EHang Holdings Ltd

NASDAQ:EH

Earnings Call Analysis

Company's Q3 Revenue and FY2023 Outlook

In Q3, revenue soared to 28.6 million, marking a 248% year-over-year and 186% quarter-over-quarter increase, driven by EH216 series sales. Deliveries rose by 225% year-over-year and EH216's higher average selling price enhanced gross margin to 64.6%. Adjusted operating expenses fell by 9.5%, resulting in a reduced operating loss of 34.2 million, and a smaller adjusted net loss of 31.3 million. The company's cash position stands strong at 295.6 million. For Q4, the revenue forecast is 56 million, signifying a 257% year-over-year growth, and for FY2023, the anticipated total is about 118 million.

Strategic Shift to Commercial Operations and Revenue Growth

EHang, an urban mobility platform operator, has recently transitioned from product certification to commercial operations, having achieved certification for their EHang 216-S model. This shift introduces an integrated business model that includes product sales and operational services, with the third quarter indicating a marked increase in sales and a robust sales pipeline. The delivered units of the EHang 216 have more than tripled compared to the same period last year. With strong governmental and customer support, EHang anticipates heightened sales in China, bolstered by the significant interest from the Shenzhen and Hefei governments, aiming to pioneer low-altitude economy development and solidify a partnership worth $100 million in various supports, including purchase orders.

Substantial Revenue Growth with High Gross Margins

EHang's revenue soared by 248% year-over-year, reaching 28.6 million RMB in the third quarter, driven by increased sales volumes of the EH216 series. The company's strategy to capitalize on higher selling prices has led to impressive gross margins of over 64%, outshining competitors in the electric transportation sector. Moreover, significant improvements in adjusted net loss showcase EHang's ability to control costs and enhance operational efficiency. The company's strong cash position, complemented by a recent $23 million private placement, indicates healthy liquidity and a firm foundation for its technological and commercial advancements.

Strengthening International Presence and Technological Development

EHang's sales pipeline exceeds 450 units globally, signifying robust demand for their eVTOL aircraft. This includes extensive preorders from Asia and an expectancy to fulfill overseas deliveries following type certificate validations in various countries. The company is also engaged in product enhancements, particularly in power systems and battery technology, to cater to the increasing demands for longer-range capabilities. Moreover, EHang is committed to obtaining further certifications, such as for their logistics version, which will contribute to their diversified growth strategies alongside future international market penetrations.

Future Outlook and Financial Position

With a strong forecast for product deliveries and operational expansion, EHang is optimistic about generating positive cash flow by the latter part of 2024. The three-year outlook anticipates growing revenue streams from scenic spots within China, international orders due to type certification validations, and demand from transportation services. Additionally, other variants like the logistics and firefighter versions of the EH216 are projected to be significant revenue drivers. The company also foresees a stronger pricing position post-certification, which could lead to increased average selling prices, creating additional upside for future profitability.

Earnings Call Transcript 2023-Q3

[Operator]

Good day, ladies and gentlemen, thank you for standing by, and welcome to the EHang Third Quarter 2023 Earnings Conference Call. As a reminder, we are recording today's call.

Now I will turn the call over to Anne Ji, EHang's Senior Director of Investor Relations. Ms. Anne, please proceed.

[Anne Ji, executive]

Hello, everyone. Thank you for joining us on today's conference call to discuss the company's financial results for the third quarter of 2023. The earnings release is available on the company's IR website.

Please note that the conference call is being recorded, and the audio replay will be posted on the company's IR website.

On our call today, we have Mr. Huazhi Hu, our Founder, Chairman and the Chief Executive Officer; Mr. Xin Fang, Chief Operating Officer; Mr. Conor Yang, Chief Financial Officer and the Director of the Board. The management team will successfully give prepared remarks. Remarks that are delivered in Chinese will be followed by English translation. All translation is for convenience purpose only. In case of any discrepancy, management statement in the original language will prevail. A Q&A session will follow up towards.

Before we continue, please note that today's discussion will contain forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as the required under actable law.

Also, please note that all numbers presented are in RMB, and are for the third quarter of 2023, unless stated otherwise.

With that, let me now turn the call over to our CEO, Mr. Huazhi Hu. Please go ahead, Mr. Hu.

[Huazhi Hu, executive]

[Interpreted] This is the English translation of Mr. Hu's remarks.

Hello, everyone. Thank you all for joining our conference call today. The third quarter of 2023 marks a significant milestone in our journey. As we have successfully reached one of the most highly anticipated [indiscernible] achievements.

