Gogoro Inc. (NASDAQ:GGR) Q4 2023 Earnings Call Transcript

Gogoro Inc. (NASDAQ:GGR) Q4 2023 Earnings Call Transcript February 7, 2024

Gogoro Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Welcome to the Gogoro Inc. 2023 Q4 earnings call. This conference call is now being recorded and broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. I’d like to turn the call over to the Gogoro team.

Unidentified Company Representative: Welcome to Gogoro’s 2023 Q4 earnings conference call hosted by our CEO, Horace Luke; and CFO, Bruce Aitken. Hopefully by now, you’ve seen our earnings release. If you haven’t, it is available on the Investor Relations tab of our website, investors.gogoro.com. We are hosting our earnings conference call via live webcast through Gogoro’s website, where you can also download all of their earnings release materials. We will also be displaying the materials on the webcast screen as we ago. If you’re joining us through the conference call, your dial-in lines are in listen-only mode. After Horace provides some of the business highlights from Q4 and our outlook for 2024, Bruce will go a bit deeper into the Q4 and full-year 2023 financial results.

And then we will open the line for Q&A and answer as many questions as time allows. As usual, we would like to remind everyone that today’s discussions may contain forward-looking statements that are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the forward-looking statements that appear in our press release and investor presentation provided today. And now, I would like to turn the call over to Horace.

Horace Luke: Thanks for joining our call today. We’re pleased to have this opportunity to meet with you and provide a summary of our fourth-quarter 2023 results, a recap on our 2023 full year, and share our outlook for 2024. We’ve already had a few key announcements and product launches in January as well as in Q4 of 2023. We launched the Gogoro Pulse, our new flagship vehicle just last week, and it is awesome. And I’m very proud of the work our team has done. We continue to innovate and redefine what is possible when it comes to electric mobility. The Gogoro Pulse demonstrates a big leap in our industry leadership in both vehicle design, smart technologies, user interaction, and vehicle performance, and will extend our lead in the electric two-wheeler industry.

We continue to extend our partnership with Apple, and with the latest Pulse vehicle, we’ll partner with Qualcomm to deliver the latest chipset to power state-of-the-art dashboard. Last week, we also announced a partnership with Copec Energy in Latin America, where we’ll be launching in Chile and Colombia in Q2. In Q4, we launched our Gogoro CrossOver vehicle, both in Taiwan and in India and commercially launched our battery swapping service in the Philippines. We also announced an agreement with Uber Eats in Taiwan to speed the transition of their delivery fleet riders to electric two wheelers. I’m excited to confirm that we are also progressing smoothly with the facility fill out of our first battery pack factory in India and have begun moving our state-of-the-art robotics equipment into the factory.

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Q&A Session

We’ll provide more detail on each of these throughout this call. 2023 was a year of relative economic and market challenges. Interest rates were increased by central governments. Monetary policy was tight. Economies around the world struggled to meet GDP growth projections and overall consumption slowed. We’re anticipating that 2024 will see a reduction in interest rates and that many elections around the world will result in more stable and predictability of government policies on critical questions like energy consumption and the transition to clean green energy. In the Taiwan market in Q4, according to the Ministry of Transportation, the total number of registered scooter was 263,917, up 32% from Q4 of 2022. The total number of registered electric scooter in Q4 in Taiwan was 22,092 units, down from 25,505 in Q4 of last year.

Of these electric scooters, approximately 18,721 or 85% were Gogoro-powered vehicle and 16,680, 76%, were Gogoro-branded vehicles. Total registered scooters for the full year of 2023 was 870,608 units, up 19% from 2022. Total electric scooters for the full-year 2023 was 79,766, down 9% from 2022. Both electric powered two-wheelers and powered by Gogoro network markets were impacted by the continued deep discount and price war between the Taiwanese ICE vehicle manufacturers as well as the increased purchase of ICE vehicles as a last call effort from December 2023 discontinuation of certain government subsidies for scooter purchases. As you may recall, for the past few years, consumers in Taiwan who retired an older gas vehicle would get a subsidy from the government on buying a new one.

The good news is that EV subsidies from Taiwan central and local government will continue for 2024. While the overall consumer adoption of EV is not occurring as quickly as we would like in Taiwan, we are making continued inroads in with the consumer market and with a number of important government and fleet customers. And we do see government policies changing. An example of this openness to EV adoption is the Taipei Police Department which has been actively transforming their fleet of patrol scooters to electric vehicles. By the end of 2023, 100% of the electric vehicles in the Taipei Police Department fleet were Gogoro vehicles which are actively using our battery swapping network to ensure constant availability. Additionally, B2B and B2G fleet customers like Taiwan Power, DHL, Domino’s Pizza, and a variety of local governments are also deploying more and more two- and three-wheeler EV in Taiwan which are Gogoro or partner branded and use Gogoro battery swapping network.

We welcome the opportunity to work with B2G and B2B partners to achieve their sustainability and electrification goals. In December, we partnered with Uber Eats Taiwan for a two-year green delivery program. This program aims to facilitate a smooth and cost effective transformation to electric scooter for Uber Eats delivery partners. Riders in the program received discounts on new Gogoro smart scooters, access to Gogoro battery swapping, and incentives for deliveries made on Gogoro smart scooters. Through this collaboration, Uber Eats had indicated an expectation that EV deliveries on their platform in Taiwan will increase from 20% to 40% of all trips by the end of 2025. Gogoro is pleased to partner with Uber Eats to tailor vehicle purchases and battery swapping for delivery partners in Taiwan, encouraging more riders to deliver on a greener solution.

The program is expected to accelerate the EV transition leading to improvement in air quality in cities across Taiwan, and it will contribute both to the Taiwan 2050 net zero emissions goals and to Uber Eats global goal of achieving emission-free deliveries by 2040. This first collaboration can also serve as a template for other opportunities around the region. In the fourth quarter, we achieved significant milestone in India and the Philippines also. In India, in order to qualify for the available FAME II subsidies, both vehicle and battery packs must be made in India. In Q4, we made significant progress in both vehicle manufacturing as well as starting to deploy Go Stations in Delhi NCR area. In December 23, ’23, we introduced our first India-made smart scooter, the CrossOver GX 250 manufactured in Maharashtra.

This is Gogoro’s first India-made smart scooter. It incorporates a customized feature based on feedback from our pilot riders in India earlier in 2023, features such as larger wheels, higher clearance and more rugged chassis, and better suspension. All of these enhancement made the vehicle more rugged, safer, and more comfortable even under very demanding road conditions. There are a number of CrossOver variants which are expected to be available throughout the year. Financing is an important part of purchase decision for many customers in India whether fleet owners or individual owners of vehicles who ride for fleets. Gogoro is the first foreign two-wheel OEM to be empaneled by the Small Industry Development Bank of India, SIDBI, and we thank SIDBI for their support and partnership to get our vehicle registered for this low cost financing program which is intended to accelerate EV adoption.

The partnership with the Maharashtra government that we announced last year continues to be crucially important to our expansion in India. In addition to our vehicle manufacturing, we are already well underway in building our first automated Robo battery pack manufacturing facility in Maharashtra, and we expect to be fully operational in the factory by the middle of the year. As always, we’re grateful for the support of the Maharashtra state government. India’s central and state governments are playing a crucial role in the transition of energy policy to minimize the health impacts of pollution and spur the adoption of electric vehicles. Policies range from outright subsidies on purchase of an EV with FAME II to a variety of benefits from EV adoption including tax incentive, local purchase subsidies, access to lower cost financing, toll fees, waivers, parking incentives, and benefits in the permitting process.