(MVST) 2023 Q3 法說會逐字稿

Thank you for standing by. This is the conference operator. Welcome to the Microvast third quarter 2023 earnings call. As a reminder, all participants are in listen only mode and the conference is being recorded. (Operator Instructions)

謝謝你的支持。這是會議操作員。歡迎參加 Microvast 2023 年第三季財報電話會議。提醒一下，所有參與者都處於僅聽模式，並且正在錄製會議。 （操作員說明）

I would now like to turn the conference over to Rodney Worthen, Microvast's Director of Investor Relations. Please go ahead.

我現在想將會議轉交給 Microvast 投資者關係總監 Rodney Worthen。請繼續。

Thank you, operator, and thank you, everyone, for joining us today. With me on today's call are Mr. Yang Wu, Founder, Chairman and CEO; Mr. Zach Ward, President; and Mr. Craig Webster, Chief Financial Officer.

謝謝運營商，也謝謝大家今天加入我們。與我一起參加今天電話會議的有創辦人、董事長兼執行長楊武先生；札克沃德先生，總裁；克雷格·韋伯斯特先生，財務長。

Ahead of this call, Microvast issued its third quarter 2023 earnings press release, which can be found on the Investor Relations section of our website at ir.microvast.com.

在此次電話會議之前，Microvast 發布了 2023 年第三季財報新聞稿，您可以在我們網站 ir.microvast.com 的投資者關係部分找到新聞稿。

In addition, we have posted a slide presentation to accompany management's prepared remarks. As a reminder, please note that we will be making forward-looking statements on this call. These statements are based on current expectations and assumptions and reflect our views only as of today. They should not be relied upon as representative of views for subsequent dates, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

此外，我們還發布了幻燈片演示文稿，以配合管理層準備好的評論。請注意，我們將在本次電話會議上發表前瞻性聲明。這些陳述是基於目前的預期和假設，僅反映我們截至目前為止的觀點。不應將其視為後續日期的觀點代表，並且我們不承擔根據新資訊或未來事件修改或公開發布這些前瞻性陳述的任何修改結果的義務。

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our annual reports on Form 10-K filed on March 16, 2023, and the 10-Q filed earlier today.

這些陳述受到各種風險和不確定性的影響，可能導致實際結果與預期有重大差異。有關可能影響我們財務表現的重大風險和其他重要因素的進一步討論，請參閱我們向SEC 提交的文件，包括我們於2023 年3 月16 日提交的10-K 表格年度報告以及先前提交的10-Q表格今天。

In addition, during today's call, we may discuss non-GAAP financial measures, including adjusted gross profit, adjusted net loss and adjusted EBITDA, which we believe are useful as supplemental measures of Microvast's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. These non-GAAP measures have been reconciled to their most comparable GAAP metric and the tables included at the end of our press release.

此外，在今天的電話會議中，我們可能會討論非 GAAP 財務指標，包括調整後毛利、調整後淨虧損和調整後 EBITDA，我們認為這些指標可作為 Microvast 業績的補充指標。這些非公認會計原則措施應作為公認會計原則結果的補充，而不是替代或孤立於公認會計原則結果。這些非公認會計準則衡量指標已與最具可比性的公認會計準則指標以及我們新聞稿末尾包含的表格進行了調整。

A webcast of this call will also be available on the Investor Relations section of our company website.

本次電話會議的網路廣播也將在我們公司網站的投資者關係部分提供。

And with that, I will turn the call over to Mr. Wu for opening remarks.

接下來，我將把電話轉交給吳先生致開幕詞。

Thank you, and thank you everyone for joining on today's call. I would like to start off with a high-level overview of the quarter before providing some operational highlights. I will then turn the call over to Zach Ward, our President, who will discuss additional operational updates and some of our key successes for the quarter; followed by Craig Webster, our Chief Financial Officer, who will discuss our financials in more detail.

謝謝大家，也謝謝大家參加今天的電話會議。我想先對本季進行總體概述，然後再提供一些營運亮點。然後，我會將電話轉給我們的總裁 Zach Ward，他將討論其他營運更新以及我們本季的一些關鍵成功；接下來是我們的財務長 Craig Webster，他將更詳細地討論我們的財務狀況。

I will then address our outlook for Q4 and the full year 2023 before opening the call up to questions. Please turn to Slide 4 as I cover a few highlights for the third quarter.

然後，在開始提問之前，我將闡述我們對第四季和 2023 年全年的展望。請參閱投影片 4，我將介紹第三季的一些亮點。

We posted a 107% revenue growth year-over-year in Q3 2023, delivering revenue of 80.1 million. This exceptional increase comes from incredible demand growth for our commercial vehicle business from customers in both Europe and Asia Pacific.

2023 年第三季度，我們的營收年增 107%，營收達到 8,010 萬美元。這一非凡的成長源於歐洲和亞太地區客戶對我們商用車業務的令人難以置信的需求成長。

We continue to expand our gross margins, achieving significant double-digit improvement and adjusted gross margin of 24.2%, a 14 percentage point increase year-over-year.

我們持續擴大毛利率，實現了兩位數的大幅提升，調整後毛利率達到 24.2%，較去年同期成長 14 個百分點。

We closed the third quarter with a record backlog of 678.7 million, driven by a strong order intake of 67.5 million from our commercial vehicle business. Our current backlog is made up of more than 84% 53.5Ahy strong demand in both U.S and the European market. If backlog continues to display however 53.5Ahlogy has been readily integrated into both the energy storage and commercial vehicle segments worldwide.

在商用車業務 6,750 萬輛的強勁訂單推動下，我們第三季的積壓訂單達到創紀錄的 6.787 億輛。我們目前的積壓訂單超過 84% 是由美國和歐洲市場 53.5Ahy 的強勁需求組成。然而，如果訂單積壓繼續存在，53.5Ahlogy 已輕鬆整合到全球能源儲存和商用車領域。

Turning to Slide 5. One of our most significant operational achievements in Q3 was a rapid commercialization of our 53.5Ah cell from the new Huzhou Phase 3.1 expansion.

轉向投影片 5。我們在第三季最重要的營運成就之一是湖州新 3.1 期擴建的 53.5Ah 電池的快速商業化。

We are producing at a delivering qualified product at more than 70% utilization, with an updated year-end target of less than 90%. Additionally, our yields have surpassed our rapid production targets and we will continue to focus on improvements to push even beyond this target level.

