Hello, ladies and gentlemen. Thank you for standing by for the second quarter 2026 earnings conference call for Xpeng Inc. At this time, all participants are in listen-only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Alex Xie, head of capital markets of the company. Please go ahead, Alex.

Thank you. Hello, everyone, and welcome to EXPO's second quarter 2026 earnings conference call. Our financial and operating results were issued via our news file services early today and available online. You can also view the earnings press release by visiting the IR section of our website at ir.xiaopeng.com. Participants on today's call from our management team will include our co-founder, chairman, and CEO, Mr. He Xiaopeng, live chairman and president, Dr. Brian Gu, and Vice President of Finance and Accounting, Mr. Jiaming Wu and myself. Management will begin with prepared remarks and the call will conclude with a Q&A session.

A webcast replay of this conference call will be available on the IR section of our website.

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All of these statements involve inherent risk and uncertainty. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that EXPO's earnings press release and this conference call include the disclosure of unaudited gap financial measures as well as unaudited non-gap financial measures. EXPO's earnings press release contains a reconciliation of the unaudited non-gap measures to the unaudited gap measures. I will now turn the call over to our co-founder, chairman, and CEO, Mr. He Xiaopeng. Please go ahead.

Hello, everyone. I am very happy to share with you all that we have just announced the first-person financing of the human-based inheritance business under the Xiaopeng Group. Xiaopeng's inheritance business will be financed with a capital of more than $63 billion or more than $9 billion. This is to refresh the private financing record of the Chinese human-based inheritance industry. This round of financing was initiated by the top investment institutions in the world, including ITG, Yintou, Kaolong, and Chantou. At the same time, we received a lot of support from Tencent and Ali, two strategic investors. The first round of financing and valuation have broken the record of the industry, so it fully reflects the leading position of the capital market for Xiaopeng in the field of physics and AI, technical guidelines, and the high level of production capacity and long-term commercial value. I believe that agriculture not only provides sufficient funding support for high-end, universal, renewable energy production and development, but also makes us accelerate our progress towards the physical AI-based GDPR moment. It will also bring more strategies and resources to the expansion of the ecosystem and application scene of the infrastructure business. I believe that Xiaopeng, as the leading physical AI company in the world, will not only lead the global scale of applications and business development,

Good evening, everyone. I am pleased to share with our shareholders and investors that we have just announced the first round of financing for Xpeng Robotics business. The business raised over US$900 million at over US$6.2 billion post-money valuation. This round was initiated by leading global investors led by IDG Capital with participation from Gaorong Ventures in support from Tencent and Alibaba as strategic investors. Both the size and valuation of the first round of financing have set a new private financing record in China's humanoid robotic industry. underscoring the capital market's strong endorsement of Xpeng's leadership in physical AI, technology roadmap, ability to manufacture at scale, and long-term commercial value. The financing will provide ample capital to support the mass production and continued development of our advanced general-purpose humanoid robots, IRAM. will accelerate our progress towards the chat GPT moment for physical AI, whilst bringing additional strategic resources to strengthen the robotics ecosystem and expand real-world applications. As a global leader in physical AI, Xpeng will not only lead the large-scale deployment and commercialization of autonomous driving worldwide, But also build the world's most valuable humanoid robots company. Today, we're very happy to see that we have taken another important step towards that goal.

从今年的6月份开始,除了担任小鹏的CEO外, 我还亲自负责继承业务的CEO。 小鹏在过去12年始终坚持软件和硬件的权占资源, 已经为物理、 and many more. We are now able to mobilize the advantageous resources of the whole group to work together to accumulate the car business, such as the supply chain, the manufacturing and global layout of the car class, as well as the auto-driving business, such as Turing AI chip, AI Infra, the underlying capabilities of data, the mechanical model of the physical world, and other integrated applications. I believe it will definitely help Xiaopeng to realize Liangtan and Shangyi Huang.

Since June, alongside my responsibilities as CEO of Xpeng, I have also taken up on the role of the CEO of our robotics business. Over the past 12 years, Xpeng has remained committed to full-stack in-house R&D across both software and hardware, building a solid technological and commercial foundation for the physical AI era. We are able to bring together and integrate the strengths and resources of the entire group. These include the supply chain, automotive-grade manufacturing capabilities and global footprint developed through our automobile business, as well as the Turing AI chips, AI infrastructure, and world foundation models developed through our ADAS business. By applying these capabilities to our robotic business, I believe that we can accelerate the mass production and commercialization of X-PONES humanoid robots.

Xiaopeng's machine development has been eight years. As time goes by, I see more and more high-level, user-friendly machine technology challenges and creativity difficulties. I believe it's possible to make the foundation a success. I believe that Xiaopeng Jiaming Wu may be the only company of Jiaming Wu among all Jiaming Wu companies in China. Because of this, I believe that Xiaopeng's Allen is fundamentally different from the current market. In many aspects, we all have unique capabilities and overall balance.

We have been conducting our research and development in the area of robotics for more than eight years, and I have always believed that the technological challenges and level of innovation required for advanced general-purpose humanoid robots are far greater than those for smart EVs by at least 20 times. To accomplish something that is this difficult, we need to have a broad and deep R&D and system integration capabilities Thank you very much. This is why Xpeng IRON fundamentally stands apart from other humanoid robots currently on the market with differentiated capabilities across multiple areas.

