Q4 2023 NIO Inc Earnings Call

Unknown Executive: Sponsored ADR Class A Hello, ladies and gentlemen. Thank you for standing by for NIO Incorporated's fourth quarter and full year 2023. At this time, all participants are in listen-only mode.

Hello, Ladies and gentlemen, thank you for standing by for Neo Incorporated's fourth quarter and full year 2023 earnings conference call.

At this time, all participants are in listen only mode.

Unknown Executive: Today's conference call is being recorded. I will now turn the call over to your host, Mr. Rui Chen, Head of Investor Relations of the company. Go ahead, Rui. Good morning and good evening, everyone.

Today's conference call is being recorded.

I'll now turn the call over to your Hurst, Mr. Louis Chen head of Investor Relations of the company.

Rui Chen: Please go ahead really.

Louis Chen: Okay.

Rui Chen: Good morning, and good evening, everyone welcome to Neil fourth quarter, and full year 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted at the Companys IR website.

Rui Chen: Welcome to NIO's fourth quarter and full year 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website. On today's call, we have Mr. William Li, Founder, Chairman of the Board and CEO, Mr. Stephen Fung, CFO, and Ms. Stanley Qu, Senior VP of Finance. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995

Rui Chen: On today's call we have Mr. William Li founder Chairman of the board and the CEO, Mr. Stephen Stone, CFO and MS. Danny Chu senior VP of finance.

Rui Chen: Before we continue please be kindly reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S private security.

Rui Chen: Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties as such the company's actual results may be materially different from the views expressed today further information regarding risks and uncertainties is included in certain filings.

Rui Chen: Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from those expressed today. Further information regarding risks and uncertainties is included in certain findings of the company with the U.S. Securities and Exchange Commission, the Stock Exchange of Hong Kong Limited, and the Singapore Exchange Securities Trading Limited. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.

Rui Chen: The company with the U S Securities and Exchange Commission and the stock exchange of Hong Kong Limited and of the Singapore Exchange of Securities trading limited.

Rui Chen: <unk> does not assume any obligation to update any forward looking statements, except as required under applicable law. Please.

Rui Chen: Please also note that NIO's earnings press release and this conference call include discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to NIO's press release, which contains a reconsideration of the unaudited non-gap measures to comparable gap measures. With that, I will now turn the call over to our CEO, Mr. William Li. William, please go ahead. Hello everyone.

Rui Chen: Please also note that meals earnings press release and this conference call include discussions of the unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

Rui Chen: Please refer to news press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures with that I will now turn the call over to our CEO Mr. William Li William Please go ahead.

William Li: Hello, everyone. Thank you for joining meal time, they tend to fall 10 to 10 D. C Q4, and our full year earnings call in.

William Li: Thank you for joining NIO's 2023 Q4 and four-year earnings call. In Q4 of 2023, NIO delivered a total of 50,045 premium smart EVs, a 25% year-over-year increase. NIO's cumulative delivery reached 160,038 units, representing our goals of 30.7% from 2022 in January and February of 2024. However, due to the sensitivity of our industry and the Chinese New Year, NIO delivered 18,187 vehicles on March 7.

William Li: In Q4 of 2023.

William Li: Near D, but all told all will face piece out then in the 45 of premium Smart E D.

William Li: Up 25% year over year.

William Li: In 2023.

William Li: Yes, cumulative deliberate reached 160038 units.

William Li: Then it goes above 37% from 'twenty to 'twenty two.

William Li: And generally in the fabric of the 'twenty 'twenty four.

William Li: So till that says an entity or interstate and the Chinese new year.

William Li: Neil D D, but 18187 vehicles.

William Li: <unk> seven.

William Li: NIO will start to deliver the 2024 model, featuring enhanced performance and experience. NIO says it is gradually bouncing back, and the total delivery in Q1 is expected to be between 31,000 to 33,000 units. In terms of NIO's financial performance, with continuous improvements on the bone core, the vehicle cost margin increased to 11.9% in Q4. Now, I would like to share with you the recent highlights of our product and the Endowed Patients on December 23rd. New Year's Day 2023 was held in Xi'an, Shanxi Province.

William Li: Neal we have said that will start to deliver for the 20th clinical model.

William Li: Tito and enhance the performance and that experience.

Speaker Change: What is that.

Speaker Change: <unk> says we are gradually bump back.

Speaker Change: And I told her delivery in Q1 is expected to be between 31, so the 30th.

Speaker Change: Where do you see yourselves into unit.

Speaker Change: In terms of our near term financial performance.

Speaker Change: These continued improvements on the Bom cost.

Speaker Change: The vehicle gross margin increased to 11, 9% in cool.

Speaker Change: Now I would like to share with you the basin highlights all of our product.

Speaker Change: And the adult patients.

Speaker Change: On December 10th his thought.

Speaker Change: And you know they tend they tend to three it was heavy and she understands keep hoping.

William Li: Wireless Smart Electric Executive Flagship NIO ET9 was unveiled. ET9 embodies NIO's full stack capability and the global leading technology. Bittering Core Technology, such as in-house development AD chip, NX9031, All-Domain 900-Volt Architecture SkyWrite Chassis System, and the flagship safety and security.

Speaker Change: What a smart electric elect is that because that keeps that cheap near Eaton name was unveiled.

Speaker Change: E T lab embodies nears, the full stack of capabilities and the global lead in technology.

Speaker Change: Peter in core technologies.

Speaker Change: The in house, that's an 80 cheap and that's 1930 watt.

Speaker Change: All domain nine country had about a texture sky ranch chassis assistant.

Speaker Change: The flagship safety and the security.

William Li: 89 defines the technology standard for the next generation premium smart EV. The delivery will start in Q1 2025. In the meantime, NIO will soon start to deliver its 2024 model with configuration and performance upgrades, including the brand new center computing cluster, ADEN, which brings computing power to a new level. Enabled by the industry's highest computing power.

Speaker Change: And then if items that acknowledges standard with a next generation premium smart EV.

Speaker Change: Delivery will start in Q1, 'twenty and send it back.

Speaker Change: In the meantime.

Speaker Change: Neil will soon start to deliver is 'twenty 'twenty four model, whereas the complication and the performance upgrades.

Speaker Change: Including the brand and Youll Center computing class, though Adam.

Speaker Change: Which brings that computing power to a new level.

Speaker Change: Enabled by the industry highest the computing power.