我們以超過 70% 的利用率生產交付合格產品，更新後的年底目標為低於 90%。此外，我們的產量已經超過了我們的快速生產目標，我們將繼續專注於改進，以超越這一目標水平。

I would like to provide an exciting updates regarding our Huzhou facility capacity. As you will see from Slide 6, we plan on an expansion of 1 gigawatt hour with an automated flexible production line. This line will be able to produce both our 53.5Ah cells, as well as our 48Ah high power cells that are needed by our growing customer base of hydrogen fuel-cell OEMs. This new line already has funding in place, requires a minimal incremental investment, and it provides us the substantial capacity increase in order to meet our highest sales demand.

我想提供有關我們湖州工廠產能的令人興奮的最新資訊。正如您從投影片 6 中看到的，我們計劃透過自動化彈性生產線擴建 1 吉瓦時。這條生產線將能夠生產我們不斷增長的氫燃料電池 OEM 客戶群所需的 53.5Ah 電池以及 48Ah 高功率電池。這條新生產線已經有資金到位，需要最少的增量投資，它為我們提供了大幅的產能成長，以滿足我們最高的銷售需求。

I would now like to turn the call over to our President, Zach Ward, who will discuss some of our key operational updates, sales, partnerships, and achievements for the quarter.

我現在想將電話轉給我們的總裁扎克沃德，他將討論我們本季的一些關鍵營運更新、銷售、合作夥伴關係和成就。

Thank you, Mr. Wu, and thank you all for joining us today. Now please turn to Slide 7 as I cover additional updates from the third quarter.

謝謝吳先生，也謝謝大家今天加入我們。現在請翻到投影片 7，我將介紹第三季的其他更新。

To begin, I'd like to share the latest developments on our US operations for Clarksville Phase 1A. We're approaching domestic operations with a determined and proactive mindset. Our goal is to ensure a seamless ramp up for our US operations. To achieve this, we have extended factory acceptance tests for various components of the production line, incorporating those lessons learned and improvements from our Huzhou 3.1 line. While this has led to a slight delay in SOP, it sets the stage for an accelerated ramp up after installation.

首先，我想分享我們克拉克斯維爾 1A 期美國業務的最新進展。我們以堅定和積極的心態開展國內業務。我們的目標是確保我們美國業務的無縫提升。為了實現這一目標，我們結合了湖州 3.1 生產線的經驗教訓和改進，擴大了生產線各個部件的工廠驗收測試。雖然這導致 SOP 略有延遲，但它為安裝後的加速提升奠定了基礎。

On the construction side, we are nearly at completion with a majority of the building now under joint occupancy and only minor work remains to be done in the fourth quarter.

在施工方面，我們已接近完工，大部分建築目前已被共同佔用，第四季僅需要完成少量工作。

We're also in good position with our production equipment, where we're using the same equipment that is now running with great success on our Huzhou 3.1 line. We have approximately 30% of the equipment on site in Clarksville with majority of the remaining equipment having already been shipped. We have set our site on 2024. We targets to deliver qualified cells and generate Section 45X IRA credits from the second quarter of 2024 onwards.

我們的生產設備也處於有利位置，我們使用的設備與目前在湖州 3.1 生產線上運作並取得巨大成功的設備相同。我們在克拉克斯維爾現場擁有大約 30% 的設備，其餘大部分設備已經出貨。我們已將工地定在 2024 年。我們的目標是從 2024 年第二季起交付合格的電池並產生第 45X 款 IRA 積分。

Drawing on our commercialization success in Huzhou, we have set the ambitious goal of achieving target production yields for Clarksville in the second quarter.

憑藉我們在湖州的商業化成功，我們制定了雄心勃勃的目標，即在第二季度實現克拉克斯維爾的目標產量。

On the personnel side of things, we are continually enhancing our US workforce with better specific expertise and skills to support launch efforts. Our US headcount has increased by nearly 350% year-over-year as we move towards bolstering our domestic presence in 2024. Additionally, we're pleased to share that almost 1/3 of our exceptional Clarkesville team is made up of US veterans. Expect more updates regarding our US operations in the future.

在人員方面，我們正在不斷增強我們的美國員工隊伍，提供更好的具體專業知識和技能，以支援發射工作。隨著我們在 2024 年加強國內業務，我們的美國員工人數同比增加了近 350%。此外，我們很高興地告訴大家，我們卓越的克拉克斯維爾團隊中近 1/3 由美國退伍軍人組成。期待未來有關我們美國業務的更多更新。

In the meantime, I'd like to provide a brief update regarding our Windsor, Colorado energy storage assembly facility. The facility has successfully produced the first of our ME-4300 energy storage containers and has completed a successful customer factory acceptance test.

同時，我想提供有關我們科羅拉多州溫莎儲能組裝工廠的簡要最新情況。該工廠已成功生產我們的第一個 ME-4300 儲能容器，並已成功完成客戶工廠驗收測試。

Now let's turn our attention to Slide 8. Despite facing challenges, such as customer project delays, we achieved an order intake of 67.5 million and continued our year-over-year upward trajectory in revenue growth.

現在讓我們將注意力轉向幻燈片 8。儘管面臨客戶專案延遲等挑戰，我們仍實現了 6750 萬份訂單，並繼續保持收入同比增長的趨勢。

Moving on to Slide 9 to discuss some of our major project developments. We are excited to announce our collaboration on a prototype E-Bus with OEM Otokar, which will utilize our 53.5Ah Gen 4 pack. Otokar is a leading Turkish company renowned for producing buses, military vehicles, and industrial products.

轉到幻燈片 9，討論我們的一些主要專案開發。我們很高興地宣布與 OEM Otokar 合作開發原型電動巴士，該原型車將使用我們的 53.5Ah Gen 4 電池組。 Otokar 是一家領先的土耳其公司，以生產巴士、軍用車輛和工業產品而聞名。

Microvast has also extended its partnership with REE Automotive to equip their LCV platform with our 53.5Ah Gen 4 pack. REE is a cutting edge next-gen EV automotive technology company offering modular electric trucks and platforms.

Microvast 也擴大了與 REE Automotive 的合作關係，為其 LCV 平台配備我們的 53.5Ah Gen 4 電池組。 REE 是一家尖端的下一代電動車技術公司，提供模組化電動卡車和平台。

In the quarter, we made deliveries of our 53.5Ah Gen 4 pack to South Korea in partnership with Higer bus for their E-Bus platform. Higer is a major player in the bus export industry, with units in more than 100 countries and territories across Southeast Asia, Middle East, Africa, East Europe, and the Americas.

本季度，我們與海格客車合作，為其 E-Bus 平台向韓國交付了 53.5Ah Gen 4 電池組。海格是客車出口產業的主要參與者，業務遍及東南亞、中東、非洲、東歐、美洲等100多個國家和地區。

Furthermore, we signed a general purchase agreement for our 21Ah Gen 3 pack with JBM Group, the leading Indian bus OEM. We're very pleased to report that we've delivered approximately 100 MWh to JBM Group during the quarter. We had another excellent quarter in expanding our EMEA business.