At present, the technical station of Xpeng IRON has fully covered the infrastructure, including the main body, the big brain, the small brain, the data, and the relevant sound. In terms of the main body, Xpeng IRON has industry, Thank you for your attention. Currently, our full in-house technology stack covers IRON's body, brain, cerebellum, data, and infrastructure.

On the hardware's front, Xpeng IRM features the industry's most human-like form and design. Xpeng pioneered the industry's first fully enclosed flexible lattice structure for IRM, combining aesthetic appeal with enhanced safety. With 76 degrees of freedom across the body and 21 degrees of freedom in each hand, both are at industry-leading levels. Xpeng has independently designed and developed an AI-native hardware platform and all core components specifically for embodied intelligence, including chips, controllers, motion modules, and dexterous hands. Leveraging our established smart EV R&D and manufacturing capabilities, we can achieve automotive grade quality and build the capability to manufacture and deliver at scale.

In terms of intelligence, Xiaopeng's AERON is equipped with three Fuling AI chips with an effective computing power of up to 2250 TOPS. I believe that this is the largest local machine in the infrastructure industry, Xiaopeng's physical AI model. We are currently in the final stage of deployment. We realized that we can automatically complete complex work with no need to shake. And ensure that the entire reasoning in the local is low risk and high data security. The high-level hardware platform is naturally equipped with stronger data-based advantages. It can take advantage of the behavior data generated by daily life of human learning and daily life, and it can quickly adapt to wide-ranging use scenarios designed for people, and even use tools. I believe that with Xiaopeng Erlang's leading limited-edition application, we will also get a lot of real-time data and human-like visual data. In terms of intelligence, XPAR IRON is powered by three Turing AI chips.

delivering effective computing power of up to 2,250 TOPS. With the industry's highest level of edge computing power, Expon's Physical AI Foundation model runs directly on IRON, enabling it to autonomously perform complex work tasks without teleoperation whilst ensuring low latency inference and data security. Irun's highly human-like hardware platform provides a natural advantage in scaling data. It allows us to maximize the reuse of behavioral data generated in people's everyday lives and rapidly adapt to a broad range of environments designed for humans. As Xpeng Irun moves ahead to mass production and real-world deployment, we will gain access to vast amounts of real-world and human demonstration data. We hope that Xiaopeng's AIRON

I will gradually show and introduce to everyone a series of different abilities of the public We plan to enter the mass production stage from the end of this year, and then start from Xiaopeng's store and district to start landing commercial scenarios. And in 2027, Xiaopeng Ailong will officially start to deal with the size of foreign customers in China and overseas in terms of sales and service scenarios. So next year's monthly production will quickly increase to thousands of dollars according to market demand. I think the technical threshold of high-level, comprehensive, and capable engineering is extremely high. The supply is also quite scarce. So, the income and labor contribution of each Allen in the full life cycle, including hardware sales and software AI modeling capabilities, will bring continuous income. Therefore, it will be much higher than the current single-carburetor and labor of the car industry. I expect that after the scale of the energy generation is mass produced, Xpeng Iron combines an exceptionally human-like design, the most intelligent AI brain, and the highest standards of safety and quality.

Only by doing so can IRM become a trusted companion to people and truly become part of everyday working life. We have recently achieved several major milestones in the development of the mass production version. Starting from September, we will unveil and demonstrate a series of distinctive capabilities. We plan to enter scaled production by year-end, with initial commercial deployments in expo stores and campuses. In 2027, Expo Era will officially launch and begin large-scale deliveries in China and overseas to external customers in the retail and service sectors. Next year, monthly production capacities can rapidly ramp up to several thousand units in response to market demand. I believe the technological barriers to advanced general-purpose humanoid robots are exceptionally high. Thank you very much. The commercialization of humanoid robots to scale rapidly in China and overseas following mass production, generating meaningful gross profit growth, supporting our investment in physical AI R&D, and further widening our technological lead.

回到汽车的业务,二季度,我们的汽车业务交付量为13,295台, 环比增长65%,并且早于行业的恢复进行同比增长。 In the face of the increasing pressure of the overall cost of the industry, our business continues to maintain stability, and has been able to break through in high-endization and internationalization. In the second quarter, Xiaopeng's net profit continues to exceed 20%. Among them, the technology luxury flagship Xiaopeng GS has been dragged out from a series of large six SUV products listed this year. In July, China's domestic delivery amount exceeded 7,000 units and became more than 300,000 new members of the SUV market. are the top three celebrity products. The first SUV product of the Mora series, the L03, was released last time and became an online brand. Its order broke all of Xiaopeng's history records. And even in the past July and August of the third quarter, we can see that the added capacity of Xiaopeng's cars has increased by more than 50%, creating a new height of history. I believe that due to the extreme weather and the impact of the supply chain, the current speed of our production capacity is indeed affected by the speed of delivery. So again, I am very, very grateful to the car owners for their patience. We have already started the double production of Mola L03 and are currently trying our best to accelerate the production capacity with our supply chain partners. I believe that the delivery of L03 will definitely increase significantly in the next few months and continue to increase.

