WeRide Inc. (WRD) Earnings Call Transcript & Summary

Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to WeRide's First Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that today's event is being recorded. The company's unaudited financial and operating results were released by the Newswire earlier today and are currently available online. Joining us today are WeRide's Founder, Chairman and CEO, Dr. Tony Han; and CFO, Ms. Jennifer Li. Before we continue, I would like to refer you to the safe harbor statement in the company's earnings press release, which also applies to this call as today's call will include forward-looking statements, including WeRide's strategies and future plans. These forward-looking statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. The company's actual results could differ materially from those stated or implied by these forward-looking statements as a result of various important factors, and please refer to the Risk Factors section of the company's Form 20-F filed with the SEC for a full disclosure of these risk factors. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please note that all numbers stated in management's prepared remarks are in RMB terms, and we will discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in the company's earnings release and filings with the SEC. With that, I'll now turn the call over to the company's Founder, Chairman and CEO, Dr. Tony Han. Please go ahead, sir.

Hello everyone. Thank you for joining us today. I am excited to give you an update on our last quarter. We have reached a number of new milestones as we continued our global expansion and also cemented deeper collaboration with key partners such as Uber. Specifically with Uber, we have committed to providing robotaxi services in 15 additional cities internationally, and accepted a commitment for an additional $100 million in equity investment on the heels of their initial investment at our IPO. Other notable milestones included launching the first driverless robotaxi testing in Abu Dhabi, the first of its kind in the Middle East. In China, we rolled out the country's first autonomous mobility service in the central area of Guangzhou, the #3 city in China. While some of this will be reflected in our near-term financial results, others lay the foundation for robust growth in the quarters to come. First, let's quickly discuss our latest Uber announcement. This expanded partnership and the incremental $100 million investment is a testament to our shared commitment to autonomous mobility and the confidence in our operational and technological excellence. We began our partnership with Uber in the Middle East and continue to scale our operations there. As a reminder, we first launched Abu Dhabi in December of last year and have recently announced plans to expand in Dubai. There has also been mentions of expansion to a third city recently in the press, so look out for more information there. We are excited by our progress in the region and the opportunity that it presents. In addition to the Middle East, we expect to scale and expand our robotaxi presence to other geographies such as Europe, with a particular focus on markets where we have already deployed some of our other autonomous mobility products, such as our autonomous buses. We believe having multiple autonomous mobility products widens our TAM, and also makes dialogs with stakeholders such as regulators more substantive. We continue to expand our autonomous mobility operations in China and abroad. As alluded to earlier, we launched fully driverless robotaxi testing in Abu Dhabi. This means that we will be the first company to have robotaxis running without safety drivers. At the same time, we also expanded our operational service to include new destinations such as Al Maryah Island and Al Reem Island, covering a range of vibrant areas in the city. Through this, you can see in action our phased approach to operational expansion. This phased approach allows us to ensure a high quality of service, while ensuring that we meet all regulatory and safety standards. To date, we have a leading safety track record in the commercial delivery of our services. In China, we expanded our robotaxi services in Beijing and Guangzhou. In Beijing, we added routes between the sub center of the city, Beijing Yizhuang and Beijing Railway Station, spanning over 600 square kilometers. In Guangzhou, we launched China's first 24/7 autonomous ride-hailing network and added 8 routes in the city center, connecting landmarks and transport hubs such as the airport, Guangzhou South Railway Station, Canton Tower, and Canton Fair Complex. These routes cover more than 250 kilometers of public roads in a densely populated urban area with very busy traffic. Going forward, our robotaxi services in China will be integrated into Tencent Smart Transportation Mini Program on WeChat, to serve a wider user base in China. We also continue to expand our other autonomous mobility businesses. Our robobus has entered downtown Guangzhou, one of the most complex urban environments. This development follows our launch of the first robobus BRT route in the city last year. Robobus has now become an integral part of the daily life of Guangzhou citizens, who can easily hop on the driverless shuttle in the main districts, by simply tapping their city pass. It stands as a paradigm of the future mobility that we envision, where autonomous vehicles are fully integrated with the local transportation system, enabling safe and seamlessly movement for the communities. We are also making headway in the international markets, bringing our products to Switzerland, Spain and France. In March, our robobus was granted an operation permit by France, making WeRide the first and to date, the only autonomous driving company whose products have received operational approvals in 5 countries, including China, the UAE, Singapore, France and the U.S. Technology and safety are the cornerstone of our success. Our autonomous mobility products all operate atop what we call WeRide One, an autonomous driving technology platform designed to handle a broad spectrum of operational environments from complex urban settings, to full-day functionality and varying weather conditions. Its proven adaptability in a range of real-world applications provides a fundamental tech advantage over our peers. The high level of universality of WeRide One has recently demonstrated once again through our robovan W5, which secured Guangzhou's first group of driverless testing permits for logistic equipment in less than 3 months after the product launch. The powerful adaptability of WeRide One is further demonstrated by our real-world operations across a broad geographic area. The initial deployment of our AV fleets in a new city can be completed in just a couple of weeks, enabling rapid adoption for our partners. We believe safety is the best test of autonomous driving technology. In over 2,000 days of operations, our safety record is remaining industry leading. While we have iterated multiple times, we have not had any accident attributed to the failure of our autonomous driving systems. Our commitment to safety and transparency is key to earning the confidence of both regulators and partners. We also leverage our core autonomous mobility knowhow in our ADAS business. In April this year, we announced a partnership with QNX, a division of BlackBerry, to work together to enhance the safety and reliability of our ADAS solution. By integrating QNX OS for Safety into our ADAS system WePilot, WeRide is helping OEMs and Tier 1 companies fast-track the future of intelligent vehicles. I will now handover the call to our CFO, Jennifer Li, to discuss our financial results in more detail. Jennifer, please go ahead.