此外，我們還與印度領先的客車 OEM 集團 JBM 集團簽署了 21Ah Gen 3 電池組的整體採購協議。我們非常高興地報告，本季我們已向 JBM 集團交付了約 100 兆瓦時的電力。我們在拓展歐洲、中東和非洲業務方面又度過了一個出色的季度。

Looking ahead to the quarter, we anticipate adding significant multiyear contracts as illustrated in Slide 10. Both of these multiyear projects, utilize the 53.5Ah cell, which we have previously mentioned is the linchpin of our multiyear high growth phase. We expect to finalize these contracts in Q4, at which point they'll be included in our backlog.

展望本季度，我們預計將增加重要的多年期合同，如幻燈片 10 所示。這兩個多年期項目都使用 53.5Ah 電池，我們之前提到這是我們多年期高增長階段的關鍵。我們預計將在第四季度敲定這些合同，屆時它們將被納入我們的積壓訂單中。

I will now hand the reins over to our Chief Financial Officer, Craig Webster, to delve into our financial performance in the quarter.

我現在將把權力移交給我們的財務長克雷格·韋伯斯特，深入研究我們本季的財務表現。

Thank you, Zach, and thank you, everyone for tuning in. I will spend the next few minutes discussing our Q3 2023 financial results. Please turn to Slide 12, and I will summarize the main line items from our Q3 P&L.

謝謝扎克，也謝謝大家的收聽。我將在接下來的幾分鐘內討論我們 2023 年第三季的財務業績。請參閱投影片 12，我將總結第三季損益表中的主要項目。

We recorded a really solid quarter with Q3 revenue of 80.1 million, an increase of 107% from 38.6 million in Q3 2022. This growth was driven primarily by strong sales demand in both our European and Asia Pacific markets for commercial vehicles, as OEMs continue to increase their vehicle rounds. On a year-to-date basis, revenue was 202 million, up 45% from 139.7 million in the prior year 9-month period.

我們的季度業績非常強勁，第三季營收為8,010 萬輛，比2022 年第三季的3,860 萬輛成長了107%。這一成長主要是由於我們的歐洲和亞太市場對商用車的強勁銷售需求推動的，因為原始設備製造商繼續增加他們的車輛輪次。今年迄今，營收為 2.02 億美元，比去年 9 個月期間的 1.397 億美元成長 45%。

Our gross margin improved to 22.3% in Q3 2023 compared to 5.2% in Q3 2022. After adjusting for noncash settled share-based compensation expense and cost of sales, adjusted gross margin increased to 24.2% in Q3 2023 compared to 10.2% in Q3 2022, that's a 14 percentage point improvement. With the continuous yield and utilization improvements on the Phase 3.1 line, we expect to maintain and possibly improve these margin levels.

我們的毛利率在2023 年第三季提高至22.3%，而2022 年第三季為5.2%。在對非現金結算的股權激勵費用和銷售成本進行調整後，調整後毛利率在2023 年第三季度增至24.2%，而2022 年第三季為10.2% ，提高了 14 個百分點。隨著 3.1 期生產線產量和利用率的不斷提高，我們預計將維持並可能提高這些利潤水準。

Operating expenses were 44.7 million in Q3 2023 compared to 39.6 million in Q3 2022. On a year-to-date basis, operating expenses were 119.9 million, a decrease of 10% from 133.4 million in the prior year 9-month period.

2023 年第三季的營運支出為4,470 萬美元，而2022 年第三季的營運支出為3,960 萬美元。年初至今，營運支出為1.199 億美元，比去年9 個月期間的1.334 億美元下降了10 %。

After adjusting for noncash SBC expense and SG&A, our adjusted operating expenses in Q3 2023 were 30.3 million, compared to 22.3 million in Q3 2022, an increase of 8 million. This is mainly due to increasing headcount costs and extracting battery specific expertise as we expand our US business and begin ramping into the next year. Adjusted operating expenses year-to-date was 72.8 million compared to 75.1 million in the prior year 9-month period.

在對非現金 SBC 費用和 SG&A 進行調整後，我們 2023 年第三季調整後的營運費用為 3,030 萬美元，而 2022 年第三季為 2,230 萬美元，增加了 800 萬美元。這主要是由於隨著我們擴大美國業務並開始進入明年，員工成本不斷增加並提取了電池特定的專業知識。今年迄今調整後的營運支出為 7,280 萬美元，而去年 9 個月期間為 7,510 萬美元。

On a year-to-date basis, this reduction in non-GAAP operating expense was mainly due to higher share-based compensation expense in the prior year 9-month period. GAAP net loss was 26.2 million in Q3 2023 compared to a net loss of 36.5 million in Q3 2022.

年初至今，非公認會計準則營運費用的減少主要是由於前一年 9 個月期間的股權激勵費用增加。 2023 年第三季 GAAP 淨虧損為 2,620 萬美元，而 2022 年第三季淨虧損為 3,650 萬美元。

After adjusting for noncash SBC expense, and changes in fair value of our warrant liability, adjusted net loss was 10.3 million in Q3 2023, compared to an adjusted net loss of 17.4 million in Q3 2022. On a year-to-date basis, adjusted net loss was 30.2 million, compared to an adjusted net loss of 61.4 million in the prior year 9-month period.

在對非現金 SBC 費用以及我們的認股權證負債公允價值變動進行調整後，2023 年第三季調整後淨虧損為 1,030 萬美元，而 2022 年第三季調整後淨虧損為 1,740 萬美元。淨虧損為3,020 萬歐元，而去年9 個月期間調整後的淨虧損為6,140 萬歐元。

You're starting to see that as we scale our business, we are making significant progress in narrowing our losses, and expect this trend to continue in Q4 and beyond.

您開始看到，隨著我們擴大業務規模，我們在縮小損失方面取得了重大進展，並預計這種趨勢將在第四季度及以後持續下去。

The impact of these adjustments is shown in 5/13 and reconciliations of non-GAAP metrics to the most comparable GAAP metrics are included in the tables at the end of our earnings press release.

這些調整的影響已在 5/13 中顯示，非 GAAP 指標與最具可比性 GAAP 指標的調整結果包含在我們收益新聞稿末尾的表格中。

Slide 14 showed the geographic breakdown of our revenue for Q3 2023 compared to the prior year period. As you can see, our European business showed outstanding 455% year-over-year increase and accounts for 24% of our revenue, up from just 9% a year ago as key customers begin their vehicle rounds.

