Good morning and good evening, everyone. Welcome to Cango Inc.'s Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. This call is also being broadcast live on the company's IR website. Joining us today are Mr. Jiayuan Lin, Chief Executive Officer, and Mr. Michael Zhang, Chief Financial Officer of the company. Following management's prepared remarks, we will conduct the Q&A session. Before we begin, I refer you to the Safe Harbor statement in the company's earnings release, which also applies to the conference call today as management will make forward-looking statements. With that said, I am now turning the call over to Mr. Jiayuan Lin, CEO of Cango. Please go ahead, sir.
Hello, everyone, and welcome to Cango's Second Quarter 2022 Earnings Call. During the second quarter, especially in May and April, lockdowns in Shanghai and other cities exacerbated supply chain challenges. Despite a series of favorable policies since June, demand in the automotive market has remained sluggish due to COVID's substantial impact on automotive manufacturing, logistics and retail sales, as well as heightened risk aversion and weakened consumer confidence amidst the pandemic. Facing these headwinds, we achieved total revenues of CNY 289 million in the second quarter, of which revenues from our car trading transactions business accounted for 219 million, or over 75.6% of our total revenues. Revenues from our traditional business lines, including automotive financing facilitation and aftermarket services facilitation totaled 25.114 million RMB.
In terms of revenue mix, our business model of car trading transaction platform with multiple monetization avenues is becoming more and more robust. Next, I would like to share the progress of both our trading platform business and traditional business lines in the second quarter. I'll begin with the car trading transactions platform business. As a one-stop platform serving car dealers nationwide, Cango is committed to providing safe, secure, sustained, and consistent end-to-end professional car trading transaction services for participants in both the upstream and downstream of the industry value chain. While current favorable government policies, including vehicle purchase tax relief and NEV promotion campaigns in rural areas focus primarily on car purchases, supporting services also need to be improved so as to truly make car sales easier for dealers and car purchases simpler and more enjoyable for consumers, especially in the lower tier markets.
Based on transaction scenarios, Cango addresses the unmet needs of medium and small-sized dealers by offering an array of services, spanning car sourcing, car supply, including self-owned cars, warehousing and logistics, and car financing and insurance. In this way, we have not only relieved the stresses of medium and small-sized dealers in the lower-tier markets in sourcing cars, customers and funds, helping them sell cars faster, but also provide ongoing opportunities for upstream OEMs to expand their market coverage to lower-tier markets. By empowering both the upstream and downstream sides of the industry, Cango enables more efficient and effective car transactions in the lower-tier markets.
在售自营车辆22款，涉及9个品牌，12个车系。第二季度平台共售车2,291台，其中含新能源车1,329台。
As of June 30th, 2022, Cango 好车 has engaged 8,237 dealers in 31 provinces in 305 cities. There are 22 self-owned vehicle models listed on our platform, including nine car brands and 12 car series. During the second quarter, we sold a total of 2,291 cars, including 1,329 NEVs.
尤其值得一提的是，继去年五月底推出灿谷好车微信小程序后，我们于今年六月中上线了灿谷好车APP，为车商伙伴提供系统更为强大、功能更加聚合的平台支持。截至六月底，仅上线两周的好车APP迁移及新增注册车商千余家，覆盖全国除西藏、港澳台以外的三十个省市自治区。
It is worth noting that following the debut of Cango 好车 WeChat Mini Program at the end of last May, we launched the Cango 好车 app in mid-June to provide more powerful platform support to dealers with highly aggregated features and functions. By the end of June, only two weeks after its launch, over 1,000 dealers had migrated to or have newly registered on the app, covering all 30 provinces and municipalities nationwide, excluding Tibet, Hong Kong, Macao and Taiwan.
在优质车源基础上，我们着力打造平台粘性，聚焦产品，服务产品化，进一步完善供应链服务和数字化能力。平台车商活跃率及成交转化率在第二季度显著提升。二季度平台用户日活跃度环比增长近50%，车商活跃度占比环比上涨近70%。
On top of high quality car sources, we focus on building user stickiness by standardizing services as well as further strengthening our supply chain servicing and digital capabilities. As a result, car dealer activity and conversion rates on the platform both improved significantly in the second quarter. Users daily activity rates rose by nearly 50% quarter-over-quarter in the second quarter, and dealer activity rate increased by nearly 70% from the previous quarter.