Now, I would like to come back to our automotive business. In the second quarter, our vehicle deliveries reached 103,295 units, up 65% quarter over quarter, and we achieved year-over-year growth ahead of the broader industry. Despite industry-wide cost pressures, our operations remained resilient. Supported by our progress in the premium segment in international markets, Company's growth margin remained above 20% in the second quarter. Our tech-defined luxury flagship model GX stood out among a wave of large six-seat SUVs launched this year. Domestic deliveries exceeded 7,000 units in July, making it one of the top three models in China's NEV SUV segment, priced above RMB 300,000. Mona L03, the first SUV in the Mona series, became a breakout hit immediately after its launch, with orders setting a new record for any expo model. In the third quarter, new uncancellable orders increased by 50% quarter-over-quarter to a record high. Extreme weather and supply chain disruptions affected our pace of ramping up and delivery. Here, I would like to especially express my sincere appreciation to our customers for their patience. We have started two shifts of production for the Mona L03 and are working closely with our supply chain partners to accelerate the capacity ramp. I expect that the L03 deliveries will increase substantially over the coming months and continue to trend upward.

The success of GX and L03 will make us more confident about the following products. We will transform the advantages of intelligence, appearance, quality, etc. into higher sales targets and stronger brand. Our five flagship models, G9L, will be officially launched and launched in September. At the same time, in the fourth quarter, Xiaopeng Mola's L05 will also be launched in China. The success of the GX and the Mona L03 gives us more confidence in our upcoming models.

We are translating our competitive strengths in the best-in-class intelligence and standout design into higher sales targets and stronger brand momentum. Our flagship five-seat SUV, the G9L, will officially launch and begin delivery in September. The Mona L05 will also launch in China in the fourth quarter. With the launch of four brand-new SUV models, we will cover all major SUV segments. We believe X-Point's deliveries to increase significantly in the fourth quarter, with monthly deliveries targeting more than 60,000 units.

Globalized business is the second curve of Xiaopeng's growth. It will also be an important driving force for profit improvement. In the second quarter, our overseas sales were the first to break through 20,000 units, which is 81% of the total. In the first half of this year, Xiaopeng's overseas business has broken through 25% in terms of sales, and has achieved very high operating quality, with an average price of more than 40,000 euros. Single-car income and single-car horsepower, I believe, are at a leading level in China's car industry. In July, after Xiaopeng's M03 was released to the global market in Germany, it received attention. Among them, I believe that the L03 will become Xiaopeng's first large-scale product in the global market. And we expect to start delivering in the fourth quarter, prompting the company's overseas quarter sales to break through 40,000 units. In 2027, we will also launch many new models overseas, including the real car model.

Our international business is the second growth engine for Xpeng's automotive business and also an important driver of improving profitability. Overseas, quarterly deliveries exceeded 20,000 units for the first time in the second quarter, up 81% year over year. In the first half of the year, our international business accounted for more than 25% of total revenues. Furthermore, our overseas operations boast exceptional quality, with an average selling price of our exports exceeding €40,000, placing our per-value revenue and gross profit at the forefront of Chinese automakers expanding globally. Since its global launch in Munich in July, The Mona L03 has attracted significant attention and earned high praise from overseas consumers for its intelligent technology, distinctive styling, and spacious interior. I believe Mona L03 will become Expo's first major model to achieve leading sales across multiple international markets. Overseas delivery of the Mona L03 are expected to begin in the fourth quarter. driving firm-wide quarterly overseas deliveries to exceed 40,000 units. In 2027, we will also introduce multiple star models including extended range EV models in overseas markets, further expanding our geographic coverage and market share.

从8月底开始,我们的第二代VA大模型将会迎来首次重大的升级 We have once again verified that Scalino has brought a huge improvement in experience, safety, and versatility. In this new version of 6.3, our model parameters have been expanded by 3.5 times, and the number of common models in the industry has been greatly increased. The new version has also increased our sense of sensitivity by 300%, and introduced super-long-term reasoning and prediction capabilities. The evidence of operation has also made it even more advanced in the industry, making the AI driver look accurate, think fast, and respond quickly. And this time, our new version is also the first to achieve it. VLA plus VLM's self-sufficiency joint will also put some of Xiaopeng's RoboTaxi's L4 experience down. For example, it can be customized by voice. So I believe that the second generation of VLA can maintain its own price.

Starting from end of August, we will roll out a major upgrade to VLA 2.0. Once again, validating the scaling law in ADAS and delivering substantial improvements in both user experience and safety. With the new 6.3.0 major version, The number of parameters in the VLA 2.0 undevised model will increase by 3.5 times, putting its parameter count in order of magnitude above that of small models commonly used in the industry. The new version delivers a 300% improvement in perception sensitivity, introduces ultra-long horizon reasoning and predictive capabilities. and operates at an industry-leading frame rate. This enables the AI driver to see accurately, think ahead, and respond quickly. The new version will also integrate ADAS and smart cockpit capabilities powered by VLA and VLM, bringing selected L4-level capabilities developed for Xpeng Robotaxi to our passenger vehicles. One example is voice-activated pullover parking. Users simply give a voice command, and VLA 2.0 will autonomously find a suitable roadside parking space and park the vehicle without exiting ADAS mode.

In recent years, my colleagues and I have been working in China, the U.S., Australia, and Europe, and we have developed our own VLA, and we have developed our own VLA, and we have developed our own VLA, and we have developed our own VLA, In this situation, Xiaopeng's second VIA and our friendly products have been priced at the same price. But in the small road, the parking lot, the inner park, Xiaopeng's new VIA 6.3 version experience will obviously be better. Our support can be done directly from the navigation to the parking lot. High efficiency and safety. I believe that with the improvement of the algorithm and the model, Recently, together with my colleagues,

We test drove Expon's VLA 2.0 and the latest ADAS from a leading global peer in China, Europe, and North America respectively. In my view, VLA 2.0 is already on par with the world's leading ADAS on major roads. In narrow roads when negotiating, as well as in campuses and parking facilities, the user experience delivered by VLA 2.0 is even better can navigate directly to a parking space with both efficiency and safety. I believe that as we upgrade computing power and model capabilities, VLA 2.0 will develop even more powerful capabilities over the next several version upgrades, delivering an L4-level ADAS experience in mass-produced vehicles, surpassing peers, and establishing a generational lead.

