WeRide Inc. ($WRD)

Hello, and welcome to the 30th Deutsche Bank Depositary Receipts Virtual Investor Conference, dbVIC. My name is Zafar Aziz from the DR Investor Relations Advisory team at Deutsche Bank. I'm pleased to announce our next presentation will be from WeRide. Before handing over to our presenter, some points to note. Please submit your questions at any time throughout the presentation. Finally, all of today's presentations will be recorded and can be accessed via the Deutsche Bank website, adr.db.com. At this point, I'm very pleased to welcome our speaker from WeRide.

Thank you for the opportunity to introduce WeRide, a global leader in autonomous driving and technology. At WeRide, our mission is simple, yet ambitious to transform urban living with autonomous driving. We're building a universal autonomous driving platform that scales from, spans from L2+ passenger vehicle solution all the way to full driverless L4 mobility services, enabling safer, more efficient and more intelligent transportation system around the world. Founded in 2017, WeRide has quickly become one of the few global leader in autonomous driving space that has demonstrated the technology depth and the real-world operation and financial [indiscernible] simultaneously. And today, we operate in 12 countries and in more than 40 cities with trial and commercial operations spanning China, Middle East, Europe, Southeast Asia, and other parts of North Asia. The breadth matters because autonomous driving is not just a software challenge. It's regulatory, operational and localization challenge our ability to operate across like different like transportation system, legal framework and rider behaviors is a core strategic moat. And operationally, now WeRide manage one of the world's largest autonomous fleet that including more than 2,100 L4 autonomous vehicles and more than 1,100 robotaxis. The scale provides not only the revenue opportunity but also one of the richest real-world data loops in the industry. On the financial side, we just published our 2025 full year results, and our revenue increased 90% year-on-year and get to like RMB 685 million for the yearly revenue. And recently, we started to disclose more numbers on the Robotaxi operation. Here, you can see some of the latest number we have. In terms of the total cost of ownership, it has decreased 38%. It's mainly driven by the improved operational efficiency and lower vehicle BOM cost. On the second part, you can see we have a core ratio in our industry called Remote Assistance Ratio. In 2024, that number is 1:10, meaning like 1 remote safety officer can overlook 10 vehicles at the same time. Right now that ratio has improved to 1:40, which dramatically is a dramatic decrease in terms of like the safety officer cost. And also, we are -- we have like a significant improvement on the vehicle platform cost in 1 year time and that BOM cost has dropped by 15%. Mainly it's enabled by the new HPC 3.0 computing platform as well as like we are building in larger scale from factory L4 pre-installed robotaxis. So that also streamlining some of the expenses. In terms our robotaxi fleet size in China. We have more than 800 that's up and running every day, mainly in Beijing and in Guangzhou and soon in Shenzhen, you'll see a lot of robotaxis running on the street. In terms of the coverage like ODD, right now, the official like operation zone covers more than 1,000 square kilometers. And for some of the daily order numbers for the past 6 months average, every day, we have 15 daily orders for robotaxi and some of the peak time that number can go to 26. So even though in China, we are not breakeven yet, we think we are in the next year or so. There's a high likelihood as long -- since we are also expanding ODD, we can get to the breakeven for China Robotaxis season. And of course, given WeRide is one of the the key player globally, our outside China fleet has already way past the breakeven point. And since we're talking about the China operations, there are some of the other numbers we can disclose. Year-on-year, we have a 900% growth on the registered users, that shows like since we're expanding ODD and releasing more vehicles on the street, now we have the higher -- like user engagement, like rider engagement rate from the app. Also, we have launched the Free PUDO -- Free PUDO meaning free pickup and drop-off points, is unlimited pickup of points selection within the ODD, it's exactly the same, like pickup and drop-off mechanism that Uber or ODD those like major platforms are using. And we have already adopted the same like selection, point selection in robotaxi, and technically, there's a lot harder, for robotaxi to do this, but we managed to achieve this last year. And also in order to reach more riders. We also work with Alibaba's Amap as well as WeChat on the WeChat Mobility Program as well as their Mini Program, so that -- so we have broadened the domestic reach with the other major mobility platform. Yes. WeRide's global footprint is one of the strongest proved proof points of scalability. We have autonomous driving permit in 8 countries, and we have deployed autonomous vehicles in 12 countries. So if you're looking at our EV fleet outside China, it's over 250 robotaxis, that spans from like we have fleet in Japan and Singapore outside China and Asia. And in the Middle East, we have a quite large presence in UAE as well as in the Kingdom of Saudi Arabia. If we are looking at Europe here, we have the fleet in Belgium, in France, in Spain and in Switzerland as well as in Slovakia. So we do have a very global reach for our fleet. And Middle East is the standout success story. Like 2 years ago, WeRide very became the first company that secured like a national-wide autonomous driving license from the UAE federal government. And last year, we became the first company to secure a city level, fully driverless robotaxis commercial permits outside U.S. This is -- this means a lot to autonomous driving companies, because by having city-level permit to run robotaxi, which means like we have the flexibility to add on as many vehicles as possible to have a to get a higher penetration as well as to make sure that all of the robotaxi fleet can achieve a relatively