2022年上半年，平台累计发布车源和寻车条数破万条。在转化率方面，二季度平台的季度平均撮合转化率达到2%，且该数据在季度内呈卓越上升趋势，六月已升至4.6%。横向参考行业平均水平2.5%左右。因此可见，我们目前的转化率已显著高于行业平均水平。
In the first half of 2022, more than 10,000 car sources and car search entries were listed on our platform. In the second quarter, the average conversion rate from our matching service reached 2% and rose month by month in the quarter to 4.6% in June, compared with the industry average of around 2.5%. Our current conversion rate is significantly higher than the industry average.
此外，近年来，随着中国汽车市场的进一步发展，新车保有量不断增加，消费者换车需求逐渐彰显出来，二手车市场规模不断扩大，特别是在灿谷深耕的下沉市场。二手车市场上处于起步阶段，与欧美成熟市场还有较大差距，拥有着巨大的市场潜力。同时，二手车交易对于拉动新车销售，促进经销商转型升级，拓展业务范围都有着重要作用。加上近期二手车利好政策的推出，不仅二手车迎来发展新机遇，更有利于促进新车和二手车市场的全面健康发展。其中取消二手车限迁将丰富二手车市场的车源，加速二手车置换新车的过程，对整体汽车流通体系的促进作用巨大，二手车有望形成全国统一市场。
Since beginning of the year, while under great pressure, we also saw positive development in the industry.
With the development of China's automotive market in recent years, new car ownership has increased significantly and consistently, gradually creating the deep need for car replacement, which has led to the continuous expansion of the used car market. However, China's used car market is still in the beginning stage, particularly in those lower tier markets where Cango has a deep presence. Given its wide gap with the mature markets in Europe and America, China's used car market has tremendous growth potential.
At the same time, used cars play an important role in boosting new car sales, encouraging dealers digital transformation upgrade and expanding their business scope. Furthermore, the recent release of favorable policies will create opportunities for used cars and promote a comprehensive and healthy development of both the new and used car markets. Notably, the removal of used car cross-city transfer restrictions will increase used car supply, accelerate used car replacement and advance the development of a car trading system. In time, we expect a unified national market for used cars.
今年四月底，在新车交易的基础上，我们加大了在二手车B2B撮合交易领域的探索，并取得了令人欣喜的进展。灿谷的平台化二手车业务定位于让二手车交易更智能、更稳定。相比传统微信群，找车信息被埋没、自主沟通效率低下的现状，我们有专人线上跟进、线下对接，打破消息壁垒，进行全国异地报价，精准连接供需两端，提升线索获取与车辆交付效率。截至二季度末，平台注册二手车商数量已超过一千五百家，同时活跃度持续提升。接下来我们将继续向上下游探索，让更多二手车商加入我们的平台，打造一张全国性交付网络，形成统一标准化服务。
In view of the above mentioned market developments at the end of April this year, building on our successes in new car transaction facilitation, we expanded our used car matching services. Good progress has been made so far. We position Cango's used car business as a smart and reliable service provider. Current facilitation methods for used car transactions such as communication via WeChat groups are riddled with problems. Car searching messages can be easily buried in the swaths of information, and spontaneous communication is not always efficient. In contrast, Cango has a dedicated team to follow up on transactions both online and offline, effectively breaking down the information barrier. We also provide price quotes across different regions to accurately match supply against demand, enhancing the efficiency of sales leads acquisition and vehicle delivery.
As of June 30, 2022, over 1,500 used car dealers have registered on our platform with increasing engagement. We will continue to explore further upward and downward along the industrial supply chain to attract more dealers to our platform, create a national delivery network and develop standardized services.