Thank you, Tony. Hello, everyone. Before we get into the financials, please note that all amounts are in RMB and all comparisons are on year-over-year basis, unless otherwise stated. Now let's discuss our first quarter financial performance. Total revenue for the first quarter of 2025 increased 1.8% to $72.4 million, primarily driven by the growth in product revenue, which was partially offset by a slight decline in our service revenue. Robotaxi has been one of the core drivers in our business. Following our achieving record-high robotaxi revenue for the financial year of 2024, we continued with this momentum in the first quarter this year with robotaxi revenue of $16.1 million. Robotaxi's contribution in group revenue reaches 22.3%, rising from 11.9% of the same period of 2024. Product revenue delivered strong growth, increasing by 46.7% to $9.5 million for the first quarter. This encouraging growth was primarily driven by a substantial increase in the sales of robotaxis and robosweepers, which were introduced into new international markets with expanded operations. [Audio Gap] $62.9 million, primarily due to a reduction of $33.5 million in revenue from ADAS research and development services as the customized R&D projects for certain clients had been completed in 2024. This decline was partially offset by an increase of $29.8 million in revenue from intelligent data services and an increase of $1.9 million in revenue from operational and technical support services, as technical support engagements increased in this quarter, along with the transition into the operation phase of certain projects. We recorded a group level gross margin of 35.0%, representing a gross margin for product of 49.9%, and a gross margin for service of 32.8%, respectively. This reflects a sustaining improvement of our business structure, in line with our robotaxi business expansion and globalized commercialization. We are building a sustainable business model by engaging trusted partners and localized deployment. It helps us sustain a healthy gross profit level. Now, turning into our operating expenses. We recorded a rise of 14.2% for the first quarter, amounting to $463.5 million. The increase was driven by a 48.4% rise in personnel-related expenses compared to the same period of 2024. We remain highly cost conscious and disciplined. The increase of operating expenses is mainly driven by our incremental R&D efforts. In this important phase of development, we prioritize strategic investments in talent acquisition and retention to drive our technological advancement. Combining with our expansion of selling and marketing activities, we aim to solidify our leading position by laying a sustainable foundation. To further break down, R&D expense represents 70.3% of operating expenses. This line item increased by 17.3% to $325.7 million compared to the same period of 2024. Excluding share-based compensation, R&D expenses increased by 54% to $278 million. Administrative expense increased by 5.2% to $123.9 million compared to the same period of 2024. Excluding SBC, administrative expense increased by 105.8% to $73.9 million. Selling expense increased by 32.4% to $13.9 million compared to the same period of 2024. Excluding SBC, selling expense were up 66.7% in the first quarter. Our net loss decreased by 17.7% to $385.1 million in the first quarter of 2025. On a non-IFRS basis, the net loss increased by 108.2% to $294.6 million, which was mainly contributed to our continuous investment in R&D. As of March 31, 2025, we held a total capital reserve of $6.2 billion, including $4.4 billion in cash, cash equivalent, and time deposits, $14.7 million in restricted cash, and $1.7 billion in financial assets measured at fair value through profit and loss. We believe that our strong cash capital position will continue to support our ongoing R&D initiatives and facilitate the expansion of our growing global business. On a separate note, our Board has recently authorized a share repurchase program under which the company may repurchase up to $100 million of its Class A ordinary shares over the next 12 months. It indicates a vote of confidence in our business fundamentals, growth trajectory and long-term outlook. In conclusion, we feel encouraged by our financial performance of the first quarter. As we continue to scale our operations with additional deployments underway in international markets, we are confident to build on this success and to turn global opportunity into long-term value for our stakeholders. With that, operator, we're now ready to take on questions.