Our self-developed EHang 216-S passenger carrying unmanned aerial vehicle system has obtained the type certificate from the CAAC on October 13 this year, making it the world's first TC for an unmanned eVTOL aircraft.

It is not only a milestone for EHang, but also serves as a guiding light for the entire eVTOL industry, paving the way for its future development. As the saying goes, being the pioneer in the new industry is no easy feat. It requires innovation from the ground up and unwavering determination from the outset. At EHang, we have always been committed to this principle, to keep in mind our handful beginnings and never give up.

In the early days, when there were no established method for eVTOL airworthiness certification worldwide, we embarked on a journey of continuous exploration, experiment and improvement. It was in January 2021 that a CAAC officially accepted our TC application for the EHang 216-S. After that, over more than 1,000 [ data nights ] were persevered with relentless effort, overcoming challenges and demonstrating innovation.

We also faced additional hurdles posted by the epidemic. Today, we have successfully completed the entire process of TC certification, starting from scratch, leading the way for unmanned eVTOL type certification.

The EHang 216-S stands out as a disruptive and innovative product, boasting a range of unique features such as this all-electric nature, autonomous buying, fully backup systems and quester management, among others. As a result, it differs significantly from traditional piloted aircraft in terms of technical architecture, configuration, performance functionality, operation mode and in-flight environment.

Recognizing this, this [indiscernible] gathers a team of nearly 100 top experts from across the nation to review and certify EHang 216-S. Through a close collaboration between the EHang team and the CAAC review team, a rigorous and innovative approach was taken and established the world's first airworthiness certification standard for passenger carrying UAVs.

Guided by the principles of life first, safety first, these standard ensures that the EHang 216-S certified at the level of safety equivalent to that of a piloted aircraft. These standards led a solid foundation for the verification of the EHang 216-S, contributing Chinese wisdom managed solutions to the global development of the electric passenger carrying UAVs in the civil aviation, and the establishment of the comprehensive airworthiness certification standards.

The process of airworthiness certification is a rigorous one, with no shortcuts. Granted in the principles of science, comprehensiveness and safety, and the following the framework of [indiscernible] we, in cooperation with the CAAC have undertaken an extensive and complex review and verification process. This comprehensive approach encompasses multiple dimensions and disciplines, ensuring a meticulous and systematic evaluation.

Across the 12 professional subjects and 65 major categories, we have completed over 450 compliance test items. The 12 professional subject cover a wide range of areas, including flight performance, structure, design and configuration, electrical system, propulsion unit, flight control system, ground control station, communication and data link, [ airborne ] human computer interaction, general respect, continued airworthiness and system safety.

The compliance tests involved in assessing main material performance, structural strength, flame resistance, crush witness, gas toxicity, environmental conditions of equipment and systems, software simulation, data links, ground control station, overall system functionality, electromatic compatibility, [ flat ] performance and flight stability characteristics, et cetera.

Throughout the validation process, we meticulously scrutinized every component equipment and the entire aircraft for any potential defects, faults or interference. This scrutiny extended to both laboratory tests and flight tests.

Over 1,500 combined [indiscernible] rights, along with more than 40,000 [ safety ] record, EHang 216-S finally met all the requirements to complete the compliance review. The TC process has been conducted with a scientific rigor and authoritative oversight. The TC signifies that EHang 216-S is qualified for passenger carrying commercial operations. It also embarks the beginning of the new chapter as we are poised to take the leading commercial operations in the days to come.

I want to thank the entire team at EHang, as well as all the leaders and members of the CAAC and the review team for their support and dedicated efforts, and to all the people who support and are passionate about our development as well as the eVTOL industry.

However, we are fully aware that obtaining TC does not mean we have succeeded. Instead, it just makes the beginning of the new chapter for us. The TC has opened the door to rapid advancement in the unmanned aviation industry and the vast opportunities presented by the low-altitude economy. It will propel China's urban and mobility industry into the fast domain.

As a pioneer in this [indiscernible], we anticipate several firsts that await us to achieve on this journey. This included milestones such as the first EHang 216-S aircraft produced according to the TC, officially enrolling of the production line, and the first batch of EHang 216-S operation sites and the routes, the first commercial flight and the first passenger to buy a flight ticket. We invite you to stay tuned and witness these milestones as we progress forward.