展望未来，我们将继续聚焦车交易，新车、二手车并行发展，不断提升整体平台服务能力和经销商粘性。具体而言，我们将聚焦服务产品化、标准化、创新化，即在优质的标准服务产品基础上，借助科技手段、大数据分析，不断开发新产品，为经销商提供定制化服务，从而提高粘性。良性增长的平台注册车商数以及车商活跃度的提高，将会有力带动成交转化率的上升。随着我们线上服务能力以及供应链服务体系的不断完善，线上线下一体协同高效运营，整体物流运营能力也会进一步提升，最终达至自运转自循环。
Going forward, we will continue to focus on both new and used car trading as we improve our platform service capabilities and dealer stickiness. Specifically, we will center on standardization of our supply chain services, leveraging technology and big data analytics to provide innovative and customized services to dealers on the platform so as to improve their stickiness. Healthy growth in the number of registered dealers on the platform and increasing activity will drive up the conversion rate. With the continuous enhancement of our online services capabilities and supply chain service system, as well as increasing synergies from our efficient integrated online offline operations, our overall logistics capabilities will improve as well, eventually realizing a continuous and self-propelling transaction cycle.
另一方面，基于我们对总体宏观经济走势的判断，传统业务也在继续稳步转型。通过优化业务模式，积极探索与车交易业务的耦合，向以交易为抓手、金融保险服务变现的复合形态转型，打造平台供应链服务能力。在汽车后市场领域，以灿谷好车平台为依托，我们着重提供围绕车交易的战略配套服务。通过高效整合产品和运营服务能力，我们搭建平台内的保险专业化服务，便捷的保险服务入口预计在三季度于灿谷好车APP内正式上线。高效优质的保险配套服务将进一步释放我们汽车交易业务的潜力。今后我们将推进开发定制化的To B产品服务，致力于为平台经销商提供更好的服务体验。与此同时，继续探索与新能源品牌深度合作，搭建后市场生态服务网络。
Moving on to our traditional business lines. Based on our reading of the overall macroeconomic trends, we continue to transition our traditional business lines, optimizing the business model and exploring synergies with our car trading business to develop platform supply chain capabilities. Eventually, Cango will transform to an integrated platform model with and monetizing through multiple channels, including financing insurance services. In the aftermarket services sector, rely on our Cango will focus on offering supporting services for car transactions. The insurance service interface is expected to be launched in the Cango 好车 app in the third quarter. Offering an efficient way for dealers to obtain high quality insurance services will further unlock the potential of our car trading platform. Apart from that, we will also develop customized products and services for corporate clients and continue our in-depth collaborations with NEV brands to build an aftermarket service ecosystem.
车金融业务领域，第二季度，M一加和M三加逾期率环比进一步有所上升，主要由于我们主动收缩助贷规模，导致新增贷款、金融贷款规模不断下降。基于计算过程中分母的缩小，整个逾期率指标出现上升。预计随着总的贷款余额的进一步下降，该数据还有继续上升的可能。但就新增逾期贷款金额本身，基于我们的观察，已经达到峰值状态。随着进一步加强催收等贷后动作，我们有信心把整体的逾期规模控制在一个比较安全的范围。
With respect to our automotive financing facilitation business, M1+ and M3+ overdue ratios increased quarter-over-quarter as we proactively scale back our financing facilitation business, leading to a decline in our outstanding loan balance. As the denominators become smaller, the overdue ratios rise. Though we expect the overdue ratios to climb further for some time to come, it is important to know that the new delinquencies have already reached an inflection point. With further strengthening of loan servicing, such as collection, we are confident we can keep the overall overdue scale in a relatively safe range. We have strong expertise in financing facilitation and risk control, giving us a first-mover advantage as we pursue our new model.
We have not given up financing facilitation business, but rather by our new strategy of creating a database to transaction platform with multiple monetization avenues, including financing and insurance services, we choose to offer high-quality financial services selectively, which will grow to be a key part of our platform's supply chain capabilities and monetization channels. We've noted that policy stimuli, such as vehicle purchase tax relief aimed at boosting automotive consumption, did not lead immediately to a major rebound in the automotive market. Furthermore, uncertainties stemming from supply chain challenges, chip shortages, COVID resurgences, and a complex external environment continue to weigh on the market and the automotive industry value chain. Therefore, we remain prudent and cautious, and will continue to strengthen risk controls across the board. Despite these uncertainties, we remain positive about China's NEV and used car markets.