[Operator Instructions] We will now take our first question from the line of Tim Hsiao from Morgan Stanley.

This is Tim from Morgan Stanley. I have 2 questions and those are related to collaboration with Uber. So the first question we noticed that Tony briefly touched on the collaboration with Uber at the beginning of the call. Just wanted to quickly follow up on why WeRide and Uber decided to expand this partnership. It'd be great if you can share more colors on the deal with us. That's my first question.

Okay. I will take this question. Thank you, Tim, for this question. So first of all, I think our expanded partnership with Uber builds on our proven model. This model is demonstrated by our successful integration of WeRide robotaxis into Uber's app in Abu Dhabi. Under this collaboration, WeRide delivers our tried-and-tested autonomous driving product. Uber will manage fleet operations and customer access via its platform. Together, we are also announced a joint robotaxi launch in Dubai, where we are currently finalizing mapping and expect to begin operations soon. So I want to talk about this strong collaboration. We have committed to deploying services across 15 major global cities within the next 5 years. This is a significant milestone for our scalable autonomous mobility. And I think this partnership combines WeRide's world-class autonomous driving technology and international expertise with Uber's unparalleled marketplace reach and operational excellence. And also, I want to re-emphasize as a testament of this alignment, Uber is already our shareholder and will invest an additional USD100 million in WeRide over the next 6 months. To my best knowledge, this ranks among Uber's largest investments in non-affiliated autonomous driving companies. Besides, you know, beyond the technology, I think mission is very important. Our shared mission is to make autonomous mobility affordable and accessible world widely. WeRide operates in over 30 cities across 10 countries, with our research R&D, testing and commercial deployments. When entering new markets, you know, we are not just solving the mobility challenges, we want to invest in local ecosystems by creating jobs in fleet management, maintenance, and customer support. So we have a community-oriented approach to ensure sustainable growth, and I think we share this kind of mission with Uber. We also believe that by leveraging both companies' leadership in our respective fields, we can accelerate the global adoption of autonomous mobility services. So I think in terms of technology, mission and approach and the shared value, I think Uber and WeRide are well aligned, and we are very excited for the next 5 years, we expand 15 cities globally.

Great. Thank you very much for sharing the all the details, Tony. And just another quick follow up on the collaboration. So according to the announcement also what you just shared, out of the 15 cities and probably others, the potential global markets, which regions or market would be the main focus to WeRide for the robotaxi rollout? And in the following quarters, any cycles or milestones investors should monitor? Yes, that's my second question.

