The initial batch of EHang 216-S produced based on its 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 the sustained development of the UAM ecosystem and emerging industries hinge on 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 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 the strategic partnerships with Bao’an District Government of Shenzhen and the Hefei Municipal Government. These governmental collaborations involve providing support in terms of policies, infrastructures, applications and subsidized to EHang, aimed at facilitating industrial growth and applications within these regions. Serving as Shenzhen’s gateway and a key transit hub in the Greater Bay Area, Bao’an District aims to become a pioneering zone for low-altitude economy innovation and development in China, and its plans to build over 100 low-altitude aircraft and verti-ports along with the launch of a more than 50 UAV routes by 2025. Currently, in strategic partnership with the EHang, Bao’an actively expediting its establishment of a UAM Operation Demonstration Center at the OH Bay with the plan to initiate aerial tourism and the local sightseeing services with EHang 216-S.
Hefei City, serving as a central area for low-altitude airspace managements reform in Anhui Province, and as the regional general aviation service hub, is actively fostering the development of a low-altitude industry cluster. The Hefei Municipal Government intends to provide EHang with a total value of US$100 million support, including facilitating purchase orders and financing support. Additionally, Hefei is dedicated to promoting the utilization of our UAVs across various low-altitude scenarios, including culture and tourism, emergency transportation, air logistics and firefighting, et cetera. Meanwhile, we will plan to launch regular operations with our AVVs in Luogang 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.
Conor Yang: 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 analyses 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 was RMB28.6 million, an increase of 248% from RMB8.2 million in the same period last year, and 186% increase compared to RMB10 million in second quarter. The increase was primarily attributed to the increase in our sales volume of EH216 series products. We delivered 13 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 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 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 RMB54 million, down 9.5% from RMB59.7 million in the same period last year and down 7% from RMB58.1 million in the second quarter. These decreases were primarily due to a reduction in professional service fees and a 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 RMB34.2 million, an improvement from a loss of RMB52.9 million in the same period last year and a loss of RMB51.3 million in the second quarter. Adjusted net loss was RMB31.3 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 have RMB295.6 million of cash, cash equivalent, short-term investment and restricted short-term deposits. In July, we successfully concluded a private placement, securing US$23 million from long-term strategy investors. The funding will bolster our liquidity and provide support for technology advancement, business development and post-certification commercial operations.