At the same time, we are doing our best to accelerate the deployment of the second generation of VLA around the world. Recently, my team and I completed the localization of VLA in Germany. To be honest, I was very excited at that time, because our model almost did not increase in the case of localization training data, but it reached a high level of experience in Germany and China. I think this is much better than and many more. Our goal is to take the lead in the next three hundred years of the year in Europe and start delivering the second generation of VR to overseas users in more countries. We hope that global users will enjoy a safe, comfortable and convenient self-travel experience. After the second generation of VR has landed overseas, We continue to enhance VLA 2.0's model capabilities whilst accelerating its global deployment. Recently,

My team and I completed on-road validation of VLA 2.0 in Germany, and which was particularly encouraging was that the model, primarily trained on data from China, performed nearly as well on the European urban roads as it did in China, with almost no additional local training data. We aim to obtain regulatory approval for VLA 2.0 in Europe in the first half of next year and roll out VLA 2.0, bringing a safer, more comfortable, and more convenient driving experience to users worldwide. After deploying in overseas markets, VLA 2.0 will compete directly with the world's leading ADAS and become Expo's defining competitive advantage for our global products. At the same time, we will actively explore new software-based business models, creating a positive cycle in which commercialization and technology development reinforce each other.

截止到现在,搭载VIA的全装量产的RoboTest 已经在广州完成了超过2000次的内测订单 并且我们跑通了载能示范运营的全流程 这为迈向商业化运营 We have recently completed the platform development of cloud access. Our goal is to implement the customer operation without a security source next year. In 2027, Xiaopeng will continue to improve the technology and cost competitiveness of NovoTaxi, and we will cooperate with the leading travel platforms in China and overseas to quickly expand the business scale in China and overseas.

As of now, our pre-installed, mass-produced Robotaxi powered by VLA 2.0 has completed more than 2,000 internal test orders in Guangzhou and validated the full end-to-end process for trial passenger operations, laying the groundwork for commercial operations. Recently, we have completed the development of our cloud remote takeover platform, and our goal is to begin passenger operations without a safety operator in the car next year. In 2027, Xpeng will continue strengthening the technology and cost competitiveness of our robotaxi, while partnering with leading domestic and international mobility platforms to expand our robotaxi business across key cities In China and around the world, this will create greater commercial value through vehicle sales, technological services, and revenue sharing from operations.

At the same time, we believe that Xiaopeng's physical AI technology does not only need technical breakthroughs, but also needs to create an open, cooperative, and multi-party technology and commercial development. In order to accelerate this, In the meantime, we believe that the large-scale application of the physical AI requires more than technological breakthroughs.

An open and collaborative technology and business ecosystem that creates a value for multiple participants is equally important. To accelerate the commercialization of physical AI, we recently established a group-level business development team within the group and are actively engaging with partners in China and overseas to bring our industry-leading Turing AI chips

VLA 2.0, Robotaxi, and Humanoid Robots Technologies to Global Markets More Quickly I expect that in the third quarter of 2026, Xiaopeng's delivery volume will be about 11.5 million units to 12.1 million units, with a growth rate of 11.3 to 17.1 million units. The estimated revenue will be about 271 billion yuan to 234 billion yuan, with a growth rate of 9.9% to 18.5%. I believe that from the second half of the year, Xiaopeng will be able to improve the market power brought by multi-business consensus. Not only the domestic and overseas sales of cars will rise, but we also believe that our autonomous driving will form a bigger leading line and begin to lay the groundwork for high-end autonomous driving in the world. I also expect that we will first achieve high-end For the third quarter of 2026, we expected deliveries to be approximately 115,000 to 121,000 units.

representing quarter over quarter growth of 11.3% to 17.1%. Revenue is expected to be approximately RMB 21.7 billion to RMB 23.4 billion representing quarter over quarter growth of 9.9% to 18.5%. I believe Xpeng is entering a period of accelerating momentum across multiple business in the second half of the year. Both domestic and overseas vehicle deliveries are expected to reach new highs. We are also expected to be among the first globally to achieve a scaled mass production and commercialization of advanced general purpose humanoid robots. We also expect to be among the first to deploy advanced data technologies in overseas markets, and we will establish new business models around the physical AI ecosystem, creating greater value for customers and shareholders worldwide.

Thank you, everyone. Next, we have our financial VP, James, to introduce the financial situation of our second quarter of 2026.

Thank you, everyone. With that, I will now turn over the call to our VP of Finance, James, who will walk you through our financial performance for the second quarter of 2026.