About the regions of focus currently, you know, we are focusing on markets mainly in Europe and the Middle East. so we are going to take a phased approach. So basically, we are not going to roll out like a robotaxi service in one night in 15 cities simultaneously. Basically, we want to add cities one by one. So new cities will come online each year, maybe probably 3 new cities every year. It's just a rough estimate. And we're following a pattern of regulatory approval and then testing and then commercial operation and then scale deployment. So there are 4 stages. These 4 stages have been approved in our current deployment in Abu Dhabi. And I think soon it will also be approved in Dubai. And cities will be chosen based on favorable policies, guidelines and the initiatives of autonomous driving. And also, we look forward to really maximize social value, and also want to create value for our long-term stakeholders.

Our next question comes from the line of Liping Zhao from CICC.

Congrats for the strong robotaxi revenue in this quarter. I got 2 questions here. First, could you share with us your robotaxi economics? How should we consider the cost structure as you scale? And second, could you please share more about your recent roll out at Guangzhou city center? When should we expect you to start providing robotaxi service in the whole city?

I will take the first question, Tony will take the second. And for the first question on the robotaxi economics, let's just take a look at the numbers. In the conventional ride-hailing, driver takes home roughly 60% of each fare, that's 6 out of every 10. Robotaxis revolutionize this model by reducing the driver cost to nearly nothing. Yes, we still have vehicle expenses for robotaxis which is slightly higher than traditional taxi, but eliminating the 60% cost changes everything about the business model. And cost optimization has been one of our key focuses and we are making cautious continued progress of it. First, let's talk about vehicle cost. Leveraging on the booming and like very mature EV supply chain in China, we have access to components of high quality and competitive pricing. Second, we have also built in-depth collaboration with global OEMs such as Renault and Nissan. And thirdly, we adopt a modularized design of our sensors suite which enable -- enabling 90% shared components across different autonomous driving products. We also converted to the most cost-effective semi-solid LiDAR a few years ago. So leveraging all of those, our autonomous vehicles are quite cost competitive. For instance, the cost of our sensor suite has reduced by more than 70% over the past five years. And going forward, with the more integrated design and increasing adoption of redundant drive-by-wire chassis, we anticipate another 20% to 30% headroom for future cost reduction for the next-gen of robotaxi. And today, we operate one of the world largest AV fleets globally, over 1,200 vehicles, with more than 500 dedicated robotaxis. All of our vehicles use the standardized tech as well as similar sensors, same computing platform. This will give us tremendous buying power and make the maintenance so much simpler in the long run. Our OEM partnerships will help -- helps us keep optimizing every part of the supply chain. So in short, compared to the traditional taxi and ride-hailing services, robotaxi is expected to be 50% or more cost-effective in developed markets. We're doing testing and operation of AV in 10 countries already. We're seeing that on the ground confirms a very critical pain point, many markets are facing very severe driver shortages. Also there is a growing challenge in hiring and the retention of the drivers. This is exactly where our solution makes the difference. And by working hand-in-hand with our local partners, we're not just deploying technology, we're solving real transportation crises caused by the labor shortage. That's all for the first question Liping raised. Tony, I will leave you to the second question on the Guangzhou plan.