William Li: NIO software release has become faster, making our products more competitive. With respect to NIO Assisted and Intelligent Driving, or NAD, NIO's collective intelligence capability has seen rapid growth, with the total value dated urban mileage increasing 100 fold in five months. As of the end of January, Navigate on Pilot Plus was validated and made available on more than 1 million kilometers of roads in China, including 650,000 kilometers of complicated urban driving scenarios in 606 cities. In Q2, the NOP class for urban roads is expected to be released to all NT2 users, which will make this OTA update the largest public release of its kind in China. Through computing sharing across different domains on the central computing cluster, Nomi-GPT, a multi-modal large vision model, will be released soon, making the cockpit smarter and more secure.

Speaker Change: Neil stopped to wide release has become faster, making our products more pets.

Speaker Change: Is it means back to Neal assisted in the intelligent driving.

Speaker Change: E D Nielsen collective intelligence capabilities. It has seen that's cool.

Speaker Change: What is that total about a value.

Speaker Change: They did opened mileage encased in 100 fold in five a month.

Speaker Change: As over the end of January navigator, and pilot Pos well that they did and then make available more than 1 million kilometers of roads in China.

Speaker Change: Including 650000 kilometers of a complicated urban driving scenarios, even 600 in the city.

Speaker Change: In Q2 now.

Speaker Change: Unlucky plasma for urban growth is expected to be released to or to use us.

Wait you will make lease otas update the largest of poverty relief hopefully as a country in China.

Speaker Change: Little computing Chevron of course deepens domain on the central compute cluster.

Speaker Change: No me cheap T. A mouse model of lots of Asian model will it be released assume make a cockpit smarter and more secure.

William Li: In addition, NIO's mass market brand will make its debut in Q2. The first product will be launched in Q3, with mass delivery to start in Q4. As for the sales and the service network, so far, NIO has 148 NIO houses and 352 new spaces, as well as 314 service centers and 62 delivery centers.

Speaker Change: In addition, near its a mass market brand, but will make its debut in Q2.

Speaker Change: First our product will be launched in Q3.

Speaker Change: It's a mess deliberate to starting Q4.

Speaker Change: As for the stats and the folks in that work so far.

Speaker Change: <unk> has a 100 and the 48 new houses.

Speaker Change: And the 300 and the 52, New York basically.

Speaker Change: As the 300 and the fortune that'd be the centre and 62 sinter.

William Li: About the Charging and Swapping Network, Page 6 of 6 NIO has 204,000, 2419 Postal Workstations Worldwide providing over 39.5 million swaps. It also has installed over 10,000 power chargers and 11,600 destination chargers. During the Chinese New Year, on Billis Day, NIO completes 19,199 swaps. One of the stations on the highway provides the 195th store. Battery swap has become the most reliable solution for NIO Youth. Following the battery swap cooperation with Chang'an and the GD, another two strategic cooperation agreements were signed with the JSC and the CHERI in January. NIO will roll out comprehensive and in-depth cooperation on battery swap with these partners. Moreover, NIO has partnered with multiple energy companies, such as Anhui Energy Group and the China Southern Power Grid, to jointly build swap stations.

Speaker Change: About the charges in the swaps and network to date.

Speaker Change: You had 204.

Speaker Change: 2400, and then 19 postal web stations worldwide.

Speaker Change: Oh boy such a 95 are made in swaps.

Speaker Change: To molecularly.

Speaker Change: It also has installed over 10000, Nepal charges and 11600, that's the nature of the charge offs.

Given the Chinese new year.

Speaker Change: And it appears he BD.

Speaker Change: Today, nearly complete 19100, and then 19 nice to work well.

Speaker Change: One of them for their stations and highway provides to 100 and the 19 five or so.

Speaker Change: That's just the world has become the most reliable solution.

Speaker Change: Port Neal yourselves.

Speaker Change: What do you mean, the battery swap completion with a tongue on in the J D.

Speaker Change: Two strategic cooperation agreement was signed with the TSA and the Cherry in general.

Speaker Change: And yoga wear rollout comprehensive and in depth completion on battery swap at least put enough.

Speaker Change: Moreover, near has a partnership with a multiple and as a company.

Speaker Change: Such as unclean in each group and the China saw some pulp weight to jointly build swap stations.

William Li: The value of battery swapping has been appreciated by more people, making a holistic, chargeable, swappable, and upgradable solution, a well-recognized core advantage of NIO. In 2024, NIO plans to build 1,000 new battery swap stations and 20,000 charging stations, bringing the total to over 3,310 swap stations and 41,000 charges by the end of 2024. Regarding the capital market, in December, NIO received $2.2 billion U.S. dollar strategic investment from Abu Dhabi investor Saevan Hody.

Speaker Change: The value of the battery swap has it been appreciated by more people, making a holistic chargeable swappable upgradable solution, a well recognized a core advantage of Neil.

Speaker Change: In time, they tend to fall near plant to be up to 1000, new battery swap stations and the 20th flowed into charge offs.

Speaker Change: Well Union that total to over 3300, and the 10 Substations and the 41000 to charge offs and end up in kind of 'twenty four.

Speaker Change: Rick I didn't catch the market in December.

Speaker Change: <unk> received two kind of $2 billion strategic investment from the investor side of Unquoted.

William Li: The investment has a further, chance chance, on NIO's balance sheet. Laying a solid foundation for NIO's investment into the next generation core technologies and products showed up in the call that appeared in the Corporate Social Responsibility and Supporting Global Sustainable Development. NIO always stays true to its foundation vision of the Blue Sky Community. In general, NIO was selected by corporate Knights into the 2024 Global 100 most sustainable companies. Making the list for the second time in a row.

Speaker Change: The investment as opposed to the <unk>.

Speaker Change: <unk> strengths nears the balance sheet.

Speaker Change: A solid foundation for our newest investment into their next generation core technologies and our products.

Speaker Change: Children in the car that children.

Speaker Change: Our corporate social responsibility and their supporting global sits in the Port Neal.

Speaker Change: Neal always to stage two so we use a foundation invasion of Blue Sky Company.

Speaker Change: In general.

Speaker Change: Neil was selected by corporate Knights into their country, China for global 100, most us it isn't about companies.

Speaker Change: Makes them till at least for that sat in the Pentagon row.

Stephen Fung: NIO was placed 15th, among more than 6,000 companies worldwide, of 29 sports last year. As competition intensifies in 2024, we see both challenges and opportunities, with faster deployment of charging and swapping facilities, and the change in consumer behavior. The premium BEV segment to which NIO brands belong will soon arrive at an inflection point of growth. In the second half, a new brand for the mass market will also become a gold level. In 2024, we will continue to focus on our corporate priority. Lab Ops System Capability, Jonathan understands the mindset and the cost of management so as to bring our A game to the next phase of competition. As always, Thank you for your support. With that, I will now turn the call over to Stephen Kilford's financial details. All right, Stephen.

Speaker Change: Neil with placed safety.