China has become the world's largest NEV market, with NEV penetration rate exceeding 20% in the first half of 2022. Having undergone significant growth in production and sales, NEVs are undoubtedly a new growth driver for the high-quality development of China's automotive industry. For Cango, NEVs have always been a key component of our business development. We are well-positioned to capitalize on the market's vast potential. On Cango Haoche, the NEV penetration rate is already above 50%, far above the national average. As for used cars, favorable policies are already being implemented. Since August 1, 2022, with the removal of restrictions on used car cross-city transfer, other than Beijing, used cars can be traded nationwide.
As NEVs and used cars enter a new development stage of fast and large-scale growth and benefit from policy initiatives designed to stimulate market activities, we will make ongoing investments in these two areas to elevate our platform's capabilities and realize our goal of building a tech-enabled car trading platform where we place equal emphasis on new and used car trading and monetizing our financing insurance services through multiple channels. Next, I will turn the call over to our Chief Financial Officer, Michael Zhang, for a review of the company's financial performance.
Thanks, Jiayuan. Hello, everyone, and welcome to our Second quarter 2022 Earnings Call. Before I started to review our financials, please note that unless otherwise stated, all numbers are in RMB terms and all percentage comparisons are on a year-over-year basis. During the quarter, macro headwinds and a wave of COVID resurgence across China posed ongoing challenges to the domestic auto industry. Months of pandemic-related disruptions significantly impeded our business, resulting in total revenue of CNY 289.2 million in the second quarter. Our car trading transaction division, which delivered revenues of CNY 218.6 million, still played an essential role in our transformation to a platform model. Now let's move on to our cost and expenses during the quarter.
Total operating costs and expenses in the second quarter of 2022 were CNY 643.3 million, compared with CNY 933.5 million in the same period, 2021. Cost of revenue in the second quarter of 2022 decreased to CNY 272.7 million from CNY 697.8 million in the same period, 2021. As a percentage of total revenues, cost of revenue in the second quarter of 2022 was 94.3% compared with 73.7% in the same period, 2021. The change was primarily due to an increase in car trading transactions share of total revenues. Car trading transactions normally present a higher cost revenue ratio, thus pushing up the overall ratio.
Sales and marketing expenses in the second quarter of 2022 were CNY 41.8 million, compared with CNY 60.9 million in the same period of 2021. As a percentage of total revenues, sales and marketing expenses in second quarter 2022 was 14.5% compared with 6.4% in the same period, 2021. General and administrative expenses in second quarter of 2022 were CNY 124.7 million, compared with CNY 64.7 million in the same period, 2021. As a percentage of total revenues, general and administrative expenses in the second quarter of 2022 was 43.1% compared with 6.8% in the same period, 2021.
This change was mainly due to the expenses arising from 12.0 million Class A ordinary shares options granted to the company's chairman, Mr. Xiaojun Zhang, and the CEO, Mr. Jiayuan Lin, in the second quarter. These share options are granted in consideration of Mr. Zhang and Mr. Lin's role in guiding Cango's profitable investment in Li Auto, a provider of new energy passenger vehicles in China. Research and development expenses in the second quarter of 2022 were CNY 12.9 million, compared with CNY 15.6 million in the same period, 2021. As a percentage of total revenue, research and development expenses in the second quarter of 2022 was 4.4%, compared with 1.7% in the same period, 2021.
Net loss on risk assurance liabilities in the second quarter of 2022 was CNY 53.1 million, compared with CNY 35.9 million in the same period of 2021. Net loss on risk assurance liability was mainly due to a sequential increase in the default rate since 2021. We recorded loss from operations of CNY 354.1 million in the second quarter of 2022, compared with an income of CNY 13.2 million in the same period, 2021. Net loss in the second quarter of 2022 was CNY 285.8 million. Non-GAAP Adjusted Net Loss in the second quarter of 2022 was CNY 189.6 million.
On a per share basis, diluted net loss per ADS in the second quarter of 2022 was CNY 2.08, and diluted non-GAAP Adjusted Net Loss per ADS in the same period was CNY 1.38. Moving on to our balance sheet. As of June 30, 2022, we had cash and cash equivalents of CNY 1.3 billion, compared with CNY 2.1 billion as of March 31, 2022. As of June 30, 2022, the company had short-term investment of CNY 2.1 billion, compared with CNY 1.9 billion as of March 31, 2022. Looking ahead to the third quarter of 2022, we are now predicting our total revenues to be between CNY 350 million and CNY 400 million.