high utilization rate. So it's one of the most like a significant and important permit we have so far. And speaking of Abu Dhabi, now our service covers nearly 70% of the city core area, and the market is already approaching -- it's -- if we were talking about WeRide and Uber which is also one of the main platforms we're operating. As a whole, we are reaching to the breakeven point under the driver out operation. And as for the WeRide side, if we're looking at the Middle East subsidiary at a stand-alone basis, it's already a profitable entity for the past 2 years. Yes. We have also launched the public robotaxi rides in Dubai, and WeRide, right now is the only public robotaxi service provider in Riyadh. So in the region, we have more than 200 robotaxis, making it one of the largest scaled robotaxi deployment outside China. Yes. In Europe, we secured the first driverless robotaxi permit for passenger service beginning in Switzerland, while we are also spanning to Slovakia and other market. This year, we'll announce we will enter into another 2 European key cities, major cities for the robotaxi deployment as well. So this is very strategically important because Europe's regulatory bar is exceptionally high. The early permit here is also a strong signal of like the safety credibility, in Europe or for WeRide. And in Singapore, we recommenced robotaxi and robobus public operation, creating a strategic like beachhead in the Southeast Asia. The ability for us to scale across Asia, Europe and the Middle East demonstrate that WeRide is building not just a tech stack, but it's a global autonomous mobility operating system. On the other side, on the L2+ side, we have launched the WePiot 3.0. This is a high-end L2++ solution. And we work with Tier 1 like the global like Tier 1, like Bosch, we have OEM partnerships, clients like Cherry and GAC. We have demonstrated industry leading performance, and recently, we have won 3 consecutive wins in the National Urban NOA competition. And our system delivers like -- like say, if we were talking about like the performance level, we can do a few hours, like driving in the city without intervention, most of the time. And in terms of the driving efficiency and the lower intervention and also as well as like the regulatory compliant behavior in a very complex urban environment, WeRide has demonstrated to be the best in the country so far. And later on in the slides, we'll talk about the competition result and how the competition is actually scored, yes. On the technical technology side, why we're different. The heart of WeRide differentiation is our WeRideOne, which is our universal autonomous driving technology platform. This platform integrates the software, hardware and cloud infrastructure into a reusable system that powers every product category from the L2+ assistant driving to fully driverless L4 vehicles. We have a few layers. So you can see we use the same like the software core, and that's including like the one-stage end-to-end. And that also includes all the perception, prediction, planning simulation layer, and then that can also be reused across different robotaxi robobus, robovan and the ADAS solution. So this dramatically shortened iteration cycles and reduced the margin of R&D cost per new product. And one of our most like underappreciated strength is ability to create a dual data flywheel between our L2+ and L4 system. Through the WePilot 3.0 our one-stage end-to-end L2+ solutions. We collect large-scale human driving and the L2+ -- like driving like data that enhanced all the robustness like [indiscernible] case understanding and policy learning across China and global. Those learning feed directly into the L4 system, which accelerating the model convergence and those long tail scenario performance. And this strategically power -- is very strategically powerful because it combines the scale of consumer ADAS data as well with the precision of the robotaxi standard type of like data quality. And also one of the core standout capability is WeRide GENESIS. This is our generative engineer neuro environment for simulation intelligence, in self driving. So what it means is like it's a huge like world model, like the simulation system, it can generate virtual driving environment in seconds, enable a rapid safety validation and also scenario expansion and in a very cost-efficient way that can -- we can also do a lot of the edge case testing in the system. So rather than waiting for the rare scenario to occur like in real world, on public road, the system can like synthesize both scenarios at scale and to make sure to make the algorithm more robust. So it significantly reduced our on-road testing cost while improving the static statistically and systematically on the safety validation side. So we have a few layers of the safety on the statistical safety on the behavior, safety and systemic safety for that. So with all of the three layers, it creates a safety architecture, not only for demos, but for the very large scale like public deployment. [Presentation]

And yes, so we -- last year, we upgraded our GXR to complete like pre-installed version. So from factory from the OEM factory, it's already everything, all the sensors are mounted and the computing unit are 100% auto grade. So now the entire vehicle 100% automotive grade. And on the computing side, it's 2,000 [indiscernible], which can -- reaches a powerful enough for L4 algorithm. And we have 1,000 lines lighter to increase the point cloud, and also, we extended the detection range to like a higher range of few hundred meters. And since now we are doing everything from the assembly line. So now the vehicle assembly time is shortened to under 10 minutes. Yes. This is the national like ADAS competition, we were just talking about. You can see WeRide's ADAS is embedded into the Chery ET, and this is the vehicle we take to the competition. We have won 3x consecutively for this National ADAS Competition. Even though the second or the third place always changes in different like stuff, like [indiscernible] that happens in March, and there's a [indiscernible] stop like in January and [indiscernible] stop in December. There's no -- there's no competition in February given this is Chinese New