I believe the second question is about like you want to discuss a little bit about our recent rollout in Guangzhou city center, and then also, you know, want some details about our robotaxi service. So first of all, I want to say last week, we launched China's first 24/7 autonomous ride-hailing network covering the core areas of Guangzhou. As I mentioned, Guangzhou is the #3 city in China, and our expanded robotaxi service, which was actually 8 pilot operation routes in the city center, connecting landmarks and transport hubs such as the airport, Guangzhou South Railway Station, Canton Tower, and the Canton Fair Complex. If you are familiar with Guangzhou, you know, they are all the most busiest and also the most important place and hubs. And probably if you come to Guangzhou, you will visit these places. And when we first kicked off commercial robotaxi service back in the year of 2019, we started in Guangzhou. You know, this is a mega city with very busy traffic, and the population is at least 20 million. To date, we have been providing autonomous mobility service to the local citizens for more than 2,000 days. I'm quite confident and quite proud for this achievement. The expansion of this service is a very important milestone in the industry. For the first time, robotaxi is allowed in the central area of such a big city. That's not easy, actually. It incorporates some of the most complicated scenarios we have ever seen, including various road types and traffic conditions, as well as very subtle interactions with a wide range of road users, like passenger cars, engineering cars, pedestrians, cyclists, three-wheelers. You have to handle all of this. So it is a big challenge to our technology, but I think we've solved all these issues quite well. And also, being allowed to operate in central Guangzhou underscores our confidence in safety record and robust technology. And we will strive to maintain a high standard of service. And we will also be very careful. We will expand progressively and responsibly in accordance with the requirements of local authorities. I think that's all I want to say about this question.

Our next question comes from the line of Joel Ying from Nomura.

This is Joel from Nomura, and I have 2 two questions. For the first one, what's the implication of the recent launch of driverless testing in Abu Dhabi? Is there any operation plan as the next step? And my second question is, since we see some aggressive OEMs also plan to enter into robotaxi business, so what's our company's view on it? Are they comparative compared to level 4 players, given they have more driving data? And what is our edge on this?

I'll take the first question. We're very excited about the driverless testing in Abu Dhabi. To my knowledge, this is the first of its kind in the Middle East. And it's also the first time that robotaxi without safety driver on public road is allowed outside China and U.S. WeRide is a veteran in the Middle East. We started the robotaxi trial in UAE as early as 2021. The desert climate of the country, including high temperatures and a sandy environment, created all these special challenges to autonomous vehicles. Nevertheless, our robotaxi fleet delivers a high level of reliability and safety during the initial 2-year public operation. Building on this confidence, WeRide secured the first national autonomous driving permit in UAE in 2023, which also remains the only national permit in the world as of today. Last year, our local operation entered into a new chapter -- sorry, as we joined forces with Uber. Speaking of our joint forces with Uber, it also allows us to provide local citizens with better services and accessibility. So the driverless testing marks a major milestone as they begin driverless testing. This is a significant leap forward in our journey in Middle East. We are also particularly excited to have received approval to expand our service area to include Abu Dhabi's Al Maryah Island and Al Reem communities. Both islands where we see most dynamic urban center in Abu Dhabi, we're very excited to bring the cutting-edge transportation solution to those places. So now Tony, I'll leave it to the next question.

This question is really deep. And I really appreciate this question. So the question is about like our competition against major car OEMs for robotaxi service, and my view and our edge. First of all, I want to say, the competition is ubiquitous. You know, if you are afraid of competition, you are not eligible to be a leading company. WeRide is the first mover and the leading company in the autonomous industry. So we welcome competition. As long as the winner can bring the best quality of service, the most reliable robotaxi service to ordinary people and citizens, I think that would be great enough. But we are confident with WeRide because, first of all, I think, our proven record has already shown the superiority of our technology and also the reliability of our technology. And over the past seven years, we have been closely working with some major car OEMs. Major car OEMs help us to build the reliable vehicle platforms for robotaxi service. And I want to say OEMs actually play a very important part in the whole ecosystem. We did learn a lot from them. Having all these said, I want to emphasize the difference between ADAS system and the robotaxi system. ADAS system stands for Advanced Driver Assistance System, so the major components who are responsible for driving the car is the person. L4 level robotaxi is for autonomous driving vehicle. They are 2 different things, 2 different species. Mistakenly using ADAS for robotaxi is just like mistakenly using an L2 system for L3 system. It will lead to very tragic accidents. I think some accidents we have already experienced. So I want to emphasize, if you really want to do robotaxi, do L4, you'll really need to spend a lot of time, a lot of energy in simulation platform in robotaxi fleet, sharpen your technology and test for millions of miles. Only having a big user base is not enough. Lot of times, a big user base only tells you that your car is very good, can produce a very good L2 system, but there is nothing to do, you can do a L4 system. So basically a warrior, a great warrior on the land may be not-so-good warrior in sea warfare. So they are totally different. So today WeRide real world robotaxi operation in multiple locations is actually supported by continuous investment in building and improving our platform. And the safety has been proved. We want to very proudly announce that over the past 7 years, we have a very good record. We haven't experienced any autonomous driving system failure. I think that's a very remarkable score. Currently, WeRide is one of very few companies that have brought L4 mobility to the public and we are really confident to maintain a leading position in this industry. Okay. Thank you for this question. That's all I want to say about this question.