Please note that these forecasts reflect our current and preliminary view on market and operational conditions, which are subject to change. This concludes our prepared remarks. Operator, we are now ready to take questions.
Thank you, sir. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then two. Again, it is star then one to ask a question. At this time, we'll just pause momentarily to assemble our roster. The first question we have will come from Shelley Wang of Morgan Stanley.
第三个的话，也想问一下车交易，就是我们预期未来可能大概会达到怎么样的规模？这三个问题。谢谢。
Good morning, I'm Shelley from Morgan Stanley. I have three questions. The first question is could you give us more information on the independent app that you mentioned earlier? For example, the position of the app and target customer base as well as what kind of services will offer on this app? Second question is about car trading transaction business. Could you tell us more about the take rate? Has there been any improvement in the take rate? The third question is also about car trading transaction business. What size do you expect the car trading transaction business to reach?
好，谢谢Shelley。我来回答你的三个问题。关于第一个问题，灿谷好车APP。灿谷好车APP是公司打造购车服务平台的基石，它是将原本微信小程序的全面升级。好车的APP是一个面向全国经销商的B2B一站式交易服务平台，为汽车产业链上下游提供安全、可靠、稳定的车源供应。除了车源供应以外，我们还提供了金融保险服务等非车源供应链、销售管理和销售流程优化以及完善的管理工具，全方位赋能经销商，使与灿谷合作的经销商获得更大的竞争优势。灿谷好车APP上线两周，迁移及新增注册车商千余家，覆盖全国除西藏、港、澳、台以外的三十个省和市。
Thank you, Shelley. I will take your three questions. Well, first question first. The 灿谷好车 app is the foundation of the company's efforts to build a car transaction service platform and represents a comprehensive upgrade of our original WeChat Mini Program. The app is a one-stop B2B transaction service platform for dealers across the country, providing a safe, secure, sustained and consistent supply chain services with car sourcing, financial insurance services and other non-car sourcing, supply chain sales management and sales process optimization tools.
In addition, they offers a complete set of management tools for the upstream and downstream of the automotive industry chain, and comprehensively empowering dealers and enabling those who partner with Cango to enhance their competitive advantages. Since the launch of the app just two weeks ago, more like 1,000 car dealers, I mean registered car dealers have migrated to or have been registered on the app, covering 30 provinces and cities nationwide, excluding Tibet, Hong Kong, Macau and Taiwan.
经过前期的稳扎稳打，目前我们好车平台车商活跃率及成交转化率都在稳步提高。在撮合转化率上，六月份达到了4.5%，已显著高于行业平均水平的2.5%。
As a result of our consistent efforts, we have seen continuous improvement in car dealer activity and conversion rates on the platform. Conversion rates from our matching services have reached 4.5% in June, well above the industry average of 2.5%.
接下来在这个APP上，除了我们提供在优质车源的基础上，我们将继续打造平台粘性，聚焦把服务产品化，进一步完善供应链服务和数字化能力。
Going forward, in addition to ensuring high quality car supply, we will further increase user engagement and stickiness, focus on standardizing our services and strengthen our supply chain service and digital capabilities.
关于第二个问题，就是车交易的take rate。目前我们车交易业务毛利水平差不多维持在1%，因为我们的业务模式是以统一向主机厂集采，然后销售给中小经销商的方式进行，并不控制生产环节，所以毛利水平较低，同行业毛利水平基本也是1%左右。因此我们认为这个毛利水平将持续一段时间。
As for your second question on take rate. Well, so far our car trading transaction business has maintained a gross margin of about 1%. As our business model features centralized procurement of vehicles from OEMs before selling to small and medium sized dealers without any control over the production process, our gross margin is relatively low. Our industry peers have also you know around 1%, so we believe this level of gross margin will continue for some time.