Undoubtedly, prioritizing flight safety is of paramount importance in the aviation industry as it directly impacts the personal safety of every passenger. Throughout the past few years, we have conducted over 42,000 autonomous flights across 14 countries, establishing an outstanding track [ fly ] record.

As we enter a new phase of our commercial operations, we will continue to uphold our commitment to safe flights for a healthy and sustainable development of this industry.

At the production level, we maintain strict control of the quality standards of our aircraft. Based on obtaining [indiscernible], international aerospace and aviation quality management system certification, we are now actively collaborating with the CAAC to finalize the processing of our production certificate. This ensures that every aircraft producing mass quantities adheres to the airworthiness standards. and will be issued an airworthiness certificate and efficiently delivered to our customers.

Regarding operations, we are advancing towards commercial operations of EHang 216-S in an orderly manner. We are undertaking comprehensible preparations, such as enhancing safety operation regulations, conducting personnel training, constructing [indiscernible], establishing maintenance and service systems and obtaining operational licenses and insurance.

Furthermore, in our [indiscernible] this year, our Unmanned Aircraft Cloud System received approval for trial operations from the CAAC, which serves a significant foundation for our upcoming commercial operations. It also plays a better role in ensuring the safety and investment of large-scale operations of our unmanned eVTOL aircraft.

At the commercial operation stage, we will take a proper pace and approach of our development with a responsible mindset by prioritizing the public safety and fostering industry development. Initially, we have set restrictions on the usage and operational conditions of EHang 216-S, primarily focusing on sightseeing and short distance passenger flight.

Adhering to the principle of progressive risks and conduct a trial operation while advancing certification, we plan to gradually lift the restrictions, expanding operations scenarios into the broader range of urban mobility applications, including airport shuttles and fully autonomous urban air taxis, et cetera.

Throughout this process, EHang remains dedicated to enhancing our product, advancing fundamental restriction development and achieving milestones, such as the test flights with high energy density batteries, and test flight our [indiscernible] and cruise eVTOL, such as the VT-30, alongside its air worthiness certification.

These efforts will be geared towards achieving significant development in our flight performance. To achieve safe, autonomous and eco-friendly and mobility, it's not only a long-standing commitment for EHang, but also a shared goal for human kind. Facing a long journey ahead, we are aware of the significant responsibilities and ambition as the pioneer of our innovations.

Our dedication remains and we bring, guided by the core principles of the Chinese civil aviation industry, a reverence for life, regulations and duties. We are reloading our pursuit of strategic goals, are evenly contributing towards the high-quality development of the civil aviation industry, thereby making meaningful progress in advancing this innovative sector.

Now I will hand over the call to our Chief Operating Officer, Mr. Xing Fang. Thank you.

[Xin Fang, executive]

[Foreign Language]

[Interpreted]

This is the English translation of Mr. Fang's remarks. .

Thank you, Mr. Hu, and hello, everyone. The achievement of the EHang 216-S TC in October this year makes EHang transition from the product certification phase to the next stage of commercial operations, aligned with our strategic positioning as an urban mobility platform operator. The company is set to implement an integrated business model, driven by both product sales and operational services. Therefore, production, sales and operations are the 3 key drivers to our business growth.

I will now share the latest updates and plans of our company in these 3 areas. Regarding sales, we successfully delivered 13 units of EHang 216 Series product in the third quarter, marking a notable year-over-year and quarter-over-quarter growth. With the EHang 216-S receiving [ CTC ], we've seen a significant increase in business collaborations and product purchase demand from customers around the globe, especially from China. For instance, Shenzhen [indiscernible] intends to purchase 100 units of EHang 216- S, and we have delivered the initial 5 units for operational preparations.

Moreover, in accordance with our strategic partnership, the Hefei municipal government is set to facilitate orders for at least 100 units of EHang 216 Series products. As of now, the total sales pipeline for the EHang-216 Series in China have more than 245 units, which will be delivered in phases as per customer's requirements.

Regarding production, guided by the CAAC Central and [ Southern ] Regional Administration, we are steadily moving towards producing EHang 216-S according to its TC at our [indiscernible] factory. The initial batch of EHang 216-S produced based on TC is scheduled to roll out our production line for deliveries to our customers in the fourth quarter of 2023.

In terms of operations, the growth and sustained development of the UAM ecosystem and emerging industries, [indiscernible] strategic government planning and policies. We are glad to see that just before the EHang 216-S obtains TC, China issued a green aviation manufacturing industry development outline 2023 to 2035, jointly by the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance and the CAAC to encourage eVTOL operations by 2025.

