Core Viewpoint - KEPLO aims to become the "Model 3 of the RV industry" by entering the mass market with its innovative range-extended trailers designed for the North American market, addressing the pain points of traditional RV experiences [4][10]. Company Overview - KEPLO, established in 2023, has recently completed an angel financing round of 45 million RMB (approximately 6.3 million USD) from well-known investment institutions and family offices [5]. - The company is currently in the mass production testing and market validation phase for its first product, with plans to launch and start pre-sales soon, targeting official deliveries in the U.S. market by Q3 2026 [5]. Team Background - The founding team, led by Lü Jiangtao, has deep ties to Li Auto and includes members with experience from major automotive companies like Volkswagen, Daimler, and BMW, as well as senior executives from U.S. RV companies [7][8]. - The team has a strong background in product development, smart technology, supply chain, and manufacturing, which is crucial for KEPLO's mission [8]. Market Insights - The U.S. RV market has a significant scale, with an estimated ownership of over 10 million units and an annual market size of approximately 30 billion USD (around 217.6 billion RMB) [9]. - KEPLO's research indicates that traditional RVs lack innovation and comfort, while emerging electric RV companies face challenges related to local supply chains and high costs [9]. Product Strategy - KEPLO's first product is priced around 80,000 USD, with plans to cover a price range from 40,000 to 100,000 USD in its product line [10]. - The company has established a factory with a capacity of 10,000 units, leveraging its experience and supply chain advantages in China to penetrate the electric RV market [10]. Technological Approach - KEPLO focuses on using range-extending technology to alleviate users' concerns about mileage and charging, particularly in remote areas where RVs are often used [8][9]. - The company believes that the integration of electrification and intelligence can redefine RVs as mobile living spaces, enhancing the overall user experience [9].

Financial Data and Key Metrics Changes - Net sales grew 23% year over year to $16.2 million, marking the third consecutive quarter of revenue growth [5][19] - Gross profit increased 45.4% to $4.6 million, with gross margin expanding 430 basis points to 28.3% [19] - Operating expenses decreased to $7.9 million from $9.9 million, reflecting lower R&D costs [19] - Net loss improved to $7 million or $0.58 per share, compared to a net loss of $13.6 million or $2.02 per share [19] - Adjusted EBITDA improved to negative $2.2 million from negative $6.2 million [19] Business Line Data and Key Metrics Changes - OEM segment net sales rose over 50% year over year to $10.1 million, driven by strong adoption of solutions [5][19] - DTC segment net sales were $5.9 million, down from $6.5 million due to macroeconomic uncertainties [6][19] Market Data and Key Metrics Changes - The company noted a shift in the industry towards premium features and value-added offerings, contrasting with previous cost-reduction strategies [6] - The heavy-duty trucking market remains challenging, but pilot programs are showing positive results [16] Company Strategy and Development Direction - The company is focused on expanding OEM partnerships and leveraging engineering capabilities to deliver integrated solutions [6][11] - Domestic manufacturing capabilities are emphasized as a strategic advantage in a volatile trade environment [8][9] - The company is committed to innovation, recently granted a patent for a non-flammable all-solid-state battery program [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to capitalize on growth opportunities despite a challenging macro environment [11][21] - The company anticipates net sales of $15.9 million in Q3, representing approximately 25% year-over-year growth [21] - Management is optimistic about the ramp-up of pilot programs in the heavy-duty trucking sector [30] Other Important Information - The company completed a public offering raising $5.5 million to support expansion into adjacent markets [10] - The company has optimized its capital structure by exchanging preferred shares for common stock, eliminating associated interest payments [10] Q&A Session Summary Question: When do you expect pilot programs in heavy-duty trucking to impact P&L? - Management expects revenue impact in the first half of next year as fleets await new truck orders [25] Question: How should tariffs impact P&L in the coming quarters? - Management has managed tariff impacts through better inventory pricing and onshoring components, maintaining confidence in managing costs [27][28] Question: Should we expect sequential improvement in Q4? - Management anticipates sequential improvement driven by RV industry growth and new market contributions [31] Question: Can you discuss the recent patent awarded? - The patent relates to the preparation of feedstock for solid-state batteries, crucial for the dry electrode process [34]