Thank you, Xiaopeng. Now, let me provide a brief overview of our financial results for the second quarter of 2026. I will reference RMB only in my discussion today, unless otherwise stated. Our total revenues were $19.74 billion, for the second quarter of 2026, an increase of 8% year over year, and an increase of 51.5% quarter over quarter. Revenues from vehicle sales were $17.05 billion for the second quarter of 2026, an increase of 1% year over year, and an increase of 55% quarter over quarter. The quarter over quarter increase was mainly attributable to higher vehicle deliveries. Revenues from services and others were $2.7 billion for the second quarter of 2026, representing an increase of 93.9% year-over-year and an increase of 32.6% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were primarily attributable to the increased revenues from, first, technical R&D services rendered to the Volkswagen Group due to the successful achievements of certain key milestones and secondly, parts and accessory sales. Gross margin was 20.7% for the second quarter of 2026 compared with 17.3% for the same period of 2025 and 20.6% for the first quarter of 2026. Vehicle margin was 12.1% for the second quarter of 2026 compared with 14.3% for the same period of 2025 and 12.1% for the first quarter of 2026. The year-over-year decrease was primarily due to the production generation transition. R&D expenses were 2.91 billion for the second quarter of 2026, representing an increase of 32.1% year-over-year and an increase of 0.3% quarter-over-quarter. The year-over-year increase was mainly due to higher expenses related to the development of new vehicle models and AI related technologies as the company expanded its product portfolio to support the future growth. SG&A expenses were $2.5 billion for the second quarter of 2026, representing an increase of 15.2% year over year and an increase of 32.5% quarter over quarter. The year over year increase was primarily due to higher marketing and advertising expenses The quarter-over-quarter increase was primarily due to the higher commission to the franchise stores and higher marketing and advertising expenses As a result of the foregoing, loss of operations was $1.14 billion for the second quarter of 2026 compared with $0.93 billion year-over-year and $1.87 billion quarter-over-quarter That loss was $1.34 billion for the second quarter of 2026 compared with net loss of 0.48 billion year-over-year and net loss of 1.7 billion quarter-over-quarter. As of June 30, 2026, our cash position was $40.48 billion. To be mindful of the length of the earnings call, I would encourage listeners to refer to our earnings press release for more details on our second quarter 2026 financial results. This concludes our prepared remarks. will now open the call to questions. Operator, please go ahead.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. For the sake of clarity and order, please ask one question at a time. Management will respond and then feel free to follow up with your next question. Your first question today comes from Tim Sal with Morgan Stanley. Please go ahead.

Hello, Manager Chen. I'm Tim from Moment Stanley. Thank you for accepting my question, and congratulations on the project of Qixia R&D Robot for a very bright and sustainable financing. I have two questions related to robots. The first question, I would like to follow up. Maybe Mr. Xiaopeng mentioned in the briefing that the current robot R&D plan is to use a large-scale production at the end of this year. I'd like to ask about the overall production capacity of the project. As mentioned, it will reach a few thousand units next year. In addition, what is the overall delivery target for 2027? Because we may also do financing, so I'd like to ask what the basic assumption is. This is my first question. So my first question is about volume and production target. So what is the projected production capacity for expanse humanoid robot iron upon entering commercial mass production by late 2026? And what is the target delivery volume for fiscal year 2027? That's my first question.

Thank you. I'm Xiaopeng.

I think In terms of production capacity and the production capacity of the car, there is still a big difference in our perspective. The supply chain of the car's production capacity is very wide and deep, but Xiaopeng's Allen's machine is actually not only fully self-sufficient from many angles, but also very deep in terms of autonomy. So I believe that the real machine can finally enter the challenge of mass production capacity. Thank you for your question. This is Xiaopeng speaking. In terms of robot capacities in hand versus automobile capacities, from our perspective, we do think that there is quite a large difference between those two.

I think that when it comes to the capacities of the supply chain of robots, it is rather broad and deep. But in our company, we emphasize on multiple areas of full-stack research and development. And I think when it comes to about the challenges of capacities, in the early stage, it is about the quality, and in the later stage, it is about the sales.

We plan to enter the mass production stage at the end of 2026. After mass production, we will begin to rescue and first use the children's I-LAND machine in children's stores to start landing commercial scenarios. In the first half of 2027, we will start from free commercial scenarios and digital scenarios, and will continue to accelerate the launch of external delivery. We will continue to accelerate our productivity in the middle of the year and the second half of the year. Then we will expand to thousands of units according to the demand of the market, even higher productivity. So in 2027, Xiaopeng, Alan, you help me turn it over first.

In terms of mass production for 2026, we expect that by year end of 2026, we will see mass production at scale kicking in. For iron, this product, we believe that we will see the commercialization of the robot itself first starting with our stores and in 2027 we will see that the commercialization will take place in the different areas of our own self-operated scenarios and rolling out as well as picking up the speed to external commercialization and user case scenarios. In terms of R&D and I think that we are looking at Starting from the mid and the second half of next year in 2027, we will pick up the R&D development and the mass production units will be at multiple of several thousand units per month and further picking up the speed.

我最后想补充一小段就是说,因为小鹏的IRON,它的交付是面向零售服务业场景, and China and overseas will gradually start to deliver. So our delivery volume must be as real as a car. And we will be with the industry and other small and medium-sized companies in the commercial scene. For example, the self-sufficiency ability on the island is completely different. I believe that the real delivery of these abilities will see faster that there are more people in different positions in the industry and move towards more comprehensive commercialization.

One final part that I would like to supplement which is that for the IRON robot deliveries and this will mainly be rolled out in the areas of retail and services both in China and abroad and same as our automotive business the delivery of our robots and sales will be authentic and genuine data and the figures that we will share In terms of the quality of our robots, the services that it can provide, I believe that versus the other peers out there in the market when it comes to either the shopping assistance perspective or the intelligence level, we will definitely be better and stronger than the others, as well as to be able to be used in a more wider and broader, more adaptive environment.