投影片 14 顯示了我們 2023 年第三季與去年同期相比營收的地理分佈。正如您所看到的，隨著主要客戶開始車輛採購，我們的歐洲業務年增了 455%，占我們收入的 24%，而一年前這一比例僅為 9%。

We continue to expect substantial growth in our India revenues, especially for the 53.5Ah cell with much of this already in backlog. As Zach mentioned, we have a couple of multiyear commercial vehicle nominations that would further add to our backlog position in Q4.

我們繼續預計我們的印度收入將大幅成長，特別是 53.5Ah 電池，其中大部分已處於積壓狀態。正如扎克所提到的，我們有幾個多年的商用車提名，這將進一步增加我們第四季的積壓狀況。

When we add the important contributions from China and Asia Pacific customers, our overall commercial vehicle revenues have grown 45% year-to-date versus 2022. On the U.S side, revenues are behind where we wanted them to be. Deliveries on projects have been pushed outside. We will begin deliveries in Q4 and they should then make a meaningful contribution to overall 2024 revenues.

如果算上中國和亞太地區客戶的重要貢獻，我們的整體商用車收入與 2022 年相比，今年迄今成長了 45%。在美國方面，營收落後於我們的預期。項目的交付已被推到外面。我們將於第四季開始交付，然後他們將為 2024 年的整體收入做出有意義的貢獻。

Turning to Slide 15, our expansion in gross margin in Q4 is a crucial proof point in the maturity of our operations and the growing contribution from the commercial introduction of our new 53.5Ah cell. We expect to see further positive impacts across margin as Huzhou Phase 3.1 approaches full utilization in Q4, and on Clarksville Phase 1A start qualify deliveries from Q2 of next year.

轉向投影片 15，我們第四季毛利率的擴張是我們營運成熟度以及新型 53.5Ah 電池商業化貢獻不斷增長的關鍵證明。隨著湖州 3.1 期在第四季度接近全面利用，以及克拉克斯維爾 1A 期從明年第二季度開始合格交付，我們預計利潤率將受到進一步的積極影響。

The backlog number of 678.7 million with over 84% of this for the 53.5Ah cell gives us good visibility into the utilization rates for our capacity expansions. Around 65% of the backlog is booked for 2024, mostly for customers in Europe and the US and as Mr. Wu mentioned, we now need to launch a flexible Phase 3.2 line in Huzhou to bring on more capacity to meet demand for 48Ah and 53.5Ah cells. As you know, our golden rule is that we only add capacity if supported by demand.

積壓數量為 6.787 億顆，其中超過 84% 為 53.5Ah 電池，這使我們能夠很好地了解產能擴張的利用率。大約65%的積壓訂單是在2024年預訂的，主要是歐洲和美國的客戶，正如吳先生所提到的，我們現在需要在湖州啟動靈活的3.2期生產線，以增加產能以滿足48Ah和53.5的需求啊細胞。如您所知，我們的黃金法則是，只有在需求支援的情況下，我們才會增加產能。

This new line is situated in the same building as the Phase 3.1 line, which was sized to support a total of 12 GWh. The lead time to add a new Phase 3.2 line will be around four to six months, with a majority of the investment being in additional production equipment.

這條新線路與 3.1 期線路位於同一棟建築物內，該線路的容量總計為 12 GWh。增加新的 3.2 階段生產線的準備時間約為四到六個月，其中大部分投資用於額外的生產設備。

Net cash used in operating activities during the quarter was 29.3 million, which was primarily due to operating loss and working capital. Negative free cash flow in the quarter of 89.3 million resulted from this net operating cash outflow as well as our capital investment program. The majority of this capital expenditure in Q3 was to fund our capacity expansion in Clarksville, which totalled 38.3 million. We also have capital expenditures totalling 21.6 million relating to improvements to our existing facilities and ongoing R&D projects.

本季經營活動使用的現金淨額為2,930萬美元，主要是由於經營虧損和營運資金。本季自由現金流為負 8,930 萬美元，是由於營運現金流淨流出以及我們的資本投資計畫造成的。第三季的大部分資本支出用於資助我們在克拉克斯維爾的產能擴張，總計 3,830 萬。我們還有總計 2,160 萬英鎊的資本支出用於改善現有設施和正在進行的研發項目。

Looking ahead, we estimate that full year capital expenditures will remain in the range of 180 million to 210 million and will primarily be used for the Clarksville Phase 1A capacity expansion. Turning to Slide 16, we detail the financial resilience of Microvast.

展望未來，我們預期全年資本支出將維持在1.8億至2.1億之間，主要用於Clarksville 1A期產能擴充。轉向投影片 16，我們詳細介紹了 Microvast 的財務彈性。

Our total debt outstanding of 99.5 million is relatively modest. And you can see that the maturity profile requires only 5 million to be repaid in the fourth quarter. Looking further out, total debt repayments of to 31 December 2025 are a very manageable 40.2 million. All of this debt is for our China operations, and none of it has any recourse to our US holding structure or assets.

我們的未償債務總額為 9,950 萬美元，相對較小。而且你可以看到，到期概況只需要在第四季償還500萬。展望未來，截至 2025 年 12 月 31 日，債務償還總額為 4,020 萬美元，非常可控。所有這些債務都是為了我們的中國業務，並且沒有任何債務可以追索我們的美國控股結構或資產。

We have approximately 70 million available to draw down in order to continue expansion and growth at our Huzhou facility. Part of its being used for the estimated 35 million investment in the Phase 3.2 expansion. This incremental investment in a flexible automated line allows us to respond to both demand for the 53.5Ah cell that will exceed Phase 3.1 capacity, and also to deliver 48Ah cells for the hydrogen fuel cell market.

我們有大約 7,000 萬美元可供使用，以便繼續擴大和發展湖州工廠。其中一部分用於預計投資 3500 萬美元的 3.2 期擴建。對靈活自動化生產線的增量投資使我們能夠滿足對將超過第 3.1 階段產能的 53.5Ah 電池的需求，並為氫燃料電池市場提供 48Ah 電池。

Turning to the US operations. These currently remain free of leverage, and we continue to make solid progress on a project at financing which is to be secured by the Phase 1A expansion. We anticipate that facility to be in place during Q4.

轉向美國業務。這些目前仍然沒有槓桿，我們繼續在融資項目上取得紮實進展，該項目將由 1A 期擴建來保證。我們預計該設施將在第四季度到位。

With that, I will turn it back over to Mr. Wu to review our outlook.

接下來，我將把它轉回給吳先生來回顧我們的前景。

Thank you, Craig.