Speaker Change: Among more than 6000 companies worldwide.

Speaker Change: Turnkey amongst both from last year.

Speaker Change: As competition intensified in plenty of time before you see.

He both challenges and opportunities.

Speaker Change: With a faster deployment of a charge in the swap them facilities.

Speaker Change: And the change in consumer behavior that pie the premium bofa settlements to wage Neil brands belong. We'll soon arrived at an inflection point of a cold.

Speaker Change: And that's that's not a new brand for the mass market. It will also become a cost level.

Speaker Change: In 'twenty 'twenty four we will continue to focus on the corporate priority.

Speaker Change: System capabilities.

Speaker Change: Johnson caused the mindset and of course the management.

Speaker Change: So as to bring our eight game to the next phase.

Speaker Change: If the competition.

Speaker Change: As always.

Speaker Change: Thank you for support is that I will now turn the call over to Steven to afford financial detail over to you Steven.

Stephen Fung: Thank you, William. I will now go over our key financial results for the first quarter of 2020, and be mindful of the lens of the screen, are the reference to RMB only in my discussion, and listeners are encouraged to refer to our earlier press release, which is posted online for additional details. Let me start with Rui, for the fourth quarter of 2023. Total revenues reach. 17.1 billion RMB, up 6.5% year-over-year and down 10.3% quarter-of-year. 90% of revenue comes from vehicle sales in Cuba, which was 15.4 billion RMB, representing an increase of 4.6% over a year and a decrease of 11.3% quarter-per-quarter.

You really.

Steven: And I'll go over all the key financial results for the fourth.

Steven: Caught often two or three.

Steven: And be mindful of the length of the school has a reference RMB only in my discussion today I encourage listeners to refer to our earnings press release, which is posted online for additional details.

Let me stop wasting revenue.

Steven: For the fourth quarter up into Q3 total revenues reached.

Steven: Haven't improved warm getting hobby.

Steven: He spent five year over year.

Steven: Tom can put 3% CT of culture.

Steven: 19, 90% of our revenue come from vehicles sales in Q4.

Steven: Each plus 15 4 billion RMB, representing an increase of four 6% year over year and a decrease of two different books, 3% quarter over quarter.

Stephen Fung: The improvement year-over-year was driven by growing delivery volume, despite the impact of lower average selling price resulted from product mix changes. That decreased quarter of quarter was mainly attributed to a decrease of 9.3% in deliverables due to moving to other fields. Other sales reached 1.7 billion RMB, growing 27.6% over a year and 0.4% quarter to quarter. The year-over-year increase was mainly due to increased sales in accessories and the provision of power solutions, which both go with our user. Now, let's have a look at the gross margin. Overall gross margin was 7.5%, compared with 3.9% in the same period of last year and 8.0% in the previous year.

Permian Yea over year.

It's driven by growing in delivery volume, despite the impact of lower average selling price.

Steven: Socket from product mix changes.

Steven: Decreased quarter over quarter was mainly attributed to a decrease of nine 3% in the LIFO poorly.

Speaker Change: Moving to other fields.

Speaker Change: <unk> reached one 7 billion wont be growing 26% year over year and down 4% quarter over quarter.

Speaker Change: Year over year increase was mainly due to increased sales in accessories.

Speaker Change: Accessories, and the provision of pass throughs.

Speaker Change: Rich false group with all of our user base.

Speaker Change: Then you have a look at the gross margin.

Speaker Change: Although gross margin was 10, 5% compared with three nine in the same period.

Speaker Change: Oh gosh, yeah and.

Speaker Change: It was 1% in the last quarter.

Speaker Change: Crazy year over year was mainly attributed to the increased vehicle margin.

Speaker Change: The slight decrease quarter over quarter due to the decrease in margin from provision of power solutions as a result.

Speaker Change: Out of expand power network.

Speaker Change: Even though veeco girl vehicle market, but growing.

Stephen Fung: The increase year-over-year was mainly attributed to the increased vehicle market. The slight decrease, quarter of a quarter, was due to the decrease in margin from the provision of power solutions as a result of expanding power net. University of, vehicle vehicle marching was vehicle.

Speaker Change: A closer look at a vehicle market, which.

Speaker Change: It was up to 11, 9% in this quarter.

Speaker Change: With six 8% in Q4 contributed to an 11, 1% in Q3 two three.

Speaker Change: Yeah.

Speaker Change: Great was many due to the decreased material cost per unit in Q4 industry.

Speaker Change: Lower base in Q4 continued to which resulted from inventory provisions accelerated depreciation on production facilities and the losses are portrayed creamy demands for the previous generation of E. S. H E ethics six recorded.

Stephen Fung: A Closer Look at Vehicle Mods, which were up to 11.9% in this course, compared with 6.8% in Q4 2002 and 11.0% in Q3 2002. The year-over-year increase was mainly due to the decreased material cost per unit in Q4-2023 and a lower base in Q4-2023, which resulted from inventory provisions, accelerated depreciation on production facilities, and losses on purchase commitments for the previous generation of ES8, ES6, and EC6. Now, let me move on to the operating. Our expenses were 4.0 billion RMB, and they remained stable year over year and increased. 30.7% in the quarter. The increase was mainly driven by incremental design and development costs for new products and technology and higher personal costs in R&D functions. SGM expenses were $4.0 billion, increased 12.6% over a year, and 10.1%, which was mainly related to higher personnel costs in sales functions and increased sales and marketing activities.

Speaker Change: Then let me move on to operating expenses.

R&D expenses were four.

Speaker Change: Oh believe RMP.

Speaker Change: Remained stable year over year and increased slightly.

Speaker Change: 7% quarter on quarter.

Speaker Change: The increase was mainly driven by incremental design and development costs for new products and technologies.

Speaker Change: Higher personnel costs.

Speaker Change: R&D functions.

Speaker Change: S Panic expenses were 4.0 now RMB.

Speaker Change: Creased trough, 0.6% year over year, and 10, 1% quarter to quarter.

Which was mainly related to higher personnel cost is felt functions.

Speaker Change: Increased sales and marketing activities.

Speaker Change: That's a little further to the bottom line.

Speaker Change: Loss from operations was.

Speaker Change: $6 6 billion RMB, representing a decrease of one 6% year over year and what an increase of.

Speaker Change: Statistic, but 80% quarter over quarter.

Interest and investment income was what put food getting hobby.

Speaker Change: Increased 288, 7% year over year at 375% of course culture.

Chris Watson: Chris Watson.

Crime and attributed to recycling.

Chris Watson: Our lives came from other comprehensive income to investment com.

Chris Watson: $977 3 million or RMB food, then a buffer so that related to upstream industry investment.