My second question is about the unit economics and the margin profile. So what is the estimated unit cost for the mass production variant of iron? And what go-to market pricing strategy does management intend to deploy? And what is the anticipated gross profit margin trajectory, especially after the full-scale ramp? That's my second question. Thank you.

Okay, thank you. Because the entire mass production of iron For the integration of innovation, for quality, for productivity. So we independently designed and developed all the raw hardware platforms and software systems. Then the entire supply chain business, the supply chain cooperation business also has more than 85% of the current Xiaopeng in terms of equipment. So we believe very much that the cost competitiveness of the final Xiaopeng machine in the industry is definitely leading. In China, we see that the price of products in the automotive industry is usually different from that of the car. It is usually 2.5 to 3 times as much as the TABLOS BOMB. And Allen itself is positioned in the general automotive industry. I believe that it has a very wide range of pricing spaces. Its supply is also quite scarce. So I believe that its hardware horsepower will be much higher than that of our current automotive business. Thank you for your question. With respect to the mass-produced robots, I think that we are looking at it from the perspective of

Thank you very much. I believe the cost of our robots, iron robots, competitiveness, will definitely be leading in this area. At the moment, in terms of the pricing for robots in the market, generally speaking, it's about 2.5 to 3 times of the BOM material. For Airon, given that this is a general-purpose robot, hence there is a very limited supply in the market, and I do believe that for our growth margins of the hardware, it will definitely be better than the existing automotive business. In the meantime, not only that we are relying on the sales of the hardware, There will also be sales of our different models and the software services, subscriptions, etc.

These, we believe, will all bring in profits for our business. Those conclude my answers to your questions. Thank you.

Thank you. Your next question comes from Ming Sun Li with Bank of America. Please go ahead.

Which part of your robot foundation model can be highly synergistic with automatic driving? which modules are shared and which are developed relatively independently.

Thank you.

In fact, in the industry, many people say that a machine may need a big brain and a big mother. Maybe this can be done many years later. But I think it is completely impossible at the moment. There are three main models of different directions. One is a super fast model. For example, 100 to hundreds of frames per second. One is a medium speed model. For example, about 10 to 20 frames per second per second. For example, the model of automatic driving. The other is a slow model. It is a model of thinking. For example, one frame per second per second. So the current model in Xiaopeng's car, like VLA, like our The multi-modal model, VLM, is similar to most of the models in the machine. For example, VLA is currently being developed in non-travel roads, for example, the slow-moving function of the underground parking lot. It is the same logic as the slow-moving function of four types of robots in the future. At the same time, we also see that there are some models in the machine that will have value in cars in the future. There are many interesting models in the machine, such as full-body operation models, such as models with multiple safety systems, such as safety models for data privacy, safety models for falling or power out. Thank you for your question and in order to answer this question in our industry

For instance, many people will say that in robots, generally, all they need is one brain and one large model. That will be enough. Perhaps this is possible many years later, but I don't think that is viable as of now. In terms of the different large models, and there are different types. For instance, we have the super-fast models, and those are operating at There are these medium speed models, large models, which are operating at 10 frames to 20 frames per second. And there are also the slow ones, the slow large models. We call them the thinking large models. They operate at one frame per second. When it comes to the VLA and the VLM, and for instance, those are the ones adopted in our automotive business, I believe that there are similarities. And for instance, the currently VLA adopted in the automotive business when it comes to the roaming in non-planned roads, that will be quite similar to the roaming or moving around of the robots. For robots, on the other hand, I also believe that some of the thinking capabilities of robots, such as on the open platform next year, can also be put into use for our Xpeng's automotive business. So you can see that there are definitely some synergistic commonalities there. In the meantime, there are also some unique perspective and the point of the robots and such as the different mode for safety. And for instance, there are the models of safety such as data privacy and the safety about prevention of falling and data safety about lack of running out of electricity, etc. So as you can see, there are commonalities and all of these features we are developing under the large exponents system altogether. And even so, if we look at the further underlying system and there are many other areas that are quite dissimilar, for instance, the generation of the generative models and as well as the and the simulation models, etc. So those are the similarities.

Thank you. My second question is...

I would like to add that in addition to the model, in fact, whether it is AI sound, data control, or organizational sound, in fact, these two lines are shared. Okay, thank you.

Sorry, before you move on to your second question, and I would also like to supplement that. Apart from the models in hand, whether it is about the AI applications or the applications of the overall architecture and structure, and these are also the ones that we do share across the two different parts of the business.

Nice. What differentiated advantages does X-Point have in robot data collection, training, and closed-loop iteration? What differentiated advantages does X-Point have in robot data collection, training, and closed-loop iteration?

Yes, thank you. Very good question.

I think data is going to be a very important core and a core value of physics. So many people say that if the machine has enough data, it can do very well. It may be a necessary condition, but it must not be a complete condition. There are a lot of companies that do this kind of value today, but there are very few companies that can do this kind of value well. So I believe How to use the data well, including its quality, diversity management, and training is the most important thing. So I think Xiaopeng's data in Jicheng and Xiaopeng's data on the value of automation, I think one of the very core important things is that Xiaopeng has a long 10-year experience of automation, research and development, data experience, and we have formed, I think, From the end of this month, our version has achieved the most advanced capabilities in the industry. I think this is the most important seven times. The management of our robot data, the training of data, the entire sound system of data, and the car of Xiaopeng are completely developed in a system. We are just collecting data, collecting hardware and other series of things, which is different from the car. So I very much believe that our data from collection to use are all very strong. So with Xiaopeng Allen's first mass production, I would rather think that Xiaopeng will collect more real-time data and human-used Allen. The four data he needs. So all of this data, we are all high-quality data. I think today a lot of low-quality data values ​​will make the whole Thank you for all your answers.