謝謝你，克雷格。

Please turn to Slide 18, which provides us a summary outlook for the upcoming months. For the first quarter, we expect the revenue to be in the range of 90 million to 100 million, a 47% from Q4 a year ago at the midpoint, driven by increasing deliveries and a production output from our EMEA and Asia Pacific commercial vehicle customers. We are also targeting adjusted gross margin of 20% to 25%. Additionally, we are targeting a further increase to our previous utilization and aim to achieve 90% out of Huzhou's 3.1 automated line.

請參閱幻燈片 18，它為我們提供了未來幾個月的概要展望。在歐洲、中東和非洲和亞太商用車客戶的交付量和產量增加的推動下，我們預計第一季的營收將在 9,000 萬至 1 億輛之間，比去年第四季中點成長 47% 。我們也將調整後的毛利率目標定為 20% 至 25%。此外，我們的目標是進一步提高先前的利用率，並爭取使湖州 3.1 自動化生產線的利用率達到 90%。

Finally, if you turn to Slide 19, we look at the full year guidance update. Due to customer project delays, some revenue in combination is being pushed into early 2024. We are providing an updated 2023 guidance for full year revenue to be in the range of 292 million to 302 million, representing year-over-year revenue growth of 43% to 48%.

最後，如果您翻到幻燈片 19，我們會看到全年指導更新。由於客戶專案延遲，部分收入被推遲到 2024 年初。我們提供更新的 2023 年指導，全年收入將在 2.92 億美元至 3.02 億美元之間，同比收入增長 43% % 至 48%。

This is still a high growth year. It's also worth noting that as long as we have some revenue slippage, the revenue we are delivering this year is at a much higher gross margin than we have anticipated. As Craig just mentioned, this means we have made real progress in narrowing our losses. So some of our projects in the fourth quarter revenue are pushing to early next year.

今年仍然是高成長的一年。還值得注意的是，只要我們有一些收入下滑，我們今年交付的收入的毛利率就比我們預期的要高得多。正如克雷格剛才提到的，這意味著我們在縮小損失方面取得了真正的進展。所以我們的部分專案第四季的營收都推到了明年初。

We continue to anticipate a strong revenue growth into 2024 provided by visibilities through both our sales pipeline and record backlog. The excellent operational results we are seeing out of our newest Huzhou Phase 3.1 automated production line, gives us the confidence to expand the capacity and a focus on accelerated ramp at our upcoming Clarksville Phase 1A production facility.

我們繼續預計，透過我們的銷售管道和創紀錄的積壓訂單，我們的收入將在 2024 年實現強勁成長。我們從最新的湖州 3.1 期自動化生產線中看到的出色營運成果，讓我們有信心擴大產能，並專注於加快即將建成的克拉克斯維爾 1A 期生產設施的產能提升。

We are seeing strong demand trajectory for Microvast battery solutions worldwide. And anticipate our substantial momentum in the first 9 months of 2023 to carry forward as customer orders remain robust throughout the remainder of this year and into next.

我們看到全球對微宏電池解決方案的強勁需求。預計我們將在 2023 年前 9 個月保持強勁勢頭，因為客戶訂單在今年剩餘時間和明年仍然保持強勁。

As we look to the final quarter of 2023, the tangible deliverables, we ask you to judge us by the start of this year, have been mostly accomplished. We are having a high growth year. We have record backlog, supporting another high growth year in 2024. Most of that backlog is for 53.5Ah cell which has been rapidly industrialized.

展望 2023 年最後一個季度，我們要求您在今年年初對我們進行評價的有形交付成果已基本完成。我們正經歷高速成長的一年。我們的積壓訂單創歷史新高，支援 2024 年再次實現高成長。其中大部分積壓訂單是已快速工業化的 53.5Ah 電池。

We are improving gross margins and approaching gross margin levels that our mature scale competitors achieve. We have reached a qualified production operations in our Huzhou Phase 3.1 line, ahead a very successful milestone, this sizable investment.

我們正在提高毛利率，並接近成熟規模競爭對手所達到的毛利率水準。我們的湖州 3.1 期生產線已經達到合格的生產運營，這是一項非常成功的里程碑，這是一筆巨大的投資。

On this last item, it's difficult for me to fully convey the challenges in bridging battery technologies to the point of scale advanced manufacturing. This is our third successful launch for the new technologies with their own dedicated line. And at Clarksville Phase 1A will be a copy of Huzhou 3.1 production mine.

關於最後一項，我很難完全傳達將電池技術連接到規模先進製造的挑戰。這是我們第三次透過自己的專用線成功推出新技術。克拉克斯維爾 1A 期將是湖州 3.1 生產礦的複製品。

Before we close, I'd like to take a moment to thank our entire team at Microvast for their hard work and dedication. This quarter's results are a testament to your commitment to excellence. And I'm so proud of what we have accomplished together. You have all risen to the occasion and exceeded expectations, continued to innovate, deliver for our customers, and support each other through thick and thin. Thank you for all that you do. I am truly grateful to be part of this team.

在結束之前，我想花一點時間感謝微宏整個團隊的辛勤工作和奉獻精神。本季度的業績證明了您對卓越的承諾。我為我們共同取得的成就感到非常自豪。你們都迎難而上，超越了預期，持續創新，為我們的客戶提供服務，並在風雨同舟中相互支持。感謝您所做的一切。我真的很感激能成為這個團隊的一員。

And now I will turn the call back to operator to start the Q&A session.

現在我將把電話轉回接線生以開始問答環節。

Thank you. (Operator Instructions)

謝謝。 （操作員說明）

Sameer Joshi, H.C. Wainwright.

薩米爾‧喬希 (Sameer Joshi)，H.C.溫賴特。

Hey, guys. Good afternoon. Thanks for taking my questions. Good to see gross margin improvements beyond what you're targeting. And I understand yield improvements and some product mix maybe upgrade. But is there any other items that is helping boost gross margins? And more importantly, what are your targeted gross margins now that you are seeing this implement already?

大家好。午安.感謝您回答我的問題。很高興看到毛利率的提高超出了您的目標。我了解產量的提高和一些產品組合可能會升級。但有其他項目有助於提高毛利率嗎？更重要的是，既然您已經看到了這個實施，您的目標毛利率是多少？

Should I take that one? Sure.

我該拿那個嗎？當然。

So, you nailed a couple of them, right. So, the utilization is really good. If utilization that was not really achieved before Phase 1, Phase 2, the actual yield better than we thought it would be at this stage of the year. Other factors, raw material prices have definitely helped as well. And what we're trying to achieve in Q4 is maintain that 20% to 25% adjusted gross margin. And if we do that, we should narrow those losses even further.

