ECARX Holdings Inc. Class A Ordinary shares Small-Cap Virtual Conference

Thank you. Thanks very much, Ashley, and thanks for everyone for joining.

We appreciate the opportunity to tell you more about ECARX. Let's flip onto the first slide, please. In summary, ECARX is a leading global automotive intelligence company. Very simply, what we provide is the intelligent brain that powers the next generation of software-defined, and increasingly AI-defined vehicles. We're a business that has its heritage in China, and that will remain an important market for us. Today, we're a global business. Our operations are global, our management team sits globally, we deliver for clients and customers globally, and our supply chain is global. We're proud to supply 28 different automotive brands across 18 different automakers, and this is a business that is road-tested. Our technology is in over 12 million vehicles driving around on the road today. We're fundamentally a technology company, and we have deep technical expertise.

Everything from the silicon layer, through the sensor stack, right up to the software that end users interact with on a daily basis. Last year, we generated $848 million of annual revenue, and we've now been EBITDA profitable for the last four consecutive quarters. We'll talk a bit today about the growth drivers in our business, but very simply, they are expanding our existing footprint. That means winning new platforms within our existing automaker customer base, expanding into new geographies, expanding that list of 28 brands to new nameplates, and there's a very strong structural product growth tailwind behind us. That just means with each generation of product that we produce and each generation of vehicle that our customers produce, we are doing more and more within that vehicle, which allows us to grow our share within that vehicle.

I mentioned that we have our heritage in China, but to be very clear, we are not dual-listed. We are not an ADR. We are NASDAQ-listed common stock trading in New York. I'll spend just a moment on our Q2 update, and then I'll go through, along with Peter, a bit more background on the business. We had a strong Q2, which we announced in August. Despite a challenging backdrop for the Chinese automotive sector, we were able to grow our revenue 45% year-on-year. Despite that strong revenue growth, we kept a very tight candle on costs. We were able to reduce our operating expenses by 11% year-on-year. We were able to close to double our gross margin to 19.8% for the quarter, and we were pleased to deliver our fourth consecutive quarter of EBITDA profitability. Moving on to what does ECARX do.

ECARX was founded in 2017 with the vision that the way that vehicles were produced today is inefficient and will change. That has very much been proved out over the last 10 years, but there's a huge amount of ground still to cover. For those not familiar with the automotive sector and how cars are architected, the typical way that a car was, and for a large extent still is produced, is the ECU paradigm, the electronic control unit paradigm. What that means is that all the technology within the car is on individual printed circuit boards, and there can be anywhere from 100 to 150 different ECUs spread out throughout the car, each doing a specific function through a hard-coded bit of circuitry.

That can be something relatively complex, like controlling the transmission, or it can be something very, very simple, such as making the windows go up and down or controlling the seat. This is embedded hardware. It cannot be ever updated because it's purely printed circuit boards. Each of these components is joined together. There's about a mile and a half of wiring within each passenger vehicle driving around of cars, and they communicate using a protocol that was developed when Ronald Reagan was in the White House and Microsoft Windows didn't exist. The thesis behind ECARX is that that's an inefficient way to develop any piece of technology, and that vehicles would change.

The thesis was, which has been proved out, that the right way to design a vehicle is you put a much more capable computer at the center of the vehicle, and that you define all of those functions increasingly, not through individual printed circuit boards, but through software. ECARX provides that solution, and we provide a full end-to-end solution for our customers. All the way from the silicon, which we'll talk about, whether we partner with names like NVIDIA, Arm, Qualcomm, or use our own incubator technology, SiEngine. We have our own middleware. We have our own user interface, which we use both inside and outside China through different solutions. We have our own autonomous solution, our own sensor stack, all the way up to the AI layer, which is becoming increasingly relevant for us as more and more compute moves into the vehicle.

I'll just talk briefly about our management team, and then I'll hand over to Peter to talk about our operations. Our heritage is in China, but now our entire management team sits outside of China. Our founder and Chief Executive Officer, Ziyu Shen, sits here in London at our headquarters, as does Peter Cirino, who you're going to hear from today, sits in London. Dylan Jeng, as a U.S. citizen, grew up in New York. He's based in Singapore, which is our Asia hub and our Asia headquarters. It's where we run procurement from, it's where we hold our IP, and it's where our finance function is based. Earlier this year, we were pleased to add to the board as Chairperson, Lone Fønss Schrøder. Lone is a highly established European business person. She's Danish. She is on the board of businesses that you would have heard of, like Volvo and IKEA.

With that, I will hand over to Peter to talk about our operations.

Over the past many years, ECARX has put a lot of effort in globalizing our operations, our supply chain, and across the board, our capabilities. We have as a strategic target for the business to generate more than 50% of our revenue outside of China by 2030. I think we are well on the way to doing that. We have clear line of sight to our 2028 target of more than 30%, and given the design cycles of the industry that we work in the automotive space, we have a very good handle on our potential and the booked business that backs up our 2030 target. What you see on the chart is our global footprint.

As we grew up in China, we have got a strong capability in many locations in China, and more and more of that capability is servicing the China market in a kind of China-for-China approach. As you can see, the number of other locations on the chart, we have built out capability in the global footprint that help us service, effectively, customers in South Asia, in Europe, and in South America that we are getting closer and closer to, and continue to serve in a great way. Our brands, as we mentioned, cover 28 different brands that we work with across 18 automakers. We are a proven business since in almost, let us say, the last 10 years, we have put ECARX technology onto little more than 12 million vehicles. We continue to scale that annually. Today, we are producing technology for somewhere in the range of 2.5 million to 3 million vehicles.

You can see we have some great iconic brands that we work with quite closely. We recently announced two different wins with Volkswagen Group that span a few of their individual car brands. We have also worked closely with Volvo over the years and have a number of programs with Renault. Then inside of China, you can see we certainly span many of the brands of the Geely organization, but we also have a tight working relationship with the FAW Group through their Hongqi brand, with China Changan Automobile Group, as well as Dongfeng Motor Group. We service a number of key brands both inside of China and in the global marketplace. As a business- Yes. Go ahead.

Just picking up on, what is the need that ECARX addresses for our automaker customers? There are four things that I want to really bring out. The first is that if you put yourselves in the shoes of, for instance, a European automaker, what you really need is state-of-the-art technological solutions that excite customers. If you are a European automaker, you have watched the Chinese automakers go from 1% to 10% market share within just a handful of years. While part of that might be competition on price, what they are also realizing is that a huge driver of purchasing decisions when it comes to vehicles is the technology that goes into it. ECARX meets that need. We compete and win in China, which is the most advanced, the most competitive, the most innovative auto tech environment anywhere in the world.