Our next question comes from the line of Yawen Tan from BNP Paribas.

This is Yawen from BNP. Thanks for Tony and Jennifer's time. And thanks for opportunities to discuss the exciting industry here. And I have 2 questions. The first one is, is there any specific plan for further expansion of the fleet size and operation area? And secondly, what's your view on regulations in different markets? Have we seen there are countries that are accelerating the adoption of L4 technology?

I will take the first question for the plan for future expansion. So as robotaxi is penetrating traditional mobility in different regions, will remain a balanced strategy between China market and international markets. So in China, we will gradually increase the deployments in selected Tier 1 cities. Our service was rolled out step-by-step and which is in accordance with this adoption roadmap by the local authority. We have a track record of more than 5 years public operation in China. And our recent development that entered into the city center in both Beijing and Guangzhou is natural progress built on the existing momentum. And we'll keep on the momentum -- riding on the momentum. And in overseas market, we'll be scaling through strong global partnerships. So by working together with mobility and transportation stakeholders worldwide, we'll be able to localize and accelerate our deployment in the international market more effectively. For example, some of our global partners, including like say in UAE, we have the Integrated Transportation Center in Abu Dhabi and the Road and Transportation Authority in Dubai that are extremely helpful. And in France, we have Renault, beti, and MACIF as our partner. And in Switzerland, we have the SBB, which is the Swiss National Railway. And we have the Canton of Zurich and Swiss Transit Lab that are also -- we are working on multiple projects in Switzerland as well. And in Singapore, we have ComfortDelGro and Chye Thiam Maintenance in Singapore. And we also have, in Germany, we have Bosch as a key partner. Last but not least, Uber is a key partner with our plan, rolling out commercial robotaxi service in 15 new cities globally. So like I said, if we're talking about the size, the expansion plan, so all those cities we're planning to enter typically already have existing ride-hailing and taxi ecosystem that range from a few thousand to tens of thousands of shared mobility vehicles. So this is an ideal environment for L4 technology to integrate and to scale up. As part of this partnership, WeRide robotaxi service will be available through Uber's app and Uber will be responsible for the fleet operation. So as you can see, our global partner strategy is based on our shared execution, risk management and local market insight. We are not entering into the new market alone. We are building a network of trusted global collaborators to accelerate adoption, to shorten the deployment cycle and to meet the regulator's expectations of each region together. Tony, I'll leave you to the next question on the regulation in different markets.

Okay. So I'll talk about the regulations of different markets. And actually, there are markets that are favorable to autonomous driving vehicles. And so currently, I want to name a few, like several countries in the Middle East, like UAE and Saudi, and also several countries in Europe. Of course, China is very, very welcome and is also very -- China is actually fostering autonomous driving vehicles. And so these are the major markets we want to deploy. So actually, there are also -- for the cities actually -- for the countries, if they really want to welcome or embrace the autonomous driving vehicle, that's because of there are several factors they could consider. Number 1 is the safety. Number 2 is the cost of labors. So you need to take all of these factors into account. And also, in these regions, for the countries that favor autonomous driving or need autonomous driving or need robotaxi service, I think that represents huge opportunities for first movers like WeRide. We experienced this kind of increasing interest in AV technology. And actually this kind of increasing interest can be demonstrated by our expansion and our operation. I just want to name a few, actually. In January and May, we rolled out our robotaxi and robobus service in Guangzhou city center successfully. That one I have already mentioned. In February, we received approval to launch our GXR for fully unmanned paid ride-hailing service in Beijing, just only 4 months after we officially announced the new purpose-built robotaxi GXR. And in March, we obtained Level 4 operation permit in France. In April, we partnered with Dubai's Road and Transport Authority and Uber to integrate our robotaxi fleet into Dubai's public transportation system. I can't wait for this to come, because in our dream, our mission is to deploy robotaxi all over the world. In May, we have started further driverless testing in Abu Dhabi. Actually, I'm currently in Abu Dhabi. I just tested, and I think it's fantastic. We now have deployed in 10 countries across Asia, Middle East and Europe. From our experience, we understand that regulators are generally supportive towards autonomous driving, but conditioned on we can keep our track record for safety. Overall, we are really optimistic about the future, and we believe WeRide is well positioned to capture the expanding penetration for autonomous driving technology. That's my answer to this question. Thank you for this question.