Year. And you can see the second and third place, always changes, but WeRide always remain to be #1 because our algorithm continuously to perform at its very best. And I can show you some of the scores and how they get the scores and ranking, on their like compliance like scores and efficiency scores. And if you can look at a number of interventions, only for like a few hours of the competition, even though it's under the very complex like a city scenario and WeRide have like very little intervention or no intervention, while others have a lot more intervention. And the completion time for WeRide vehicle is surely like short means like our efficiency of driving is high. So yes, so this is some of the core highlight for our L2+. And recently, we just launched another vehicle with GAC, which will be shown to be -- sorry, released in the market, and we have received very good feedback for the L2+ like performance. Finally, let's talk about some of the financial validation. In financial year 2025, we delivered a record high total revenue of over RMB 685 million, representing a 90% year-on-over year growth. More importantly, if you're looking at our Robotaxi revenue, it's grown like 210% year-over-year to RMB 148 million. So increasing its contribution from 13%, all the way to 22% on the total revenue. This is a major inflection point. Robotaxi is becoming a larger and more meaningful revenue driver for the company. And on the margin side, our margin always remains to be quite stable to get to an industry-leading 30% while our net loss narrowed significantly. So those are the -- so operationally, I think we are talking about our expansion plan and our current fleet size and expansion plan. So we believe our net loss will continue to shrink for the next few years and to get to the breakeven point. So to conclude, we combined some of the rare quality in autonomous driving. We have the world-class full-stack technology and a universal platform that spans from L2+ to L4, and we also have like [indiscernible] like global deployment footprint and rapidly, we're increasing the unit economics for Robotaxi. Okay.

So the first question is, quite a few new OEM and L2+ peers are also working on Robotaxi. What's your view? We see this as a positive validation of the long-term strategic importance of L4, and so we definitely welcome more players into the field. And L4 robotaxi, it's a $1 trillion like a total addressable market. So we understand the popularity for this market. That said, so moving from like L2+ assisted driving to a commercially scalable L4 robotaxi. It's not a linear extension. The core difference for L4 is, it requires the highest precision in terms of the safety. And also, it's a lot more in terms of like regulator approval, operational efficiency, and also to building the ecosystem on the local ground. So it is really a system level operational business. So it requires the safety redundancy, requires like you have a great like remote operation and the fleet dispatch and regulatory approval, rider experience and -- so you do have to reach to a city level unit economics in order to really to expand the fleet. So it's -- it's a completely different model from -- business model from L2+. On the tech stack side, WeRide is the leader in L2+ technology, and we're also the leader in the L4. And if we're talking about the core metrics for L2+ and L4, now even we compare our own stack, there's 250x to 300x difference in terms of the safety for our own L2+ and our L4. And if we're talking about other like competitors like L2+ to our L4 system, we think that the core, for the core like city metric, there's a 1,000x difference. While we'll still keep improving our L4 like safety metrics, we still think there is room to improve by like 10x to 100x. So it's very hard for other L2+ like players to catch up in what we -- is what we have built for so many years, and we remain to be leader in the L4 space. Yes. So while we are like -- there are many players entering into the space. We believe the winner will be defined by the leading technology and leading safety record as well as the global operational execution and the unit economic like scalability. And for all of that, those points WeRide remain strongly positioned Yes. I get the next question. Could you walk us through the key cost deduction and tech innovation especially behind the upgraded GXR okay? So the upgrade GXR, it's robotaxi GXR. It's a very important step in improving both the performance and the unit economic. From a cost perspective, we achieved approximately 15% BOM reduction. It's mainly driven by first, first of all, now it's the HPC upgrade. So the compute architecture upgrade moved to 100% auto grade and the significantly improved compute density and an equation is efficiency, and also the higher performance per model lowers the overall system complexity and improves the maintainability and sustainability. And we also have like a sensor optimization, we upgraded the sensor to the latest model provided by both both [indiscernible] and RoboSense. So that, the higher LiDAR -- like the 1,000 LiDar architecture, increased our point cloud resolution by 17x and extended the detection range to 600 meters. So this enables a long-range perception -- and well, they allow us to like to optimize the overall sensors with more efficiently on both like the performance and unit economic side. And also -- last but not least, it's on the manufacturing and assembly efficiency. Since we are now moving everything to pre-installed robotaxi from factory. So we can now reduce the single vehicle assembly time to below 10 minutes. So it's cost-wise, it's much more efficient for us. And beyond BOM, BOM is like only 15%, which is already a lot, but then the total TCO reduction, it is mainly due to the utilization and efficiency we just talked about. Like I say, we increased the remote safety ratio from 1:10 to 1:40, and now we have like a better lead density and improved utilization of the fleet. Those are the key drivers behind the commercial commercial upgrade, yes. Okay. Thanks, everyone, for listening to the presentation. If you have any questions, please reach out to IR weride.ai. We are happy to answer the investor's question. Thank you.