同时，前期为了吸引更多的车商入驻我们的平台，我们会给小B车商足够的利润空间，以保证其在平台上的活跃以及我们的粘性。随着规模效应扩张，我们向上游主机厂和下游车商的议价能力都会提高，届时相应毛利也会增加。
At the same time to encourage more dealers to join our platform, we offer sufficient profitability for the dealers to ensure their activity and stickiness. With economies of scale, our bargaining power with both upstream OEMs and downstream dealers will improve. When that happens, our gross margin will grow accordingly.
车交易业务是我们的驱动力，我们会重点提高在撮合业务的利润，以及自营车辆的金融保险等附加服务业务收入。
The car trading transaction business is our growth driver, but we will also increase our profits in the matching business as well as revenues from ancillary financial services such as insurance services for self-owned cars.
第三个问题关于车交易业务的规模。中国作为全球最大的汽车消费市场，每年新车销量约两千万台。此外还有近十规模的二手车流通市场。以灿谷传统布局的一线城市为例，该市场也是一个每年新车销量超过八百万台的市场，相当于德国、英国、法国和俄罗斯四国新车销量之和。所以我们的目标是尽可能地占据下沉市场的重要份额。
As for your third question, the size, the expected size of our car trading transaction business. Well, China is the world's largest auto consumption market with new car sales totaling 20 million units a year plus a used car market of similar size. Take lower-tier cities Cango's traditional stronghold as an example. In this market segment, new car sales exceeds 8 million units a year, equivalent to the new car sales of Germany, Britain, France and Russia combined. Our goal is to capture a considerable market share in the lower-tier markets.
具体，我们具体的计划是在前期在不大规模扩充团队的前提下，通过小步快跑中打磨业务模式，并逐步完善车源和产品服务，建立并验证出一套可以盈利、可以被复制的商业模式，以及配套的科技平台，之后即可加大力度，快速将这种模式推广到全国范围。所以在五年的业务展望中，前两年的业务规模相对稳健，后期能得到快速提升。我们会根据业务探索情况进一步修正整体的业务规划。
Here's our development plan. Well, in the initial stages, without expanding our team on a large scale, we will hone our business model in small incremental steps while gradually improving car supply and product services, and establishing and validating a profitable and replicable business model and a supporting technology based platform. Thereafter, we can roll out the model rapidly on a national scale. Therefore, looking forward over the next five years, business scale will be relatively steady in the first two years, with fast expansion in later years. We will fine tune and adjust our business plan based on the progress of our business development.
好，谢谢。
Thank you.
Next we have Sophia Zhou of Goldman Sachs.
感谢管理层的介绍。我这儿有三个问题，想请教一下管理层。第一个的话，就是看管理层是不是可以具体地谈一下，就是咱们在二手车业务上的布局，以及现在就是在二手车业务这个市场竞争情况的一个具体情况。第二个问题的话，因为目前业绩层面上也想听一下公司在未来收缩成本方面有哪些具体的措施或者是规划。第三个就是公司提到了就是咱们的新能源汽车这一块的话，其实交料比较不错。那想问一下公司与新能源汽车厂商未来的深化合作的话将体现在哪些方面？谢谢管理层。
Thank you, Sophia Zhou from Goldman Sachs. I have three questions. The first question is could you give us more colors on the company's plan for the used car business? Also could you describe to us the competition dynamics in this market segment? The second question is could you give us more details on your cost control measures? The third one what about your collaboration with NEV OEMs? I mean, how are could you tell us more about, you know, what kind of collaborations do you have?
好，我来回答这个。第一个问题是关于二手车。随着新车保有量不断增加，消费者换车需求逐渐彰显，二手车市场的规模不断扩大，加上近期利好政策频出，二手车市场消费市场将驶入发展快车道。我们看好二手车市场的发展，尤其是新能源二手车领域，我们已经感到在低线市场颇具潜力。
Okay, I will take your first question on used car market. Well, with the increase, with increasing new car ownership, we see more demand for car replacement, and this is becoming more and more evident. This demand actually will lead to the continuous expansion of the used car market. Moreover, the recent release of favorable policies will accelerate the development of the used car market as well. We are optimistic about the future of the used car market, especially in terms of NEVs. We see great potential particularly in the lower tier markets.
面对这样一个巨大的市场潜能和发展前景，二手车领域一直是参与者众多、竞争非常激烈的市场。
However, you know, a huge market potential and, you know, strong development prospects always attract a lot of players into the used car market. The market has always seen a very fierce competition.