Chris Watson: Net loss.

Chris Watson: Thoughtful pool being lumpy represent a decrease of seven 2% year over year, an increase of 17, 8% call it quarter.

Chris Watson: Last but not least our balance sheet.

Chris Watson: Yes, It was 57.3 billing hobby in cash and cash equivalents were just cash short term investments and long term path deposits as of December 31st 234.

Stephen Fung: Let's move further to the bottom line. Class for Operations-Wise, 6.6 billion RMB, representing a decrease of 1.6% over a year and an increase of 36.8% quarter for quarter. Interest and investment income was 1.4 billion RMB, increasing 288.7% over a year and 375%. The increase was primarily attributed to the recycling of unrealized gains from other comprehensive income to investment income of 977.3 million RMB for the available for sale debt related to an upstream industry investment. Life insurance was 5.4 billion RMB, representing a decrease of 7.2% over a year and an increase of 17.8% quarter to quarter.

Chris Watson: For more information and details of I'll call. It in between these three full year financial results. Please refer to our earnings press release.

Speaker Change: This concludes our prepared remarks, I will now turn the call over so I'll, probably turn to for our Q&A session.

Speaker Change: Thank you if.

Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change: If you wish to cancel your request please press star two.

Speaker Change: If you're on a speaker phone please pick up the handset to ask your question.

Speaker Change: But the benefit of all participants on today's call. Please limit yourself to two questions and if you have additional questions you can reenter the queue.

Speaker Change: Your first question comes from Tennessee out from Morgan Stanley. Please go ahead.

Speaker Change: I imagine, saying thanks for taking my questions Oh, that's a good question I think first of all just about Oh I'll call me the investment agreements helps answer Neil.

Stephen Fung: Last but not least, our balance sheet gets stressed with 57.3 billion RMB in cash and cash equivalents, Restricted Cash, Short-Term Investment, and Long-Term Time Deposit as of December 31st, 2020.

Speaker Change: <unk> two launch and can lead to pretty smart on the outside they pick away at it separately.

Tennessee: Lastly, in two quarters away could you share more information about our channel strategy tuck in one patient stores towards type change scale also charging ethic et cetera. So any additional color just about absolute b. How do you. Appreciate so that's my first question.

Unknown Executive: For more information details of our Aug. 2023 full-year financial results, please refer to our earlier press release. Now this concludes our prepared remarks. I will now turn the call over to the operator to facilitate our Q&A session. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.

Speaker Change: And go team.

Speaker Change: Ah well then would tend to chip I just jumped on the women's side cure for your thoughtful to go opposite to sue them in a mass market brand that lets say the take a breath.

Unknown Executive: If you're on a speakerphone, please pick up the handset to ask your questions. For the benefit of all participants on today's call, please limit yourself to two questions, and if you have additional questions, you can re-enter the queue. Your first question comes from Tim Hsiao from Morgan Stanley. Please go ahead.

And you do it on a formal way took a tesla Apple should do quite well.

Speaker Change: Okay that sounds helpful. So.

Speaker Change: So it's not a woman to take or do you plan to that tune. Your end of Q4, two each in the VEB, it's hooked to the system surgeries in Shadow AUM declines I mean, it's a fit him either.

Speaker Change: Hum take a take another leg down on the on the tuck in used vehicle onto the jigger a social level.

Tim Hsiao: Hi Manchin, Tim, thanks for taking my questions. I have two questions. The first one is about our upcoming product, the MassMarketGrid Alps. So is NIO still targeting to launch and deliver the first model on the Alps in late Q4? And separately, as it's just left in two quarters away, could you share more information about the channel strategy, target numbers of stores, store types, and scale of the charging network, et cetera? So any additional questions about Alps would be highly appreciated.

Speaker Change: So hold on me on the on the.

Speaker Change: Wait even though your pools in the newest chiyoda Chico's Soho to T C.

Speaker Change: But that one deal my rule of thumb, you and they'll find out what.

Speaker Change: Shang Guang didn't want law.

Speaker Change: Yeah kind of on the hook. He got she said she had heart.

Speaker Change: Ohio conducted shadow homes that I told him that Goldman Sachs Honeywell.

Speaker Change: A the opposite way.

Speaker Change: I'm shocked.

Speaker Change: I mean look when we signed up on Yamana look Neil that's hurt us in the Midland.

Speaker Change: You build enough I'm getting so I know on the so needless exclusive we'll say, it's hungry like sort of on a negate each year to go cloud doesn't shock you pull some missiles feels good.

William Li: So that's my first question. Thank you, team. Sponsored ADR Class A, brand., Sponsored ADR Class A, Thank you for the question. As I've mentioned in my prepared remark, in the second quarter of this year, we're going to unveil our second brand, the brand for the mass market. And in the third quarter, we will launch the very first product of this new brand, and mass release and delivery will start in the fourth quarter of this year. Actually, the verification build, the baby build of this car, already rolled off the line in Q4 last year, and we were pretty satisfied with the conditions of that build.

Neil D: No I'm not sure the Chameleon, Joe says, they're going to shop.

Thank you for the question as I've mentioned in their prepared remarks in the second quarter of this year, we're going to unveil our second brand the brand for the mass market and in the third quarter. We will launch the very first contact off this new brand and the mass release and it's an area, we'll be starting from the fourth quarter of this year actually.

Neil D: Really the verification field that they'd be built off this car already rolled off the line in Q4 last year, and we were pretty satisfied with the conditions I'll start to feel it in terms of the cells and the service network also this new front, where the point of cells. It will have its separated and independent itself not to work, but in terms of the offed herself.

William Li: In terms of the sales and the service network of this new brand, for the point of sale, it will have its separated and independent sales network. But in terms of the after-sales services and the touch points, we can leverage the existing service resources of the new brand. In terms of the power swap network, we've previously mentioned that for the power swap network, we have a private network and a public network similar to the cloud infrastructure and the cloud service.

Neil D: To assist and the touch points, we do kind of leverage the existing service resources often your best in terms of the power swap does not work.

Neil D: We've previously mentioned that just for the power swap network, we have a private network and the public networks similar to the cloud infrastructure and the cloud service for the private it's not to work basically its the power swap stations and the facilities that designated and exclusive to the new brand, but in addition to that we have a public network.

William Li: For the private network, basically, it's the power swap stations and the facilities that are designated and exclusive to the NIO brand. But in addition to that, we have a public network where we will share the power swapping resources with not only our second brand but also other car companies. As you also know, we have already signed agreements with several car companies, and the more we sign, the more we'll join the public service facility as well. Sponsored ADR Class A, Our fourth generation power swap station will have compatibility with both NIO products as well as ALPS products, and we will start to build the fourth generation swap stations in April this year. Previously, we mentioned that in 2024, we are going to install another 1,000 swap stations, and most of the stations will be fourth-generation stations for the public network. Thank you.