所以，你釘牢了其中幾個，對吧。所以說，利用率確實不錯。如果在第一階段、第二階段之前沒有真正實現利用率，那麼今年這個階段的實際產量會比我們想像的要好。其他因素，原物料價格也肯定有所幫助。我們在第四季努力實現的目標是維持 20% 至 25% 的調整後毛利率。如果我們這樣做，我們應該會進一步縮小損失。

Got it. On the Clarksville sort of a little bit of a push out, are there any factors that stood out for the delay? Or was it just regular delays that you expect in a plant facility?

知道了。克拉克斯維爾有點推遲，有什麼因素導致延誤嗎？或者這只是您所期望的工廠設施的定期延誤？

Wu yang, you want me to do that? or are you going to take it?

五陽，你要我這麼做嗎？或者你要接受它嗎？

You do it. You can do it.

你做吧。你能行的。

Okay, thank you. The reason is and Zach mentioned it that a little bit earlier is that the equipment goes through factory acceptance test on China side which is basically about 3,000 pieces of equipment that our team go through and make sure it passes that test. So, we wanted to make some modifications that we learned about from putting 3.1 into operation that's actually going to accelerate the ramp up when it comes to the US side. So, you probably think about this as a slight push out in a quarter, but it actually benefits you because it's actually quicker and cheaper to ramp throughout Q2.

好的謝謝。原因是紮克早些時候提到過，設備在中國方面經過了工廠驗收測試，我們的團隊基本上對大約 3,000 台設備進行了測試，並確保它們通過了測試。因此，我們希望對 3.1 投入運行時了解到的一些修改進行一些修改，這實際上會加速美國方面的升級。因此，您可能會認為這是一個季度內的輕微推遲，但它實際上對您有利，因為在整個第二季度中提升速度實際上更快、更便宜。

Understood. Thanks for that color. On the new earnings that have occurred in maybe 3Q to higher and JBM Group. Do we have any feedback from them or is it too early to have any sort of feedback from performance and [financial] issues there?

明白了。謝謝那個顏色。關於第三季可能出現的新收益以及 JBM 集團。我們是否從他們那裡得到了任何反饋，或者現在就績效和[財務]問題獲得任何反饋是否為時過早？

You're talking about customer feedback from Higer and JBM?

您是在談論海格和 JBM 的客戶回饋嗎？

That is right. Because I think (multiple speakers) 80 units, yes.

沒錯。因為我認為（多個揚聲器）80 台，是的。

These are being long-term customers that just tells you that they love us. They love the products and then coming back for more.

這些都是長期客戶，他們只是告訴您他們愛我們。他們喜歡這些產品，然後會回來購買更多產品。

And then there was a slight increase in R&D expense this quarter related to previous quarters. (inaudible) headcount increase, but they were in one-time items in this.

然後，本季的研發費用較前幾季略有增加。 （聽不清楚）員工人數增加，但他們屬於一次性專案。

It's really difficult to hear the last part of that question. Can you --

聽到這個問題的最後一部分確實很難。你可以嗎 -

Was there any one-time items (multiple speakers) 13 million R&D expense or was it just -- should we expect these levels going forward?

是否有任何一次性項目（多個發言者）1300 萬研發費用，或者只是——我們應該預期這些水平會持續下去嗎？

Okay. That was -- that's one-time expense. But if you look at the changes in our OpEx is that we are adding more headcount, and you're especially seeing that on the US side as Zach referenced.

好的。那是——那是一次性費用。但如果你看看我們營運支出的變化，你會發現我們正在增加更多的員工人數，正如扎克提到的那樣，你尤其會在美國方面看到這一點。

Okay, great. Good to see all the progress. Good luck

好的，太好了。很高興看到所有的進展。祝你好運

Thank you.

謝謝。

Sean Milligan, Janney.

肖恩·米利根，珍妮。

Hey guys. Nice quarter. Can you talk a little bit more about the project push outs that you're seeing in the fourth quarter. Your kind of confidence in timing for those being first half '24 deliveries. Because it looks like kind of roughly, I guess, like 50 million to 60 million pushed out. And just, again, when I give you the chance to reiterate your confidence, and those coming through in the first half of next year.

大家好。不錯的季度。您能否多談談您在第四季度看到的項目推出情況。您對 24 年上半年交付的時間充滿信心。因為我猜，看起來大概有 5,000 萬到 6,000 萬被淘汰了。再次，當我給你們機會重申你們的信心以及明年上半年的信心時。

Zach, can you answer --

札克，​​你能回答嗎——

(multiple speakers) little bit about projects and I can just talk about sort of like the sort of it's the financial bit into Q1 of next year?

（多個發言者）關於專案的一些信息，我可以談談明年第一季的財務部分？

Sure. This is Zach. Yes, these are just normal push outs. So, we do anticipate that landing in 2024 they're having just normal push and pulls of projects that we see from customers.

當然。這是札克。是的，這些只是正常的推出。因此，我們確實預計到 2024 年，他們只會正常推動和拉動我們從客戶那裡看到的項目。

And so I've just mentioned on Q4, Sean, which is really relevant is that you are going to see a lot bigger contribution from Europe, you've seen that already. So Europe is like 20%, 25% of Q3. Europe is going to have a really solid Q4 to the point where probably European revenues are going to grow like 5x this year, and then they're going to carry on accelerating into next year. And that's mostly for like 53.5Ah cell. And then the backlog number is relevant as I mentioned earlier. The [live hood] of 65% of backlog is for next year. That's mostly European and US customers. And as you know from our business, the China, Asia Pacific don't really do backlog. So, what we'll also get into next year again is a really solid contribution from Asia Pacific customers.

因此，肖恩，我剛剛在第四季度提到，這確實相關，您將看到歐洲做出更大的貢獻，您已經看到了。所以歐洲大約佔第三季的 20%、25%。歐洲第四季的表現將非常強勁，今年歐洲的營收可能會成長 5 倍，然後將繼續加速到明年。這主要適用於 53.5Ah 電池。正如我之前提到的，積壓數量是相關的。 65% 的積壓[live hood] 是為了明年。這主要是歐洲和美國的客戶。正如您從我們的業務中了解到的那樣，中國和亞太地區並沒有真正積壓訂單。因此，明年我們也將再次看到亞太地區客戶的真正可靠貢獻。

Okay. Thanks Craig, it's very helpful. And I guess also kind of backing onto that, well, a little bit of a question about third quarter and fourth quarter, which is Phase 1 in China. Can you talk about how the utilization there has ramped this year?

