Board. The board also appointed Henry Chiang as Interim CEO. Prior to his new CEO role, Henry had been a Gogoro for more than six years where he founded and led our GoShare business, and most recently led our Taiwan business. According to NASDAQ listing rules, all companies must maintain a $1 per share average closing price of the company's common stock over a consecutive 30 day trading period. We were notified of our non-compliance by the NASDAQ on October 29 and issued a press release on November 1 in accordance with NASDAQ requirements. Under NASDAQ rules, Gogoro has 180 days to regain compliance by achieving a closing bid price of at least $1 per share for a minimum of 10 consecutive business days. This notice has no immediate effect on the listing or trading of the company's shares on NASDAQ, nor does it impact the company's operations or financial status. We are fully committed to remaining listed on the NASDAQ and plan to take all necessary steps to regain compliance with NASDAQ's listing requirements and to regain shareholder confidence. Now, I'd like to introduce you to Henry Chiang, Gogoro Interim CEO, to give you an update on his first two months in his new role and our plans for the future.

Thanks, Bruce. It's an honor to be leading Gogoro into the new phase of growth and expansion. As Bruce said, Q3 has presented unexpected challenges, but it has also given us an opportunity to reevaluate our business strength and priorities and establish a plan that will take us into a new era for the company that I believe will lead to stronger business fundamentals and increased revenue and growth. Before going to our plan, I want to address the talent government inquiry that was initiated this past May. Earlier this year, the Taiwan government initiated an inquiry into Gogoro's potential use of imported part in two models. We have been working closely with the government to address all of their concern and will continue to do so. Taiwan's Commercial Times reported on October 1 that Taiwan's Industrial Development Administration stated that after a technical review committee examined the submitted documents and conducted a hearing, there was insufficient evidence to conclude that Gogoro's VIVA scooter motor controller violated Ministry of Economic Affairs Domestic Production subsidy guidelines. Gogoro is proud of our Taiwan heritage and the support we have received from our customers, partners and the Taiwan government. We have become a technology leader and created an emerging industry in Taiwan that includes more than 10 vehicle makers and nearly 16 vehicles. And although we have become a strong brand, we realize that we must return to who we are and get back to our core beliefs and vision for enabling the mass transition of gas powered scooters to smart electric smart scooters. At our essence, this is who we want to be and what our battery swapping network was created to do. Growing into a mature and execution oriented business requires a shift in mindset, clear vision and a new level…

Thanks, Henry. I want to walk you through our Q3 financials starting with sales in Taiwan. We continue to accumulate new subscribers in our Gogoro network and that business continues to grow in line with subscribers. We ended the third quarter with 626,000 accumulated subscribers, up from 578,000 subscribers at the end of Q3 2023. And we had $34.9 million in battery swapping service revenue in the third quarter. The total number of registered electric scooters in Q3 in Taiwan was 23,837 vehicles, up 14.5% from 20,815 in Q3 2023. Gogoro branded vehicle registrations were 15,551, up 1.6% from Q3 2023 and powered by the Gogoro network vehicle registrations were 16,444 making Gogoro based vehicles 69% of total electric two wheeled vehicle sales in Q3 2024. This electric vehicle registration growth occurred, while the overall market for two wheelers in Taiwan declined by 11.4% versus Q3 of 2023. And as we've indicated in previous quarters, we have a backlog of orders for new vehicles, which we anticipate fulfilling in Q4. Had we delivered all of those vehicles, the EV two wheeler market would have grown by 26.5%. Based on current expectations for the fourth quarter, we estimate that total powered two wheel sales in Taiwan in 2024 will be between 780,000 and 810,000 units. That's a decline of between 7% and 10% versus 2023 full year registration figures. Based on these estimates, we expect Gogoro branded sales to represent approximately 6% to 7% of total market share and total PBGN vehicle market share would be slightly higher than that. We've been focused on cost this quarter. We're controlling spending effectively as reflected in our reductions in both G&A and R&D expenses totaling $4.4 million excluding share based compensation. We're continuing to evaluate all business segments and our international operations for…

Thank you, Henry and Bruce for the update. As attendees are formulating their questions, I will ask two questions that we have collected from analyst. Question number one, what possible action plans you implement to raise your stock price back above $1?

Thanks, Annie. As we have reported externally, we received the NASDAQ non-compliance letter at the end of October and have responded appropriately by early November. We are fully committed to remaining listed on the NASDAQ. We plan to take necessary steps to regain compliance with listing requirements that would include having our stock price trade above $1 for 10 consecutive days. And there's a number of ways we can do that, that we're currently investigating. We have 180 days timeframe to get the stock price back above $1. We think the best way to do so is through business fundamentals and we have confidence in our future. We have confidence in our management team. We're devoted to reestablishing a strong vision and then executing to deliver value for our customers, partners and investors. And we trust that in doing so, there's a likelihood that the stock price will naturally go back above $1. If it does not, then we'll have to take inorganic steps to ensure that we go above $1 and remain listed on the NASDAQ.