Neil D: We will share the power swap people resources with not only our second brand as well as other car companies as you've also show no that we have already signed the agreements with several car companies and the more we are drawing the public service facility as well.

Neil D: So that's done.

Neil D: So that one inside she was a key figure.

Neil D: General and sushi and put them in a number of general meal haunted Atlas the way generally no more than say junior the Sip and Duke has a Bluetooth emerging you know you change those on top with Adobe as the only shop that was a hometown.

Neil D: Yeah.

Neil D: Our fourth generation power swap station will have the compatibility for both new products as well as Alps products and we will start to build the first generation of swap stations from April. This year previously with mentioned that's in 'twenty or 'twenty four we are going to install another one. So then swap stations and the most of the stations will be.

Neil D: First generation stations for the public network.

And her team.

Stephen Fung: Thank you, William, for sharing all the details. So my second question is about the margin target. Because we recall that that was the quarter result, I think the management team mentioned that the vehicle gross profit margin for 2024, i.e., this year, would be around 15 to 18%, and there could be an additional 0.5% margin uptake contributed by in-house production. So, based on the current market environment and compact landscape, do you still maintain the same target this year or look for any potential changes to the margin target? That's my second question. Thank you. Hi Tim.

Speaker Change: Thank you.

Speaker Change: Sure.

Speaker Change: They pick up.

Speaker Change: My second question is now in a bunch of target.

Speaker Change: We called out that you think once you reach out I think the management team mentioned that he called gross profit margin for 2010 before I this year.

Speaker Change: Around 15% to 18% and there could be additional like airports not the sandbox uptake.

Speaker Change: Contravene our in house production, so based on current market environment and competitive landscape do you still maintain the same target this year or the.

Speaker Change: For any potential changes to the margin target. That's my second question. Thank you.

Speaker Change: Uh huh.

Speaker Change: All of the margin, yes for <unk> for the Oh, Yeah, I think it would keep these are 15% to 18% target that's a quarter by quarter I think there will be some change as you.

Stephen Fung: About the margin, yes, for the whole year, I think we will keep this 15% to 18% target. But by quarter, I think there will be some change. As you may know, we will upgrade all our NT2 products to the 2024 version in March. And during the transition of old and new products, more promotions are offered for the old models, leading to a decrease in gross profit margin in Q1. But starting from Q2, along with the volume ramp-up of our 2024 version and also the further cost optimization activities, as you mentioned, we believe our vehicle margin can come back to an upward trend. And so, starting from Q2, we are confident that 15% to 18% vehicle margin can be achieved for the NIO brand. And in the long run, our target, our margin target for the NIO brand will also be over 20%. Thank you. Great. Thank you very much.

Speaker Change: May know, we will upgrade over Oh, our MTT product to 'twenty to 'twenty four version in March and during the transition of our old and new product more promotions are offered for the older models.

Speaker Change: Leading to the decrease of our gross profit margin in Q1 a.

Speaker Change: But starting from Q2, along with the volume ramp up of our 10 day Twentyfold version and also these are further cost optimization activities. As he mentioned are we are we believe our vehicle margin can come back to in that awkward afterwards.

Speaker Change: Trends.

And so starting from Q2 or are we we are confident that a 15% to 18% a week imagine can be achieved for Neil brands.

Speaker Change: And from a lot around our target our margin target for Neil Brian what well also be over 20%.

Speaker Change: Okay.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you. Your next question comes from Dan Wang from Deutsche Bank. Please go ahead.

Bin Wang: Thank you my first question is about that pretty.

Bin Wang: Plentiful voting will talk in some detail at all you're talking 200, it sounds like next quarter for you, Tony Hawk, which means 25% growth.

Bin Wang: Can you confirm what is he says okay. That's number one question I'm, a tusa palace, taking products from the New York market, Brian and Lisa interview, we actually mentioned it.

Unknown Executive: Thank you. Your next question comes from Bin Wang from Deutsche Bank. Please go ahead.

Bin Wang: Suicides Ive seen we became bigger than the first one weapons to compare the total pie MTV consolidations, you're planning for the duplex in the list.

Bin Wang: Thank you. My first question is about the 2024 volume target. Some media report your target of 200,000 units for the full year 2024, which means 25% growth. Can you confirm whether this is your target?

Speaker Change: So can I sort of products. Thank you.

Speaker Change: Oh sure, Joe I'm being and so.

Speaker Change: So I think our chances to Huntington, we Oh Gee that woman.

Speaker Change: Tim you know under its one time in nature, let John woman to trigger unless the Clinton because some G whole woman does finishing them delta that John Tobey its quite a Sunday chosen eating hazard 10 showed a big agenda somewhat junior no I know I'm always sort of inside like Jim found me on to Joel food stay here.

William Li: That's the number one question. Number two is about the second product from the NIO brand, the mass market brand. In a recent interview, we actually mentioned they made a full-size SUV bigger than the first one, will be the second product followed by MTV. Can I confirm this is your plan for the new brand for the next second and third product? Thank you. Thank you, Bin Wang.

Speaker Change: She was a buy in Connecticut in the meat and then go towards a pathway to that she was having a world champion jumped OTA to go them the big Hunks of soda from the moment that Archie do Julia Chung Ching Ming Hi, Shang.

Speaker Change: Tasteful salmonid, yeah, that's what it will take some animal.

Speaker Change: Oh shoot, Ohio, you talked to them and so it's on a Sunday I hope I'll go through them with Yahoo that they had polishing nomi T B T H I G.

She's not a single woman shouldn't that nature tend to meet them are Tom take shootout edge out the lights down the women's shingle took a chilean whereby some of the.

William Li: Of course, the competition in the market is fierce. In terms of products, after the upgrade of the 2024 models, in terms of performance, especially in terms of smart computing, we believe that it is still ahead of the rest of the world. This year, we will focus on software to deliver these functions, that is, to fully utilize the capabilities of the hardware.

Speaker Change: Newer spaces.

Speaker Change: Oh, well, Virginia, how quickly you can get but it's always had shoot out of shots.

Speaker Change: I'm a woman at Hyundai that Shunyata shopping it didn't got yona well Mr. Condo the pick a time, that's all you am I missing some switches.

I'm going to show sort of took a teach out is having on the O. J you can get it to go up so you're going to continue on a killer junior to all of you for.