We will now take the next question from the line of [ Tian Kuang Hu from China Securities ].

My first question is, is there any new product development that you could share, especially robotaxi?

Okay. So new product, we are actually -- last October, we launched a new generation of robotaxi, GXR, which is really a purpose-built robotaxi tailored for L4 driverless. We also trimmed it for the deployment in the Middle East. Today, the temperature is like 40 degrees Celsius. You have to have a car that has very powerful AC and a very big battery. We actually upgraded our GXR to make it more suitable. It's a purpose-built robotaxi to make it more suitable for the market of Abu Dhabi and Dubai. To work on this, we worked closely with Geely Farizon to customize GXR. We spent tons of time and efforts on it. Now, our proprietary Sensor Suite 5.6 and our HPC are ready and integrated into GXR, and it's very suitable for the extreme heat weather condition. We also worked on a redundant system. The whole system, the GXR, is full redundancy, several rounds of redundancy, so that we have a very reliable and stable braking and steering system. There's another thing I want to mention for the new product, new things, like that is, we are going to further upgrade GXR with the computational platform. In the second half of the year, we will build our computational platform by newest NVIDIA's DRIVE Thor Platform, as you have probably noticed. NVIDIA's next-generation Thor platform is extremely powerful, and it has the whole computational power -- the whole computational power in our controller is actually more than 2,000 TOPS. For the past 5 years, we also tried to reduce the cost. The cost of our sensor suite has reduced by more than 70%, so we want to do it through innovation and new products. For the next generation of robotaxi, currently under development, I think we look forward to another 20% to 30% cost reduction. And further details, we will review it after the spec is finalized. So there are a lot of new things ongoing. That's the real happiness of working on robotaxi and this AI stuff. New things comes every day. And we believe that with a powerful and smart brain, the new GXR will not only provide a high level of safety and comfortability, it will also -- our new purpose-built GXR will redefine the robotaxi business. And this car is ready for large deployment. I really look forward to seeing the large deployment of GXR in Abu Dhabi and Dubai. Okay? That's my answer to this question.

I have another question. My second question is, what's your view on the growing level of competition in China as more companies are rolling out autonomous driving technology?