今，在今年疫情封控期间，我们开始尝试平台化的二手车撮合业务，取得了不错的进展。我们的二手车业务复合使用新车平台的服务功能，比如像物流服务等，结合二手车的特点，有针对性呈现状进行上下游车商拓展。公司正在搭建灿谷优车二手车交易平台，同时打造一张全国性交付网络，形成统一标准化服务。从目前尝试结果看，二手车可能会比新车交易平台更加活跃。
During the lockdowns, we started to try the used car matching service on our platform. We have seen a good progress so far. Well, used car services, we provide combined functions and features for our users on. Actually we borrow our expertise from our new car service platform, such as logistics service. But of course, all these services are provided in view of the special characteristics of used cars. We are now trying to expand our business in the used car market, both along the upstream and the downstream, and we are expanding our business in a targeted way. Right now we are building a dedicated used car trading platform.
We will, with our efforts, successfully build a national delivery network offering uniform and standardized services. Well, based on the results so far, we believe the used car platform actually will be more active than the new car platform. The second question is on cost control measures. Well, to achieve our goal of building a car trading transaction platform, we have downsized our staff and restructured our organization and reintegrated the company's human resources so as to maximize our focus on the goal of building an automotive trading service platform.
At the same time, we have increased our investment in IT systems so as to automate and standardize our operations and reduce human resource costs as well as operating costs. At the same time, we have also taken steps to plan our funds uses, and we have also repaid some loans so as to reduce our level of borrowing. The third question on our collaboration with NEV OEMs. Well, right now, our collaborations with NEV OEMs cover both new cars and used car markets. So in the new car segment, we cover new car purchases, corporate retail finance collaborations, as well as insurance services for new cars. For used cars, we are exploring the possibility of mass procurement of used cars directly from auto OEMs.
China has become the world's largest NEV market. In the first half of this year, NEV penetration rate exceeded 70%. Given a significant growth in both production and sales volumes, NEVs undoubtedly represent a new growth driver for the high quality development of China's auto industry. For Cango, NEVs have always been an important focus for business development. So far, our NEV OEM brand partners include Buick, Skyworth Auto, Dongfeng Aeolus, Dongfeng Fengon, and Maple, Polestar, Geometry, Roewe, and XPeng, among others. On the Cango auto platform, NEVs have a penetration rate of over 50%, far above the national average. We are currently negotiating strategic partnerships with more NEV brands, which we will disclose in due course. Thank you.
Again, as a reminder, if you'd like to participate in today's Q&A, please press star then one on a touch-tone phone. Again, that is star then one to ask a question. Again, we will just pause momentarily to assemble our roster. Well, it appears that we have. I do apologize, everyone. It looks like I do have an additional question, and it comes from Brian Lantier of Zacks.
Good evening, everyone. Thank you for taking my question. I feel like maybe Sophia got a copy of my notes because she asked pretty much everything I was gonna ask. The one thing I was wondering if maybe you could clear up for me would be the increase in non-current liabilities on balance sheet. Everything else I think, and then I guess if I'm correct in assuming that you have roughly $70 million open still on the stock repurchase agreement. Those are the two things I just wanted to clarify. Thank you.
For these technical questions to our CFO, Michael Zhang.
Thank you, Brian, for your questions. I will take your two questions. First of all, about the increase in the non-current liabilities. It is because we recognize the long-term tax item on our balance sheet under the heading of non-current assets. We said the tax item will be realized in two to three years' time. That's my response to your first question. The second question, as for the balance of about $71 million worth of share repurchase authorization as of June 30. Based on last BOD meeting's authorization, these authorization will actually terminate by August 26.
Actually last August authorization will have terminated by August this year. For authorization starting from this August, the size of the repurchase program for the first half of 2022 will be about CNY 60 million.
Great. Thank you.
Well, we have no further questions at this time. I will now hand the conference back over to management for any closing remarks.
Thank you for joining us and this closes this earnings call.
Thank you for your time today. Again, the conference call is now concluded. At this time, you may disconnect your lines. Thank you. Take care and have a great day everyone.