William Li: As I mentioned earlier, the function of our security support, in the second quarter, we will fully promote it to the users, to the users of our second generation cars. Sponsored ADR Class A. From the perspective of the channels, we have nearly 500 NIO houses and NIO Spaces, and we will continue to add some sub-channels this year. After our team increased in the second half of last year, we actually saw their role because many of them started to mature in their sales skills and their understanding of the product. Sponsored ADR Class A. As for our second brand, let me translate it first.

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Speaker Change: She goes showed on the total tool that you won't need you know that she knows what that woman data to go on a little push which even heightened shouldn't and well see that you'd get my woman dates Union a shout out to go how does it fit how your machines and Oh man down to either shut down one of them. Okay. Let's say you sound like someone saying Hello, Michelle you can sign up for Ya, who to go see those tend to be in line.

Speaker Change: There's still time to take a trigger to get you one will be challenging as.

Speaker Change: Yeah.

Speaker Change: I'm a junior women are well my house, he or she can tell you that number.

Speaker Change: One tied to Johnny you are good to go shapes in Belgium, and she wanted to go to my other thought out.

Speaker Change: So you take a well in the DRP in pilot phase.

Speaker Change: Oh. Thank you for the question, it's definitely for this year. The competition is going to be continue to be.

Speaker Change: But as we've also mentioned that we will be having our project for them.

Speaker Change: For a model.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Well continue to.

Speaker Change:

Speaker Change: Oh.

Speaker Change: Got that.

Speaker Change:

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: On the chip.

Speaker Change: And also.

Speaker Change: We're going to be.

Speaker Change: Pizza.

Speaker Change: Sure.

Speaker Change: Right.

Speaker Change: Doing this publicly.

He has the competitiveness.

Speaker Change: Yes.

We also have other new features.

Speaker Change: Which model.

Yes.

Speaker Change: Yeah.

Speaker Change: In terms of our sales channels.

Speaker Change: So far we have around the 500.

Speaker Change: Yeah.

Speaker Change: And we will continue to do it.

Speaker Change: So.

So the lower tier cities.

William Li: And in the meantime, from last year, we have enlarged our sales force as the team is getting more mature and skillful in sales and getting a better understanding of our products. We also see this sales force start to kick in, especially in our delivery results for February. Inside the BEV segment or the new energy vehicle market, our delivery results in February were actually pretty good, especially in comparison to our results in January.

Speaker Change: And in the meantime from last year, we have enlarged our salesforce as the team is getting more mature and the skillful with the south and catching more are getting better understanding of our products. We also see this itself for us it starts to kick in.

Speaker Change: Actually in our delivery of results for the February are inside of the PV segment, whereas the new energy vehicle market. Our delivery results in February was actually a pretty good especially in comparison to our results. In January. This has also reflected the effectiveness and efficiency of our sales force and also south channel.

William Li: This has also reflected the effectiveness and efficiency of our sales force and also sales channel enlargement. And thirdly, we will also continue to deploy our power swapping network. As I've mentioned, we will deploy both public networks and private networks for NIO and for ALPS.

Speaker Change: Which meant and certainly we will also continue to deploy our power swapping network as I've.

Speaker Change: As mentioned, we will deploy both public network and private networks for New York and for Els and a four hour power swap network. This year, we will mainly serve the purpose a sports team south volume because we already have more than two some that swap stations. So we basically have established that the initial network of Wattup, how restaurant services and now we will see.

William Li: And for our power swap network this year, we will mainly serve the purpose of boosting cell volume because we already have more than 2,000 swap stations. So we basically have established the initial network for the power swap services. And now we will focus more on boosting cells via installing these stations. So, overall, speaking, we are confident with our cells and the delivery results this year. As in our guidance, in the first quarter of this year, we are going to deliver around 31 to 33,000 units. In March, as the weather gets better and the market becomes more dynamic and vibrant, we are also confident that our cell volume will increase. For the midterm, we hope that our cell volume can still be back to around 20,000 units per month.

Speaker Change: That's more pushed himself via installing those stations. So overall speaking we are confident with ourselves and deliver readouts. This year as in our guidance in the first quarter of this year, we are going to deliver around the 31 to 33000 units in March as weather gets better and the market gets more dynamic.

Speaker Change: It kind of by brand. We're also confident that our soft volume will increase.

Speaker Change: For the mid term, we hope that our south Walton cashed, you'll be back to around the 20000 units per month, and we hope that this can happen sooner.

Speaker Change: Uh huh.

Speaker Change: It took a massive market it to the brand because she's a well count you wish him a TSA our attention that you ship out without let's say take a pause.

William Li: And we hope that this can happen sooner. Massive Market,,... Sponsored ADR Class A, Transcript by Rev.com Sponsored ADR Class A: We believe that our cost is about 50% lower than that of Tesla. Sponsored ADR Class A Sponsored ADR Class A, Sponsored ADR Class A, And for your second question about our mass market brand, some media have already captured some of our publicly tested vehicles on the roads and also reported some sneak peeks of our very first product. For our second brand, as we've previously introduced, its overall positioning is to target family-oriented users, basically families of different sizes. Or for families of different sizes, we are going to launch different sizes of vehicles, but always with strong product competitiveness.

Speaker Change: He told US he had saw there you should see another Jody.

Speaker Change: Declines.

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Speaker Change: Two women Wei Didnt, they both Honda science that are jotting, tasteful afraid Honeywell Kinder need is Hershey.

Speaker Change: Oh, Michelle you can take a U M. B, yeah, that's what's out here and so that's really all about Asia, which I can take them to the shoot yoga, if I'm gonna toss you the yen joke nobody's looking down to San Luis Yeah, Let me try gentlemen, Italians the fifth Huntington's Anita.

Speaker Change: I would tell him do Clinton tradeoff on the.

Speaker Change:

Speaker Change: So I shouldn't say that sending them home in take a took a much I shouldnt say that especially in model I chose this once we get them done this at a time.

Speaker Change: Hudson I'm wondering.

Speaker Change: Tom would churn like kind of what I mean.

Speaker Change: And Christian and they'll say something which.

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Speaker Change: Yeah, Michael could I go home holiday Yugo Kun kin.

Speaker Change: They are quite uncertain the bad debts in the U S. You'll be declines hurts you said you haven't thought too there is an there shouldn't be a woman you didn't assume without a tie more to the chatbot to the yes. It would be there was suddenly a minion joking I'm gonna T cells to attack.

Speaker Change: But do you, sometimes a woman can eat inside.

Speaker Change: <unk> talked about of course, I'm doing much in that time.

Speaker Change: So you shouldn't take a.

Speaker Change: They are tied to short not when the Hudson is only for a minute I told them.

Speaker Change: And for your second question about our mass market brand. Some media has already captured some of our publicly passed at the vehicles on the road and also reported some sneak peaks off our very first product.