Moreover, recently, many local governments in China have introduced a series of supportive policies to cultivate robust and sustainable growth in the low-altitude economy, establishing a stable policy foundation for our UAV operations in China.

Since the third quarter, we have entered strategic partnerships with Bao'an District Government of Shenzhen, and Hefei municipal government. These governmental collaborations involve providing support in terms of policies, infrastructure, applications and the subsdies to EHang, aimed at facilitating industrial growth and applications within this region.

Serving as Shenzhen's gateway and a key transit hub in the Greater Bay Area, Bao'an District aims to become a pioneer [indiscernible] zone for low-altitude economy innovation and development in China, and is plan to build over 100 low-altitude aircraft [indiscernible], along with the launch of more than 50 UAV routes by 2025.

Currently, in strategic partnership with EHang, Bao'an's actively [indiscernible] is establishment of a UAM operation demonstration center at the OH Bay, with a plan to initiate aero tourism and the local sightseeing services with EHang 216-S.

[indiscernible], serving as a central area for low-altitude airspace management reform in [indiscernible] province and as the regional general aviation service hub is actively fostering the development of the low-altitude industry cluster. The Hefei municipal government intends to provide EHang with a total value of USD 100 million support, including facility in purchase orders and financing support.

Additionally, Hefei's dedicated to promote the utilization of our UAVs across various low-altitude scenarios, including culture and tourism, emergency transportation, air logistics and fire fighting, et cetera.

Meanwhile, we will plan to launch regular operations with our UAVs in [indiscernible] Central Park in Hefei.

Internationally, following by obtaining a TC from the CAAC, we are proactively engaging in efforts to secure a bilateral recognition and certification from various civil aviation authorities through communication and collaborations with our local customers and partners. This will position us well for the next phase of delivering international orders and expanding our business abroad.

Next, I will turn the call over to our CFO, Conor. Thanks.

[Chia-Hung Yang, executive]

Thank you, Mr. Fang. Hello, everyone. This is Conor. Before I go into details, please note that all numbers presented are in RMB and are for the third quarter of 2023, unless stated otherwise. Detailed analysis are contained in our earnings press release, which is available on our IR website.

I will now highlight about some of the key points here. In third quarter, total revenue were 28.6 million, an increase of 248% from 8.2 million in the same period last year, and 186% increase compared to 10 million in the second quarter. The increase were primarily attributed to the increase in our sales volume of EH216 Series products.

We delivered letting units of EH216, up 225% year-over-year, and 160% quarter-over-quarter. We've been seeing growing demand for our products upon obtaining the TC and expect our revenue to further increase and cash flow generation continue to strengthen in the next few quarters.

Gross margin continued to stand at a high level of 64.6% in third quarter, an increase of 4.4 percentage points from 60.2% in the second quarter, primarily driven by higher average selling price of our EH216. Furthermore, our distinctive advantage in the UAM industry allow us to enjoy higher margin over other type of electric transportation vehicles.

In third quarter, our adjusted operating expenses, which are operating expenses excluding share-based compensation expenses, were 54 million, down 9.5% from 59.7 million in the same period last year, and down 7% from 58.1 million in the second quarter. This decrease was primarily due to a reduction in professional service fees and healthier situation in accounts receivable compared to last year, demonstrating effective cost control and improved operational efficiency.

As a result, our adjusted operating loss in third quarter was 34.2 million, an improvement from a loss of 52.9 million in the same period last year, and a loss of 51.3 million in the second quarter. Adjusted net loss was 31.3 million, a significant reduction of 43.1% year-over-year and a reduction of 39.5% quarter-over-quarter.

Turning to our balance sheet. Our stringent approach to cash and liquidity management is reflected in our cash position. As of the end of third quarter, we had 295.6 million of cash, cash equivalents, short-term investments and restricted short-term deposits.

In July, we successfully concluded a private placement, securing USD 23 million for long-term strategic investors. The funding will bolster our liquidity and provide support for technology advancement, business development and post-certification commercial operations.

We are confident in our cash position will be sufficient to meet cash needs for us to reach cash flow positive status in the near future.

Starting from this quarter, we will provide revenue guidance for the next quarter in our earnings results. We are optimistic about our post TC commercial operations. We anticipate achieving revenue of about 56 million for fourth quarter, representing an increase of 257% year-over-year and an increase of 96% quarter-over-quarter. For the fiscal year 2023, we expect total revenues to be about 118 million, up 166% from last year.

