So, just wondering what is leading to the differential in gross margin. And also related to that, management mentioned that next year, we’re expecting to see a great gross margin enhancement. Obviously, we know the cost reduction is pretty on track even ahead of our progress, but then how much price decline are we factored into the — this gross margin expectation? Because we see that this year, for the three quarters this year, and average ASP actually declined by 6% year-over-year. So how much of the competition are we factoring in into next year in terms of gross margin guidance? Thank you.
Brian Gu: So Tina, let me — this is Brian. Let me first answer your first question. The guidance of 60,000 this quarter, I think, reflect our confidence of the progress we’ve made in the recent months. We think it’s actually a very poor milestone for us to reach on average 20,000 per month. So this is, I think, is a very, I would say, important milestone for us. And also by giving this guidance, we also are considering the competition as well as the macroeconomic backdrop that we’re facing in the Q4. We are very confident with the guidance, because, obviously, backlog we have already, as well as the momentum we’re seeing in our order intake. But I think this is also reflective of the market at the moment and we hope that this is a realistic target for us. And I’ll hand over to James for the gross [margin] (ph) comments.
James Wu: Yes, Tina. From a gross margin perspective, first of all, as we talked about earlier, even if we compare to — on a year-over-year basis, the reduction in margin came from, as you mentioned, the G3 EOP impact that we have booked in this quarter. And this is — this will be the final impact from the G3 EOP perspective. And secondly, going into 2023, the new energy vehicle subsidy has been removed from the market and that, obviously, has an impact on our margin as well. You did mention our ASP has reduced over time. I believe that’s overall market dynamic as well, because we are — we’ve been trying to improve the product competitiveness for our product as well throughout this journey. In the meantime, as Xiaopeng mentioned, we do expect our gross margin to improve in Q4 meaningfully, particularly our vehicle margin will become positive, we believe in the fourth quarter.
And one proving factor as we improve our product mix is that, as we launch the new G9 2024, we see the gross profit margin is actually higher than our older version of G9. This is a great proving point for us to continue to drive profitability of our products. I hope hopefully that answers your question.
Tina Hou: [Foreign Language] I just have a very quick follow-up. So in terms of the cost reduction technology improvement cost reduction, which are the models that can benefit from the cost reduction? Thank you.
Xiaopeng He: [Foreign Language] [interrupted] All of the models that we have will benefit from the cost reduction, driven by technology advancement. But among our top selling models, we are going to put more efforts into driving up the cost reduction. Thank you.
Operator: Your next question comes from Paul Gung with UBS. Please go ahead.
Paul Gong: [Foreign Language] So my first question is regarding the positioning of the MONA brand. I understand the pricing point is generally lower than our main brands, but it’s not really too much lower. And how shall we differentiate the brand positioning of the two brands? Is MONA also going to be available at our current stores to be sold to [indiscernible].
Xiaopeng He: [Foreign Language] [interrupted] Thank you. We are going to disclose more information regarding MONA next year, I mean, 2024. We’ll talk about this new brand in terms of its branding positioning, its channels and after sales services. And right now, we are actively preparing for the launch of MONA for next year. One thing that I can’t address or I can share is that, there’s definitely going to separate channels — going to have separate channels to sell MONA with — apart from our current XPeng lineups.
Paul Gong: [Foreign Language] So my question — my second question is regarding your earlier comments. You have discussed with Volkswagen regarding the global markets. How do you think the business model between Stellantis and the motor that’s bring the Chinese products, leverage with global OEMs, global footprint and bring to the global market. Would that accelerate your globalization in terms of the market reach?
Charles Zhang: Hey Paul, this is Charles here. I’ll address the question. I think first of all, our joint development on the — for the model based on the G9 platform has been going on really efficiently. And I think we’re going to achieve a milestone very soon. And I think the international market collaboration is one of the strategic initiatives we are exploring with our partner Volkswagen. And I think that we are — I think Volkswagen has global manufacturing footprint and also the supply chain capabilities. I think there’s a lot of areas we can learn from our partner and also leverage each other’s strength in the international market. We wouldn’t comment on other companies’ collaboration model. Thank you.
Paul Gong: Thank you.
Operator: Your next question comes from [Ping Hui Wu] (ph) with CITIC Securities. Please go ahead.
Unidentified Analyst: [Foreign Language] So my first question is about — to sell cars in the lower tier markets, how do we think of the demand for the lower tier cities and how do we utilize our strengths in those markets? [Foreign Language] My second question is about the research and development for the 2024. What will — will the R&D total amount like increase next year? And where will this money be spent on? Thank you.
