We have O&M. We have all those different kinds of costs. And electricity is part but it’s not a major part of our overall cost structure. We are analyzing what should we do from a pass that cost on to consumer basis. And what we’re hoping to do is maybe increase price slightly, but give customers a rebate so that they feel bought in to the process. We’re still discussing those plans internally. At this stage if worst-case scenario, we chose not to pass any cost on the consumer the percentage there is small enough that it would not have a dramatic impact on our margin. And so balancing between internal cost pressure versus asking customers to pay a little bit extra is the challenge. Frankly, customers in the electric recharging battery swapping world don’t think of their bill, as having a component being the cost of power from the grid.
Somehow despite the fact that in the external market for traditional gas, the prices go up and down, but in our world, people are really, really, really cost-conscious. So what that means is it’s difficult for us to pass those costs directly onto consumers at this time.
Bruce Aitken: Angelina, I think you were cutting out on the second question. I might not have heard it clear enough. Can you restate your question again, please?
Angelina Chen: So my question was, is the company’s overall progress in China — so we’re seeing, increasing bicycle sales in China. And I was wondering if you guys also see improvements for E2 wheeler in China as well and what is the company’s plan and strategy in China for the next couple of years?
Bruce Aitken: Okay. Well, as you know, we have established our partnership with Yadi and Da Changjiang, but Yadi being the largest e-cycle company in China and Da Changjiang being the largest ICE e-vehicle two wheeler in China. Over the last — over the duration of the partnership, Yadi has created multiple vehicles using our battery-swapping system. The partnership is really a joint venture between Yadi and Da Changjiang, leveraging Gogoro’s technology while we provide hardware components and enabling technology to enable them to build vehicles that are swapping ready. And I would say that the — overall in China, the ramp is still not as dramatic as we first thought it would be. We are operational in Hangzhou, where riders are mainly doing B2B delivery, because of the need for battery swapping.
When it comes to vehicles that are being built by Yadi, we see the usability as we expected. And then also there’s all kinds of discussion about how to expand that broader and acquire more customers.
Angelina Chen: Thank you so much, Horace and Bruce for answering the question. Very clear. Thank you.
Annie Liao: At this time, I would take an online question that would submit it. Renewable energy are currently cheaper than fossil fuels. Solar and wind farms will require large-scale energy storage. This is why companies like Tesla are selling power wall and power packs using lithium-iron phosphate to customers to help create our smart grid. Does Gogoro plan to enter this market by selling a smaller 10-battery slot swapping station to customers and allowing people around the world to build their own energy network using Gogoro smart batteries?
Horace Luke: Thank you for the question. The answer is, as we look at our — what batteries and what batteries can do, we do see great opportunities, especially around energy storage as well as power backup. With the Gogoro network today in Taiwan, we have, of course, 1.4 million batteries in circulation. A portion of that battery is sitting on the sideline, getting ready for a swap. But at the same time, we work with the Taiwan Power Company to develop technology and also refine our technology so that we can do everything from demand response to frequency response. And with the most recent — if you are keeping track with Taiwan news, you’ll find that we also have been working with TaiPower to take out batteries that we’re retiring in the future to store them in large racks where we can use the battery to service an industrial-grade UPS similar to what you’re speaking of a Powerwall.
Of course, there’s many other applications we can think about and as we look into the future, I think batteries both new batteries as well as consumed batteries that are first life used for mobility can certainly be something that we can leverage to build the product that you’re speaking of in the future.
Annie Liao: Thank you, Horace. We have time for one more online question. Does Gogoro have any plans to open up your battery ecosystem so that third-party manufacturer can create new vehicle applications such as drones, forklifts, golf carts to be powered by Gogoro batteries? Customers and third-party manufacturers can purchase Gogoro batteries and charging hardware as well to expand your revenue beyond scooters.
Horace Luke: Absolutely, thank you for the question. As we look at our batteries, think of our battery as just a very large battery. It can power everything from two-wheelers to three-wheelers to micro-four-wheelers as we have demonstrated in the Tokyo Auto Show with our partner in mobility through a consortium called MIH which is a Foxconn-led mobility platform doing a micro-compact four-wheeler that uses Gogoro battery as an augmented power source to extend range. Of course, we have investigated and prototyped many different type of vehicle including some of those vehicle types that you have mentioned. Absolutely. If somebody wants to use our battery and use our components we welcome the opportunity. And we think that [Technical Difficulty] powers just about anything. So absolutely, we think that’s something that we hope to see in the future.