Looking forward, as we sell and deliver more products per customer's request and steadily expand our commercial operations in the future, our cash flow will improve, and we are confident that the company can generate positive cash flow in later part of 2024.

That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.

[Operator]

[Operator Instructions] The first question come from the line of Tim [indiscernible] from Morgan Stanley.

[Unknown Analyst]

Congratulations on receiving the type certificate from CAAC. I'm Tim's colleague and will ask the question on behalf of him as he lost his voice due to a bad cold.

Just a quick question about order backlog. Can we get a sense of the composition of current order backlog in terms of geographic mix and model mix? When [indiscernible] EHang's revenue and the company has obtained the type certificate.

[Chia-Hung Yang, executive]

Thank you for the question. Currently, our sales pipeline reached more than 450 units of unmanned eVTOL aircraft from China and the other part of Asia. This includes more than 245 units from domestic customers and 210 units of preorders from Asian overseas market.

There are also other countries -- from other countries that will be delivered after obtaining validation TC in these respective countries. And over 90% of our sales pipeline in the domestic and Asian markets are for EH216 [indiscernible] and less than 10% orders from EH216-S [ logistic ] version and also EH216 firefighter version. This sales pipeline will be delivered in stages per our customers' request.

For instance, our [indiscernible] customers, they typically start with an initial purchase of 3 to 10 units for training and trial operations and local [indiscernible]. Subsequently, as operations expand and demand increase, they will buy more products. So this purchase timeline typically span 1 to 3 years.

So we can see a significant increase in delivery volume in the fourth quarter upon obtaining the TC. Moving forward, we will provide revenue guidance for the next quarter in our quarterly financial reports.

[Operator]

We are now going to proceed with our next question. And the questions come from the line of [indiscernible] from Goldman Sachs.

[Unknown Analyst]

Just a quick one. What's EHang's progress on getting TC certification in overseas market like Middle East or some other countries?

[Huazhi Hu, executive]

My English is poor, I need a translator by [indiscernible].

[Foreign Language]

[Interpreted] Okay. The type certificate, we have obtained it by the CAAC. As we all know, in the past few years, the CAAC has reached a lot of bilateral regulation agreement with other aviation authorities in other countries.

We're promoting the communication between the CAAC and with other civil aviation authorities. For example, recently, the Brazil Civil Aviation Authority has came to China. So first, we will prioritize the -- to work on the regions that we have orders in the local market.

We believe we will make efforts to promote the VTC procedure, which means the verification of the type certificates in the local countries. And we will provide support to that work. Before we obtain the VTC, we can deliver some products to the local market and do some trainings for the local clients.

We will extend our market expansions at a proper pace to the international market. We believe that soon, we will see our global exposures. So the VTC is an administrative work. So it's not as complicated as the type certificate.

Yes. No, that's my answer.

[Operator]

The questions come from the line of [indiscernible] from TF.

[Unknown Analyst]

Okay. So I have 2 questions from my side. And the first one is about EH216. So I would like to ask whether the company see need to upgrade the products so as to increase the range and mileage, judging from the current feedback from the demand side? And if so, what is the timeline and the cost outlook?

And the second question is about air work [indiscernible] certification, EH216-S logistics version. What is the expected time to get TC?

[Huazhi Hu, executive]

[Interpreted]

Thanks for your question. The EHang 216-S is designed for the short-distance air transportation with the industry.

So according to our test, our product is capable to the air taxi services within the city. In order to achieve the longer flight time, we will continue to optimize our power system and the battery system.

Yes. As you know that there are many companies in China have invested in the solid-state lithium batteries, for example, the [indiscernible]. And recently, we have also invested in a domestic solid-state lithium battery company.

So we are making efforts to achieve the goal that to -- to tackle the right performance in the future. Our goal is to achieve a longer flight range, but meanwhile, we will ensure safety.

During -- we are doing the [indiscernible] with the EHang 216, the biggest [indiscernible] development pace is much lower. But now we are after the type classification of EHang 216. We are also developing and working on the long-range model, which is the VT-30, a lease and cruise model for the intercity, longer range in mobility.

The EHang 216L have obtained the operations, trial operation certificate for the cargo transportation previously. So after, there is certification standards for this kind of aircraft, we will supply for type certification for the EHang 216L.

Before we obtain the type certificate of the EHang 216L, we can still expand our business based on the trial operation permit that we have obtained.