好的。謝謝克雷格，這非常有幫助。我想也有點支持這一點，嗯，有一點關於第三季和第四季的問題，這是中國的第一階段。您能談談今年的利用率如何提升嗎？

I think you said it's like 70% now and targeting 90% equity in the fourth quarter. If you run that through and you kind of run through the legacy volumes in China, it seems like revenues would be a bit higher. So it's some of that production. But can you talk about if there's any production from Phase 1 that isn't being recognized in the back half of this year, because of shipments maybe to the US for storage containers, or what's kind of being pushed into next year from that production profile?

我想你說過現在是 70%，目標是第四季達到 90%。如果你仔細研究中國的遺留數量，收入似乎會更高一些。這是其中的一部分。但是，您能否談談第一階段的生產是否有任何在今年下半年沒有得到認可的產品，因為可能會運送到美國作為存儲容器，或者從該生產情況中推到明年的生產情況？

Okay. Phase 1 is really turning out 21Ah. So, we're getting reasonable utilization of Phase 1 line. If you're reading through like utilizations from revenues, what you've seen is a much higher, that's I mentioned European contributions in Q3. That's pretty mature like 53.5Ah cell. And then what we've been producing in Q3 is like sales that have gone into inventory that we're going to deliver in Q4 and Q1. And then same thing in Q4.

好的。第一階段確實生產了 21Ah。因此，我們正在合理利用一期線路。如果您正在閱讀類似的收入利用率，您會發現要高得多，這就是我在第三季度提到的歐洲貢獻。像53.5Ah電池一樣非常成熟。然後，我們在第三季生產的產品就像已進入庫存的銷售產品，我們將在第四季和第一季交付。第四季也是同樣的情況。

And in Phase 3, 3.1 swap, but like so for Phase 3.1 just based on the utilization that you've talked about for the third quarter and the fourth quarter, it seems like they're building a lot of cell inventory for the first half of next year. Just kind of trying to see if you could comment on that, like how much cell inventory you're building related to pack deliveries probably next year?

在第 3 階段，3.1 交換，但就像第 3.1 階段一樣，僅根據您談到的第三季度和第四季度的利用率，他們似乎正在為上半年建立大量電池庫存明年的。只是想看看您是否可以對此發表評論，例如您明年可能會建立多少與電池組交付相關的電池庫存？

Yes. Sean, building inventory for orders, so that's to meet the revenue guidance that we're giving you for Q4. And then also backlog of orders that we need to deliver for Q1 as well.

是的。肖恩（Sean），正在為訂單建立庫存，以便滿足我們為您提供的第四季度的收入指導。然後還有我們需要在第一季交付的積壓訂單。

Okay. Yes, we can take that offline, too. And then I guess can you talk about the [digging] environment in the US for battery storage? I know you talked about potential for additional bookings, in the fourth quarter related to commercial vehicle contracts. But just wanted to get your thoughts on the utility scale storage environment for Clarksville next year.

好的。是的，我們也可以將其離線。然後我想你能談談美國電池儲存的[挖掘]環境嗎？我知道您談到了第四季度與商用車合約相關的額外預訂的可能性。但只是想了解您對明年克拉克斯維爾公用事業規模存儲環境的想法。

Do you want to go?

你想去嗎？

Yeah, (inaudible), Craig?

是啊，（聽不清楚），克雷格？

Yes, please.

是的，請。

Yeah. Hey Sean, this is Zach Ward. Yeah, we continue to see really strong demand in the energy storage sector. You need to bring it into Microvast in the market is that Clarksville, which enables our customers to achieve that additional domestic content, which gives them the ability to capitalize another 10% of the project. So we continue to see strong demand, a strong pipeline build up, and great results from that market.

是的。嘿肖恩，我是紮克·沃德。是的，我們繼續看到能源儲存領域的需求非常強勁。您需要將其帶入 Microvast 的市場是 Clarksville，這使我們的客戶能夠獲得額外的國內內容，這使他們能夠利用該專案的另外 10% 的資金。因此，我們繼續看到強勁的需求、強大的管道建設以及該市場的巨大成果。

The overall market in the US has, I think dissipated a little bit of headwinds with the rise in interest rates and the appetite for tax equity. But it's still the number to market globally.

我認為，隨著利率上升和稅收公平的需求，美國的整體市場已經消散了一些阻力。但這仍然是全球市場上的數字。

Okay, thank you. I mean, I guess the question would be like, do you anticipate being able to sign additional offtake in the US for 2024 on storage, or are you getting more on '25 and '26 at this point?

好的謝謝。我的意思是，我想問題是這樣的，您是否預計能夠在 2024 年在美國簽署額外的存儲承購協議，或者您目前是否在 '25 和 '26 上獲得更多信息？

Yes, we're working diligently to increase our order intake for all the capacity for Clarksville 1A as well as looking at opportunities for our 1B expansion.

是的，我們正在努力增加 Clarksville 1A 所有產能的訂單量，並尋找 1B 擴張的機會。

Okay, great. I'll hand it over and then come back if there's an opportunity.

好的，太好了。我會把它交給你，如果有機會的話我會回來。

(Operator Instructions) Colin Rusch, Oppenheimer.

（操作說明）Colin Rusch，Oppenheimer。

Thanks so much, guys. So just with the expansion in Huzhou, I want to make sure I understand something. You've got another $92 million of cash available that's not (inaudible) right now. So, we've got plenty of cash to cover that $35 million from what I can see. And then, if you execute on the ramp here, it sounds like you've got a process in the equipment set pretty well qualified at this point.

非常感謝，夥計們。因此，隨著湖州的擴張，我想確保我了解一些事情。您還有另外 9,200 萬美元的可用現金，但現在還沒有（聽不清楚）。因此，據我所知，我們有足夠的現金來支付這 3500 萬美元。然後，如果您在此處的坡道上執行，聽起來您在設備組中已經有一個非常合格​​的流程。

So, I just want to understand any sort of risk around either the financing, or the equipment set and the ramp up that you guys are seeing on the horizon here as you execute against that plan?

所以，我只想了解你們在執行該計劃時所看到的融資、設備組和升級方面的任何類型的風險？

Wu Yang, I might take the financing part, and I think, if you don't mind you do the ramp up part, that's (inaudible) Colin. Is that okay?

吳陽，我可能會負責融資部分，我想，如果你不介意的話，你可以負責提升部分，那是（聽不清楚）科林。可以嗎？

Yes, you please go. You go,

是的，請你走吧。你去，

Thank you. So, Colin, you're right. The availability that we've got 70 million to fund more CapEx in China its more than covered up the need for Phase 3.2. We've got another working capital line in China as well. The reason you can do it is because like you delivered on your promise, you told the bank, say partly funded 3.1, you can build the building, you can get the equipments in, you can install it, you can get a decent utilization, you can get a good yield, and like you've got customers, and the growing, right?