Thank you that is a great question and I do believe that in terms of the physical AI and in the future and data is of course the key many people say that as long as you have enough data and that will help with the integration of the services it is a necessary condition however it is not yet the full condition and what we would see is that For Xpeng, what we are good at is that we have much better data and the training of the data, we also have a higher quality of the data. For Xpeng, for instance, we have been in the area of autonomous driving for over 10 years. Within not only our R&D for the past over a decade of experience, as well as the data that we have collected, we are absolutely leading in the industry among our peers. In terms of the robots, it is the same. For the robots' data management, data training, and data quality, all of these are being developed under the same ecosystem at our company. And I believe that apart from the hardware being different in terms of the collection of the data, and all the way to the application of the data at our company for our two different lines of business would be the same. For IRON, again, once these products become mass-produced and launched into the market, not only that, we will be further continuing to collect real-world data as well as the human-demonstrated data which are both are all sets of high-quality data, and this will further drive the development and R&D of our products. And this is different from the low-quality data, which are not helpful at all. So I believe that by having all of these, we'll actually be able to create a flywheel of the high-quality data and the R&D that we are conducting and continue to contribute to the development of our products. That's all my answer for your question. Thank you.

Thank you, Xiaopeng. That's all my questions.

The next question comes from Jeff Chung with Citi. Please go ahead.

Thank you, Mr. Xiaopeng and Mr. Guan. Thank you for the opportunity to ask this question. My first question is about why Xiaopeng chose Shandao, which is a commercial island, as the first landing site. Who are the target customers? Why did they buy ION? My first question is about the why did Xpeng Robotics select the salesperson, the tool guide scenario as the initial real world deployment, who are the target customers? Why would customers buy ION? And most importantly, are there follow-up plans to expand into industrial and home use cases? Thank you.

Thank you. In fact, Xiaopeng's foundation and many other companies' foundations have very different business scenarios. Many people say that they come from factories or families. and 2B. We think the target customers are big C, small B. We think it comes from the business. Of course, after the business, we will also enter the industry and families. We will use a very, very small number of SKUs to achieve such a scene. So why do we start from the business? I think one of the most important capabilities is that we put our robot and others. We think that in China and overseas business systems, it is most likely to integrate the four capabilities of Xiaopeng, including the ability of the body, the ability of the environment, the ability of our business, and the ability of our entire emotional value. We think that commercialization is most likely to serve and many more. Of course, we will start from a small part of the industry. At the same time, we will open our ILEM. When we use it, we will open SDK to support app development and expansion of ecological functions. So these are the things we will do in the next stage. Then through business cooperation, we will see that Xiaopeng's foundation can share Xiaopeng's overall channel and create new online sales channels. Then our customers Thank you very much for your question. For XPoint's robots, yes indeed, when it comes to commercialization, we have gone down a different route versus other competitors.

Many other competitors, they are focusing on breaking into the market by ways of entering into factories, home usage, and mainly for to-be business. What we are looking at is that we are focusing on the large-scale Cs as well as the small and medium Bs. And that is, so to speak, we start entering into the market with the business commercialization cases followed by industries and home uses at a later stage with the smaller SKUs. The reason we have picked the salespersons and tour guides, et cetera. It is because that we believe both in China and abroad and that there are four major comprehensive capabilities of our robots that are very helpful and would be able to will be reflected very well in these sectors. And the four comprehensive capabilities are as follows. Number one is the main body and the main hardware of the robot itself. Number two, the environment. Number three, the business that it provides. And number four, the emotional values that it brings. Therefore, starting from commercial usage cases and starting from the and many other small and medium-sized business industries that we go into. And later on, with IRON, of course, when it starts opening up the market and we will also open up SDKs to enable secondary development as well as further expand its user cases. With these commercial use cases, scenarios for collaboration and we believe that this will also open up more channels for experts in robots business not only for offline sales but as well as for online sales so that our customers would be able to see the use cases for our robots and not only for the big customers but as well as for the small and medium business. So this is our thinking in the regard and which is different from our peers.

The second question is about the latest progress on the company's self-developed death stress hand. What overall design approach has been adopted and how does it compare with peers in terms of performance and cost? Thank you, Xiaopeng Zong.

Yes, I think the first one is a very important component of the robot company. It has a set of hardware, a set of senses, and three sets of software capabilities. We all chose this in hardware and software. I think what we are very lucky is that our Linqiaosou's development is very smooth. We will carry out mass production at the end of this year, just like Allen's machine. And not only did we develop, we also invested a lot of work in the production and manufacturing of Linqiaosou. Our Linqiaosou will use a straight line. Each hand has 21 degrees of freedom. Our size, thickness, are basically the same as the real hands of adults. So I believe that our clinical hands are at the forefront of the industry, such as the ability to hold and grasp the weight. We don't use the fitness hands that many people are discussing in the industry now, because we think it is not an excellent choice at the moment. So when we are doing hands, Thank you.