Speaker Change: For our second brand as a way for previously introduced its overall position needs to targets out to the family oriented users basically families off different sizes or.

Speaker Change: If we're family after you finish sites as we are going to launch different scientists of vehicles, but all with strong product competitiveness as we started the relatively late in the family or we entered the sacraments, we do kind of language such opportunities to actually look into the real demand of the target users and the lunch competitive product accordingly, the first.

William Li: As we started relatively late in the family-oriented segment, we can leverage such opportunities to better look into the real demands of the target users and launch competitive products accordingly. The first product of our mass market brand will have head-on competition with the most popular Model Y of Tesla, but our car will support battery swapping. So in terms of cost and performance, we believe that this model will be highly competitive. In terms of bomb cost, it will be roughly 10% lower than that of Model Y, which also gives us better flexibility for product pricing.

Speaker Change: Thanks to all of our mass market brand will have has had on competition, whereas the most popular model off Tesla that as model y, but our car will support battery swap. So in terms of the cost and performance. We believe that this model will be highly competitive in terms of the bom cost it will be roughly 10% lower than that of model y.

Speaker Change: Which also gave us gives us better flexibility for the product pricing and the second the motto of our mass market brand will be a SUV models for the larger family. The R&D is in good progress we have already kicked off the tooling for the second of motto and this car will be launched in 2025 and the third model is also on the way we are.

William Li: And the second model of our mass market brand will be an SUV model for the large family. The R&D is in good progress. We have already kicked off the tooling for the second model, and this car will be launched in 2025.

Unknown Executive: And the third model is also on the way. We have already started the product definition and R&D, but it's too early to share the information, and we will disclose more information when it's appropriate. Thank you, Longbin. Thank you very much.

Speaker Change: Have already started the product definition and R&D, but it's too early to share that information and we will disclose more information when it's appropriate.

Speaker Change: Thank you Avi.

Avi: Thank you very much.

Yuqian Ding: Thank you. Your next question comes from Yuqian Ding from HSBC. Please go ahead.

Speaker Change: Thank you. Your next question comes from you counting from HSBC. Please go ahead.

Yuqian Ding: Thanks, Tim. Yuqian here. I have two questions.

Speaker Change: And then you can here I got two question. The first is Oh, we want to understand what's management's priority or strategy between pricing and volume we noticed that the company acted quite to refrain in pricing among universal price action from Paris has that been a well we have been.

William Li: The first one is we want to understand what management's priority or strategy between pricing and volume. We noticed that the company acted quite reserved in pricing among universal price action from peers. We have been seeing the ticket price rather stable. So does that read as more profitability as a priority over volume for this year? Or is it a rope-and-dope tactic before our new mass-market brand coming to the market? That's the first one.

Speaker Change: <unk> did take a price rather stable, sometimes that reads as more profitability as a priority over volume for this year or if I lump adult attaching therefore, our new mass market brand and coming to the market. That's the first one.

William Li: Yeah, today you can. In the second half of this year, NIO will sell two brands at the same time. But from a strategic perspective, we won't sell NIO's brand at a lower price than the price of ET5. Sponsored ADR Class A. So in terms of price and quantity, we will keep the same, so we won't change the quantity in the form of a price war. This is not our focus.

Speaker Change: Yeah.

Speaker Change: He said.

Speaker Change: Think of it in New York Junior and shopping and Cai Fu until it comes to social apps.

Speaker Change: Consolidated other lifestyle, neither on the brand and a lot of women, who they choose to be if you find that couldn't change it so no but both of them that way fuzziness fishing, a woman and you don't have the focus that premium to Brent.

Speaker Change: The cost of the Molly.

Wage soundness C O leukemias outreach from audiences.

Speaker Change: So you wouldn't say as time goes on downtime in Ohio, we're going to say it couldn't dot shoot people took him I'll, even say wouldn't believe.

Speaker Change: I've had enough I'm sure that you take a two to one down months ago wasn't simple shall I mean, it won't be home to a direct competitor to that John that I chose this its a niche audiences.

William Li: But from the perspective of the second brand, it is indeed aimed at the family market, so the competition in this market will definitely be more intense. Our second brand will be able to leverage our smart and electric research and investment in some basic facilities. Of course, it will definitely have a greater advantage than what it did in the beginning. Our second brand will prioritize the pursuit of quantity. In the beginning, we were definitely not pursuing quality; we were pursuing quantity.

Speaker Change: Huntington, yet nobody can do that no one in the DRP in Pi mango levy to them, it's as much hoods at our electric and phone minutes at home to you haven't fossil you said, it's useful so sort of total.

Speaker Change: A tie on par a convenient should be attending kinds of books, you'll could come out of used the number on the DRP in Pi way beyond the digital trade show. We are to go way, where you can use the same kind of a woman can implicitly multi do you way to treat children. When when can you see a young two children.

Speaker Change: Oh.

Speaker Change: Yeah on the oceans Yadkin valleys here I must say, it's them some don't I.

Speaker Change: Sure on the Tinder brand now who you'll put from there you go clearly challenging tanga tool that goes to the tungsten Julian lifetime, you'll see the consolidated sorry.

William Li: Sponsored ADR Class A. Thank you for the question. Starting the second half of this year, NIO Group will sell two brands simultaneously. So strategy-wise, we have also differentiated between these two brands. For the NIO brand, for now, we will not sell any products that will be cheaper than the existing ET5. Even for the products in our pipeline, they will be targeting the premium segment, which means that our products for the NIO brand will be more gross margin oriented. So we will be focusing more on the gross profit of our product than the volume. So we will not cut prices, we will enter the price war, we will not realize higher volume at the cost of our compromised margin or gross profit. And for the second brand, the brand for the mass market, it is targeted at the mass market and also for family-oriented users, where the competition is also more intense.

Speaker Change: Thank you for the questions starting in the second half of this year in yogurt, but well sell two brands simultaneously. So strategy wise, we have also differentiate it for those two brands for the new brand for this for now we will not sell any products that it will be cheaper than the existing EQ five even further.

Speaker Change: Products in our pipeline they won't be targeting at the premium segment, which means that our products for the new brand will be more gross margin are we entered it we wont be a carry more on the gross profit of our product then the volume. So we will not cut the prices were entered the price war we were not.

Speaker Change: Realized higher volume at the cost to us our come from ice to margin, where gross profit and for the second of the brand the brand for the mass market. It is targeted at the mass market and also for the family oriented of users where the competition is also a more intense but luckily it can leverage the existing electrification and smart.

William Li: But luckily, it can leverage the existing electrification and smart technologies and infrastructures already developed by NIO, so it has certain advantages over starting a completely new brand from the ground up. For this second brand, we will be focusing more on volume. Volume is prioritized over the growth margin of the product.