As I mentioned in my answers in the previous questions, as a leading global company, you have to face all kinds of competition, either globally or inside China, either from a car OEM or from ADAS system company or from robotaxi -- another robotaxi company. So for my view is like the competition is good. I love the beauty of free market, right? Through trading, through competition, the customers can get the most cost-effective and high-quality products. What's wrong with that? That's a great thing. And -- but the thing is, are you worried about losing in this competition? I think the past 8 years of record has already shown WeRide grew from a 10-people startup to a leading autonomous driving company with more than 2,000 employees. It has already proved that when we have nothing, we only have a few people, a very small firm, we can start to grow. And now we are in a very advantageous and in a leading position. We are very confident. So I always mention like we have 4 core pillars that set WeRide apart from the competition. The 4 pillars, I want to name them one by one. The first is tech competence. Technology is always our foundation. Second, proven business model. And we are really looking to the large-scale deployment and also deploying global market. Third one is the safety and reliability record. Please go ahead and check the record. I believe WeRide has the best safety record all over the world. And the fourth pillar is strong partnership network. If I have time -- do I still have some time? I want to elaborate actually the 4 pillars. Thanks for this question. So first of all, technology one, over the past 8 years, we built up WeRide One universal platform that can be deployed to use for robotaxi, robobus, robosweeper, robovan, and ADAS System. At the same time, you get data from all over these 5 branches. So basically, you are 5x more efficient in collecting data, collecting common cases, and 5x more efficient in improving your idea. You are deploying largescale, not only in robotaxi fleet, but also in robovan, in robosweeper. That's a grand vision from WeRide. I think no other company has such a grand vision. And I think no other company has achieved concrete steps for such a great grand vision. And for proven business, look at our operation. I think I'm quite proud. And every step, we have created a repeatable, scalable, and monetizable business model across multiple verticals, including mobility, logistics, and sanitation. So that proves actually our autonomous solution can address a variety of real-world challenges. So we operate in 30 cities across 10 countries. So that means like the business model approved not in a time frame, but also globally. Third pillar, safety and reliable record. I want to read you something about some record. So our L4 autonomous vehicle has undergone successful tests and commercial deployment in diverse and extreme environments, including urban villages in China, such as congested and unpredictable road environments in downtown Guangzhou. And in very northern part of China, Heihe, that is like 30 Celsius degrees below 0 in winter, and also in Abu Dhabi, the high heat, where I'm currently sitting in the office, 40 degrees Celsius. We show that we can still operate safely. Last one, very strong partnership. We emphasize many times our collaboration with Uber, with all different local authorities in Switzerland, France, Singapore, UAE, and Japan. And we also have multiple partners in Singapore, like Resorts World Sentosa and the robobus operation. So I won't be able to name them. This is a very long list. And also for ADAS system, we work with the top one Tier 1 supplier, Bosch. So with all of these, I think from a competition, we are confident. And I think that's also the value of WeRide, okay? That's my answer to this question.

Our next question comes from Leo You from CLSA.

I want to ask about the use of cash. So we are quite excited about the share repurchase program. Would you please share more about your thoughts behind rolling out the program now, and how would you strike a balance between the shareholder returns and investing in technology and products?

I'll take this question. Thank you, Leo. So the Board has authorized a share repurchase of USD100 million, which reflects their strong confidence in the company's solid foundation, and leading position in the autonomous driving industry and compiling long-term growth trajectory. And the proposed raise structure can be made from time to time in the form of compliant transactions. So we think this initiative can allow us opportunistically to buy back shares when we see the opportunity, which is also demonstrating our commitment to deliver value to the shareholder while maintaining our financial flexibility for future growth.

I have another question on the financial part. So can you share more about the growth drivers behind the product revenue and service revenue in the first quarter, and how do you see the trend of the revenue line growth?

Yes. At this stage, our growth momentum for first quarter is primarily attributed to the growth of the robotaxi business and our global expansion. So at this stage, given all the revenue for different product lines is still relatively small. So we think we'll just like focusing on the product itself instead of like breaking down, because the product and service mix changes every quarter. And sometimes when we deliver like a mega project for one quarter, so the product revenue can significantly increase. And on a different quarter, while the service revenue can be the dominant factor for the quarter. And then let's -- if we're talking about the robotaxi service, robotaxi as a business, so this is our core business from day 1 and so the revenue contribution for robotaxi witnessed a significant increase of 10.4% year-on-year, which marking up like 22% of the total revenue of this quarter. This is based on our knowledge and it is also the largest published, announced robotaxi revenue among the peers. And the margin level, we're still at a very healthy level of around like gross margin of around 35%. So yes.

Thank you. There are no further questions. I'd like to hand the conference back to our management for closing remarks.

Okay. So everyone, thank you again for your participation. I'd also like to take this opportunity to thank our partners and our employees. I have to say, none of the progress is possible without their support and hard work. And we look forward to speaking with everyone again in our next call. Goodbye.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.