Thank you very much for your question. And yes, indeed, dexterous hand is an extremely important part for robots. And for our robots, we have one set of hardware, one set of software, as well as three sets of different perceptive systems. In terms of the specific mass production plans, we will be communicating with the enemies by year end. We are not only just conducting the R&D of the dexterous hand and we have also invested greatly into the manufacturing of the processing of dexterous hands as well as the equipment in this regard. The dexterous hand for our robot hand, we have 21 degrees of freedom as mentioned earlier. In terms of the size of the product of the dexterous hand, it is the exact same size as the hand of an adult. And when it comes to the load-bearing capabilities as well as the grasping and gripping, we believe that our dexterous hand is in the leading position versus the other peers. I know that in the industry that people often talk about another type of hand and we do not think that is the smart choice to go for. We are not focusing on the force or the accuracy itself of a dexterous hand and what we are focusing on rather is on striking a good balance of safety, reliability, easy to maintain and cost. And for instance, our Dexter's hand also has a very nice set of skin that is very similar to the human hand.

Your next question comes from Nick Lay with JP Morgan.

Please go ahead.

Okay, thank you. Let me ask you a question. I have a question about the business of ADAS VLA. Xiaopeng said that VLA 2.0 will be released overseas in 2020. I want to know what kind of vehicle plans will be released in the beginning, or will the VLA 2.0 technology be available before it is released overseas? First question is really about the analytics technology. Chairman He mentioned that in first half of 2027 we will start to deploy a model in overseas market starting from Germany with VLA 2.0 technology. I wonder how many models will be equipped with such technology in overseas market and also can we elaborate a bit more about our business model including subscription and one-time payment strategy in overseas market essentially.

Thank you, because the signal is not very clear, so I can only hear it roughly, and then I will reply quickly. I want to say that the L03, which is equipped with Turing chips, is currently on the market overseas. Then, after that, all of our cars will be released overseas, and we will have our Ultra version. This is the first thing I want to say. Then, it means that our hardware capabilities of VLA will cover all of the models and markets after L03. Our current progress is very smooth, in fact, including the preparation of the rules just mentioned, and we started the relevant testing in localization. We are indeed exploring the commercial software subscription business model, so we will announce it in the second half of the year, and we are also setting up a related BD team. Currently, there are already many partner partners discussing with us Thank you very much for your question.

Given that the signal wasn't coming through very clearly and I could only hear some keywords of your questions, so I'll try my best to answer your question based on what I have heard. Number one, with respect to the Turing AI chips, and this has already been deployed to our L03 vehicles for the one start, which are launched to the overseas market as well, and all of these will have the ultra version. for VLA and this will be deployed in L03 models across all different markets and in the meantime we're also catching up and working with the compliance and local laws and regulations and localization work testing all of these are being done at the same time in tandem and in the meantime we are looking at for instance about the subscription service of the software for our customers, and such updates will be announced and shared with you all in due course. We have also established another BD team, and this team is actively discussing with our partners with respect to the VLA usage or even further expanded into other areas. Thank you.

Your next question comes from Tina Hu with Goldman Sachs. Please go ahead.

感谢给我提问的机会。 第一个问题是想要问一下小彭总, 就是我们随着这个人行机器人的一个量产和推进, 包括也恭喜我们今天宣布的这个首轮融资, 想问一下咱们对人行机器人整体一个盈利性的一个展望, What is the time point? Or what is the mass production scale? On the other hand, I also want to ask if the company has a plan to split the profits of the humanoid robot and the car business into two businesses. In the future, it may be able to give investors and the market a clearer understanding of the two businesses in terms of finance. So my first question is regarding, so with the volume production of our humanoid robot product and also congratulations on the announced equity raising today. Just wondering what would be the expected timeline of profitability for humanoid robot business? Or in other words, what level of sales volume Thank you.

Hey Tina, it's Brian. Let me address your question. With regard to the financial outlook of the robotic business, I think it's a bit too early for us to comment. I would say we are now focused on the milestones that Xiaopeng shared, which is reach SOP for our robots for volume production capability by the end of this year, and also start deploying Thank you very much. On the probability, we anticipate the product of human robot will achieve much higher gross profit potential compared to the automotive business. In fact, I would say the hardware is already much higher than the automotive business. In addition to that, we think there will be and many more. Given the high probability expectation as well as much smaller investment in CapEx requirements for robotic business, I would say once volume rampant is achieved, I would say probability can become reality much faster than the auto business. So that's our projection. And also to answer your question regarding the potential separation of the businesses, At the moment, actually, the business are operating together. In fact, we have not started any separation of the business. We obviously, according to the announcement you saw, we actually have a period of 18 months that gradually allows to achieve a separation. But in the meantime, what we're going to be focused on is still achieving high degrees of synergy because we talked about leveraging the capabilities in AI, the capability of advanced manufacturing, powertrain, supply chain, so forth. So actually, the two businesses can both achieve high efficiency and greater capabilities. So with that, I think the near-term expectation is it will still be mostly viewed as together as business. And also as the volume production and also as the commercialization scenarios become more clear, we'll probably think about more likely separations. In any event, given the ownership structure, this business will be 100% consolidated. It will not impact our financials going forward, even though the business may start to separate based on the plan. So I think in short, we still see the group consolidating all the financials of the robotic business. At the same time, we'll really think about the most efficient and also most synergistic way to run the business. Thank you.

Thank you. That concludes the question and answer session. Now I'd like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact Expanse IR team through the contact information provided on our website for the peace and financial communications.

This concludes today's conference call. You may now disconnect your line. Thank you.