As the EHang 216L and S share the same flight platform, so we can leverage the experience from the type certification for the passenger model. so we can expect to take short of time on the EH216L type certification than [indiscernible] the passenger one.

[Operator]

And the questions come from the line of Laura Lee from Deutsche Bank.

[Unknown Analyst]

And congratulations on receiving the first type certificates. My first question is, we have already talked about the backlog orders, but just a clarification on this. Would you expect to be able to collect deposits? And also, will we expect the first customer paying flights to occur?

And my second question is, how should we think about the cash burn trajectory and your future financing plans?

[Chia-Hung Yang, executive]

For your first question, as mentioned before that we are -- after securing the TC, we have seen a surge in interest in inquiries form many domestic and global customers. For our preorder and order of intent, we charge a small nonrefundable deposits, which varies by customers to confirm their commitment to purchase. And for the [indiscernible] order, right now, we will collect about 30% for down payment. And then for the remaining 60% to 70% before delivered.

So for your second question on the cash burn situation and capital, our current average monthly cash burn rate of our operation is less than RMB 10 million or roughly less than about USD 1.4 million. At the end of the third quarter, we have [ 295.6 ] million of cash, cash equivalents, short-term investment and [indiscernible] deposits. Therefore, we believe that our current cash and cash equivalents of our anticipated cash flow from operations will be sufficient to meet our anticipated working capital requirements.

Looking forward, as we sell and deliver more products per customer's request and steadily expand our commercial operations in the future, our cash flow will improve, and we are confident that our company can generate positive cash flow in the later part of 2024.

[Operator]

And the questions come from the line of Yu Chan from [indiscernible] Securities.

[Unknown Analyst]

[Foreign Language]

[Chia-Hung Yang, executive]

I kind of [indiscernible]. Your first question is, how about the order for the next 2 years. And then the validation of type certificate in overseas, how long it will take. And thirdly, regarding the [indiscernible] price of 216.

As we see that our guidance for the [ first ] quarter, basically, the 216 volume has increased a lot. And for the next 3 years, actually, I will say that the first year of -- next year of 2024, the majority of the order will come from domestic [indiscernible] places or a scenic spot in China. We expect that in China, there are over 6,000 scenic that can fly our products in their location to enhance their revenue.

Even we use like a 10% penetration rate in each site, [indiscernible], that will be like over 3,000 216 demand from domestic scenic spot in the next several years.

So 2024, we'll see a strong demand coming out from a scenic spot in China. And the application for overseas validation of TC, will be a lot shorter than the TC we have obtained from CAAC. We are expecting that roughly about -- should not be -- maybe [ 12 ] months more or less for the local and for the foreign government to get approval for validation TC.

So even though we have seen a strong demand from globally right now, but we're expecting, given a year of getting validation TC from different countries globally, we're expecting that global demand will come in a great way in 2025. So in 2025, the growth driver will be the domestic scenic spot demand as well as the international orders in 2025.

And then it comes to the later part of 2025, for transportation purpose demand of our 216 will start to contribute a meaningful portion of our business after 1 to 2 years, build-out for the infrastructure and in cooperation with the local government in China.

So 2026, there will be 3 ways of revenue contribution orders. So first one is, again, the domestic scenic spot and; secondly, global order; and thirdly, for transportation purpose of 216. So all these will be -- will contribute a lot of our revenue in the next 3 years.

And other than that, our logistics version of 216, as well as the firefighter version of 216 will also provide a strong growth driver for our revenue going forward.

And regarding to the [ ASP ] of 216, yes, we saw that the slight increase of ASP third quarter versus second quarter. And especially after we obtain TC, we will have a strong position in our pricing, right? So [indiscernible] -- sorry, RMB 2.16 million per selling price, that's the listed selling price, and we sometimes give certain discounts to our customers. But after we obtain TC, we think the pricing will be stronger. So we should expect a slightly increase on the ASP. And especially, if those over the coming [indiscernible] from overseas, we can even show a lot higher prices.

So gradually, looking forward that there is also upside on the [indiscernible] price for 216.

[Operator]

Thank you. Seeing no more questions in the queue, let me turn back the call to Ms. Anne for closing remarks.

[Anne Ji, executive]

Thank you, operator, and thank you all for participating on today's call. If you have any further questions, please contact our [indiscernible] by e-mail or participating in our following investor events through the calendar information provided on our IR website. .

We appreciate your interest and look forward to our next earnings call. Thank you.

[Operator]

Thank you all again. This concludes the call. You may now all disconnect your lines. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]