Thank you, Bruce. Question number two, is there a solid plan to [Technical Difficulty] negative press and sales weakness, lack of revenue conversions from overseas ventures and so forth?

Yes. Thanks Annie. Growing into a mature and execution oriented business require a shift mindset, a clear vision and a new level of discipline for how we operate on a business. We are getting back to our core belief and vision for enabling the mass transition of gas powered scooters to smart electric Pulse scooters. This is what our factory stocking network was created to do, and we have a three point plan. First, we are focused on establishing a business that can become profitable over time. This requires us to focus on revenue growth, be disciplined in our management of cost and intentional with our future investments. Second, our business begins and ends with delighting our customers and we are laser focused on the customer experience of our rider in Taiwan. Third, we are prioritizing key expansion mark hits.

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

[Operator Instructions] There are no questions on the phone lines at the moment. I will hand back to you to check for any questions online.

I'll take an online question now. First one is on a steady state basis with the cost savings program from 2025, can Taiwan operations become double-digit margin business over the next couple of years?

You have got to view the Taiwan business as a couple of different businesses. Recall that in our Gogoro network business, our battery swapping business. It's really a business that grows in a very healthy manner year-on-year with accumulating subscribers and it performs according to expectations and it performs very, very well. And so that business is healthy, that business is doing well. As we mentioned in terms of vehicle sales, there is a reduction in the overall Taiwan unit sales and that clearly has a knock-on impact on Gogoro and partner brands. In order to ensure that we maintain healthy margins, we are working on a number of different programs as Henry mentioned. We will do bond cost reduction, we will do manufacturing and production cost reduction. We will do a number of different things. And then below the gross margin level, we are working very hard also on R&D, G&A and overall corporate overhead savings. So, as mentioned, just in the third quarter alone, we saved $4.5 million between our R&D and our G&A cost savings. So, our focus is on creating a healthy business. Our focus is on looking at the business holistically. On a non-IFRS basis in Q3, our gross margin was 14.7%, which we are never satisfied with, but we think is an accurate reflection of how the business is performing right now and we'll see to continue to perform along those lines.

Thank you, Bruce. I have another online question submitted. Battery subscription service is a capital intensive because the company has to own the battery assets. Are there any plans to allow customers to own and buy their own battery system, so that they can power their scooters and home energy storage?

It's a great point. The business is in fact capital intensive. In Taiwan alone, we've spent approximately $600 million to fully embed our infrastructure into the fabric of how people in Taiwan commute, how they take their kids to school, how they play. And so with our over 12,000 racks at 2,500 locations and all the excess batteries required to fulfill the needs of those customers, it really has been a capital intensive journey up until now. As we expand internationally, we've always said we want to do so in a more asset light way. And that's why partnerships are important. So, we'll be looking to find partners who are willing to help us fund that growth. In those large markets, it will be difficult for us to replicate the Taiwan model where we are the sole owner of the battery packs. In terms of allowing customers to own batteries, it's not something that we've really done up until now but we're always open to new business models. In theory, someone could use their batteries via the use of an inverter to power their devices at home and those kinds of things. It's not something that we've actively pursued, but again, we're always open to some new business models.

Thank you, Bruce. We have a couple more from online. Can you give an update on India?

Sure. So in India, we have successfully run a couple of pilot programs throughout the first half of the year and up until now. We have worked very closely with the number of large potential partners in India to roll out Go stations and to roll out vehicles. The data from those pilots has been very informative. We're learning a few different things. We're learning obviously that vehicle price matters a great deal, and so we're working to ensure that there are a variety of vehicles potentially some made by partners which can help us grow into the India market. Our battery packet factory is nearing completion. It has taken longer than anticipated, and so we're continuing to work with a variety of potential partners in the India to find ways to grow the market. Not too long ago, India's government also released its recent fame three follow-on kind of a subsidy program and there are some aspects of that program from a battery swapping standpoint that we're working to continue to influence. At the moment, there is a little bit of a gap in terms of the subsidies provided for battery charging vehicles versus battery swapping vehicles and having government policy lined up to really support electrification. And not only battery charging, but battery swapping electrification is really important. So that's something that we'll continue to work with the India government on. India, as Henry said, is the largest two wheel market in the world. And so it is an important market for us. But what's really critical is that we find a nuanced way to enter that market and that we find the right locations, the right partners, the right government policy before we seek to really grow fast.

Thank you, Bruce.

So, at this time, there seems to be no further questions in the queue or online. At this time, I will hand the conference back to Henry for a few closing remarks.

We're heading back to our core beliefs and vision for enabling mass transition of gas powered scooters to smart electric smart scooters. This is what our battery software network was created to do. We have strength to build on and our problem is possible and in our control. Overlook's next phase of growth must leverage these existing strengths and focus on taking care of our riders, simplifying our business and delivering an unparalleled factory swapping experience. Our business begins and ends with delighting our customers. Thank you for your support of Gogoro and thanks for calling into today's call.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.