EHang Holdings Ltd. Q4 FY2024 earnings call

• Q4 and full-year 2024 were record-breaking with significant growth in deliveries and revenues, achieving positive adjusted net income and operating cash flow for the first time.
• Low-altitude economy emphasized in China's 2025 two sessions, with government initiatives and local plans supporting development.
• Over 20 eVTOL operational demonstration sites and e-ports established in 16 cities; operator certification process ongoing for pilot-less passenger carrying.
• Deepening AI Plus strategy, collaborating with universities and companies to build smart low-altitude ecosystem.
• Advancing multi-rotor eVTOL series, testing solid-state lithium batteries with over 48 minutes endurance, VT-35 prototype in final assembly.
• Regional production bases in Yunfu, Hefei, Beijing for manufacturing, R&D, emergency rescue, etc., with capacity expansion plans.

In Q4 2024, EHang delivered 78 units of EH216 series product, generating revenues of RMB164 million, representing an increase of 239.1% year-over-year. For the full-year 2024, it delivered 216 units with a total revenue reaching RMB456 million, marking a 288.5% year-over-year increase. The gross margin for Q4 2024 was 60.7%, slightly down from 64.7% in the same period of 2023 and on par with Q3. For full-year 2024, the annual gross margin was 61.4%, a slight decrease from 64.1% in 2023. The decreases in gross margin were primarily due to changes in the revenue mix and higher unit costs for the EH216-S.

• 2025 revenue expected to be approximately RMB900 million, a 97% year-over-year increase.
• Anticipate early issuance of operator certificates for commercial eVTOL operations.
• Plans for global market expansion and diversification of revenue streams, including low-altitude tourism, logistics, and emergency response.

• Forward-looking statements involve inherent risks and uncertainties; actual results may differ from expectations.
• Gross margin affected by revenue mix and unit costs of the EH216-S.
• Dependence on regulatory approvals and safety standards for eVTOL operations.

Q: Regarding production capacity, specifically about the Hefei production facility's expansion by the end of 2025 and 2026, and utilization rate.

A: For Yunfu Phase 2, capacity will reach 1,000 units annually. Yunfu Phase 1 and 2 have specialized focuses. Hefei plans a JV with JAC motors and Hefei Guoxian holdings, expansion work expected in 1.5-2 years. Expansion follows manufacturing to order principle with specialized management for different product lines.

Q: On the executive timeline for OC application, milestones, and GAAP profitability.

A: CAAC completed acceptance and on-site inspection of two AC applicants, waiting for final regulatory approval. Expect OC soon. GAAP profitability expected in 2026. 2025 full-year CapEx guidance is around [$14] million, OpEx to grow 40% year-over-year.

Q: On gross margin outlook and financing plans in 2025.

A: Targeted gross margin around 60%. Will diversify product lines. Accelerate market expansion, seeking additional financing for new technology, product development, etc.

Q: Rough timeline for air taxi operation and milestones.

A: Prioritize safety, establish operations in domestic tourism areas to accumulate data before air taxi services. Air taxi depends on ground infrastructure; cities have plans for infrastructure construction. EHang is contributing to policy and infrastructure planning.

Q: On overseas market OC certification progress, orders, and revenue diversification.

A: Completed flight demonstrations in multiple countries, delivered orders to overseas markets. Actively engaging with civil aviation authorities worldwide. Diversify revenue streams through product sales, service, operations, and expanding into logistics and firefighting business.

Q: Update on new orders and JAC production base collaboration.

A: Domestic demand strong with over 1,000 units intention orders. JV with JAC and Hefei Guoxian Holdings to build eVTOL production base, leveraging respective advantages; specific JV details still under discussion.

Q: On financials, trends in R&D and management expenses for 2025.

A: Sales and R&D expenses will grow, management expenses moderately. Expense growth ratio to revenue will continue declining as revenue growth outpaces expense growth.

Q: On EH216 battery progress and VT-35 update.

A: Pursuing fast charging and solid-state batteries, with solid-state battery R&D progressing well, aiming for mass production by end of year. VT-35 prototype in final assembly, plan to complete full function flight testing soon and initiate airworthiness certification.