謝謝。所以，科林，你是對的。我們有 7,000 萬美元可以為中國的更多資本支出提供資金，足以滿足 3.2 階段的需求。我們在中國還有另一條營運資金線。你能做到這一點的原因是因為就像你兌現了你的承諾，你告訴銀行，說部分資助3.1，你可以建造大樓，你可以把設備放進去，你可以安裝它，你可以獲得像樣的利用率，你可以獲得很好的收益，就像你有客戶一樣，而且還在持續成長，對嗎？

So, we did all those things. Now we need to have capacity to have more audits for that. So we -- it's funded. And I think at that point, I'll hand it over to Wu Yang, because he will talk you through just how critical that ramp up is and what it involves, and why it's really then relevant to look at financing on the US side as well.

所以，我們做了所有這些事情。現在我們需要有能力對此進行更多審計。所以我們——它得到了資助。我認為到那時，我會將其交給吳陽，因為他將向您介紹這種增加的重要性及其涉及的內容，以及為什麼將美國方面的融資視為真正相關的出色地。

Yes, thanks, Colin. To build a factory from a laboratory is nice and to move to the products, it's not an easy job. Because you build a sample cell in the laboratory, that's only a few, or that [damage] on them much easier. If you build in the factory, you have to consistently control, it's really, really critical. You have to make every battery identical, and every cell is the same performance. And the yield is really a big cost saver for the manufacturer, because the yield is low, you waste your net profit, not gross profit. And so the yield mix batteries, like, literally like a 14 steps. If you want to get a 97% yield, you have to make every step 99.9%. If you time everything else, 14x together, that you get a 97%.

是的，謝謝，科林。從實驗室建立工廠固然很好，但轉向生產產品並不是一件容易的事。因為你在實驗室中建造了一個樣品池，所以這只是少數，或者說對它們的[損壞]要容易得多。如果你在工廠裡建造，你必須持續控制，這真的非常重要。你必須使每個電池都相同，並且每個電池的性能都相同。而且良率對製造商來說確實節省了很大的成本，因為良率低，你浪費的是淨利潤，而不是毛利。因此，混合電池的產量，實際上就像 14 個步驟。如果你想獲得97%的良率，你必須讓每一步都達到99.9%。如果你把其他所有的時間一起計算 14 倍，你會得到 97%。

That means, the every step you have to control very precisely. It's a big job, and not easy to make battery. But Microvast right now, we really we get there. And we -- in the first line, that first line we spend a lot of effort to refine the process to refine the equipment, that's why extend our Clarksville production line. We intentionally delay the [FAC test] because the equipment moved from China across the border to United States that's much harder to fix a problem. That's why you see they did a bit postponed.

這意味著，你必須非常精確地控制每一步。製造電池是一項艱鉅的工作，而且不容易。但現在，Microvast 確實做到了。我們——在第一條生產線上，我們花了很多精力來改進工藝，改進設備，這就是為什麼要擴展我們的克拉克斯維爾生產線。我們故意延後[FAC測試]，因為設備從中國跨境轉移到美國，解決問題困難得多。這就是為什麼你會看到他們的行動有點延遲。

That's super helpful. And as you ramped up the 63.5Ah cell, obviously getting these kind of yields and consistency is a key benchmark for your customers. Can you talk about how it's impacting both your commercial vehicle customers and your ability to close deals as well as what's happening with some of the stationary power customers that are looking forward to ramping up higher density product?

這非常有幫助。當您增加 63.5Ah 電池時，顯然獲得這樣的產量和一致性是您的客戶的關鍵基準。您能否談談這對您的商用車客戶和您完成交易的能力有何影響，以及一些期待增加更高密度產品的固定電力客戶的情況？

You mean the commercial vehicle customers?

您指的是商用車客戶嗎？

For both, right. What I'm -- the question is as you proven out the [manual] of the manufacturing operation, is that improving your leverage with customers to close deals and potentially start driving some price increases?

對兩者來說，都是對的。我的問題是，正如您證明了製造業務的[手冊]一樣，這是否可以提高您與客戶的影響力以完成交易並可能開始推動價格上漲？

Oh, every customer they were very detail, the factory inspection and audit. You have to get a high score, you have to get a A or over 90 the score, over 90, then you can tack the inspection. You can be qualified for prior. Not only for production lines, they check your quality control, your deliverability. Can your delivery, or your consistency to deliver and all kinds of factors come via [shift check]. It's very strict. Automotive is most shifting the process.

哦，每個客戶他們都很詳細，工廠檢查和審核。你必須得高分，你得A或90分以上，90分以上才可以去檢查。您可以獲得優先資格。他們不僅檢查生產線，還檢查您的品質控制和交付能力。你的交付，或你交付的一致性以及各種因素是否可以透過[輪班檢查]來獲得。這是非常嚴格的。汽車產業正在改變這個過程。

Excellent. And I guess the last one is, with the stationary power product that you've gotten into, kind of the fabrication of that. Are there any surprises that have come up in terms of performance or fabrication that we should be attending to?

出色的。我想最後一個是，你已經進入的固定電源產品，是一種製造。在性能或製造方面是否有任何我們應該關注的驚喜？

Zach, can you answer that question?

札克，​​你能回答這個問題嗎？

Yes, yes. We've been really pleased, Colin, with the performance of 53.5Ah cells. It continues to be a dramatic performance improvement over the competition with energy retention as well as round trip efficiency. The round trip efficiency is just so critical because these stationary projects continue to cycle every day for 20 to 27.5 years. So if you're losing 1% or 2% efficiency, you can amortize that over the life of the power plant. So that value proposition continues to resonate with the market really strong.

是的是的。 Colin，我們對 53.5Ah 電池的性能非常滿意。與競爭對手相比，它在能量保留和往返效率方面仍然取得了顯著的性能改進。往返效率非常重要，因為這些固定項目每天都會持續循環 20 到 27.5 年。因此，如果您損失 1% 或 2% 的效率，您可以在發電廠的使用壽命內攤提。因此，這一價值主張繼續在市場中產生強烈的共鳴。

Thanks so much, guys.

非常感謝，夥計們。

This concludes the question and answer session. I would like to turn the conference back over to Mr. Wu for any closing remarks. Please go ahead.

問答環節到此結束。我想請吳先生發表閉幕詞。請繼續。

Yes, thank you, everybody for joining us. Thank you.

是的，謝謝大家加入我們。謝謝。

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

今天的電話會議到此結束。您可以斷開線路。感謝您的參與並祝您有個愉快的一天。