Speaker Change: Oh Jeez and infrastructure is already developed right now so it has to start time advantages than starting a completely new brand from the ground up for this is that kind of brand. We will start seeing more we won't be focusing more on the volume. So the volume is prioritized over the gross margin of the products. That's the overall strategy for that.

William Li: That's the overall strategy for these two brands. We believe that with this combined brand portfolio, it will also help us to realize a healthier, long-term, sustainable development and operation.

Speaker Change: Two brands, we believe that with this combined brand portfolio. It will also help us to realize a healthier long term sustainable development and operation. Thank you.

Speaker Change: Yeah.

Speaker Change: Got it and then my second question is on the rest of them two sessions could talked about supporting are so used to move more aggressively on the E V without constraint on the profitability. So it looks like another pressure and making the English sheep harder and harder to consolidate so thanks for the strong color that new mass market brands and value.

William Li: And my second question is, the recent two sessions talked about supporting SOEs to move more aggressively on EVs without constraining profitability. So it looks like another pressure and is making the industry harder and harder to consolidate. So thanks for the strong color on the new mass market brand and value proposition. I guess this is us changing the way of asking, other than a strong product, are we aggressive enough on the pricing? You talked about volume priority, but if the pressure is going to be overhang for longer, are we ready to be aggressive on pricing for longer?

Speaker Change: Yes. This is this is changing the way of asking other than a strong product are we aggressive enough on the pricing you talked about the volume priority, but if the pressure is gonna be overhang for longer Oh, we have to be ready for being aggressive on the pricing for longer.

William Li: Of course, in China, we will face competition from various companies. We will face competition from Tesla. We will face competition from new start-ups. We will also face competition from private companies. We will also face competition from joint venture companies. Of course, there will also be competition from state-owned companies. China is a very open car market.

Speaker Change: It's all women don't go to home in diaper, Myrlene Gudrun and she had a change in one month I mean, John Purcell attitudes and when will I mean, it's it goes a pumpkin. So that's and so you know what I mean Asia mean, she had itunes and Cleveland She had a change in diet, who you'll you should see it.

Speaker Change: And so you could sit on kind of found that she says how good kingdom come into your own core show you how to teach your lifetime family Tonight, and then say well it sounds good it's a good time.

William Li: Competition is definitely good for users. For companies, of course, it will be a little harder. But in the end, I believe that the winners will definitely be companies that are more comprehensive and start from the user experience. We are confident in our long-term competition. Of course, in addition to competition, we think cooperation is also very important. Just like we have with Chang'an.

Speaker Change: Even though can endorse someone couldn't unique in China.

Speaker Change: Who the T N two farther down the Hitachi yet.

Speaker Change: Isn't that a good chunk of it and then can you just the change in the timeline.

Speaker Change: So that didn't renew while I'm in a way. That's all you can throw me off to something well mogens hung on to go them D.

Speaker Change: Oh I'm getting the hook order to go whole bunches of tongue on their buses Oh, My God G. D. Io hurts you a to go where they go it sounds like it's all in the Hood. So much so hard so plenty of time for me and what meal. That's all I'm going to Miss you owe them and couldn't take the non one day, it's like a plenty and science, which will allow me to do.

William Li: Our first partner in the exchange of electricity is Chang'an, right? We have cooperated with Geely, Qiwei, and Jianghuai. We have also cooperated with China's Shihua in the exchange of electricity stations. We have cooperated with China's Shiyou and Nanwang in the exchange of electricity stations and storage capacity. So actually, from NIO's point of view, we are also very good at cooperation.

Speaker Change: Hey, she goes home meal, that's around the horn on women.

Speaker Change: Oh, I'm, sorry, let's sort of homes.

Speaker Change: Oh Boy I tell my wife, Ginger and continuously going up which by the way if I'm in Ohio, EMEA wait till a woman to take a oh, yeah. There you go could ease him the job that John Tony Gastonia Hoodie, you seemed like you cut out into out of Huntsville.

William Li: Sponsored ADR Class A, It's true that doing business in China is inevitable that we will face competition coming from all types of car companies, including companies like Tesla, many startups from China, private companies, well-established ones in China, and also joint ventures and state-owned enterprises. Overall, China's automotive market is a highly open market, and such competition can actually benefit or bring benefits to end users. However, it can be more difficult and challenging for car companies.

Speaker Change: Okay.

Speaker Change: It's true that's doing business in China, and it's inevitable that we will face competition is coming from all types of car companies, including companies like Tesla, many startups from China private companies well established ones in China and also join debentures and the state owned enterprises of all speaking there China's automotive market is a highly.

Speaker Change: Open market and such competition kind of actually benefit we're bringing benefits to the end users. However, it can be more difficult and challenging for car companies, but we believe that by the end of the day those companies with good overall with therapies and our competence as well as those companies.

William Li: But we believe that by the end of the day, those companies with good overall capabilities and competence, as well as those companies who care about the experience of the end users, will survive the fierce competition. And we are confident that we will withstand such competition from all the competitors. But in the meantime, we also see cooperation out of the competition.

Speaker Change: Care about the experience of the end users will survive from the fierce competition and we are confident that we will withstand such competition from all the competitors, but in the meantime, we also see corporations out of the competition. For example, we have announced power swap cooperation with many car companies to China.

William Li: For example, we have announced PowerSwap cooperation with many car companies. China Automobile is the first car company to partner with NIO in PowerSwap. Later, we also collaborated with EV Holding, JEC Group, and CHERRY on the battery swap. We also have partnerships with energy companies like Senopac and PetroChina for the construction of PowerSwap stations, as well as with China Southern Power Grid on energy storage, as well as PowerSwap stations. So, in general, NIO is pretty good at partnering up with peers in the industry. Since competition is inevitable, we would like to look at how we can navigate through the intense competition from the rationality of the business perspective. I got it.

Speaker Change: T mobile is the first a car company to partner with Neil empower swapped later, we also collaborated with Geely holding Jaycee group and the Cherry on the battery swap. We also have partnerships with energy companies like Sinopec and Petro China for the construction of power swap stations as well as we have to try and ourselves empowered right on the Ana.

Speaker Change: Storage as well as power swap stations. So in general Neil is pretty good at partnering up with the peers in the industry. Since the competition is inevitable, we would've liked to look at how we can navigate to stay with the intense competition from the visibility of the business perspective.

Speaker Change: Yeah.

Speaker Change: Got it thank you.

Ming Chung: Thank you. Thank you. Thank you. Your next question comes from Ming-Sun Lee from Bank of America. Please go ahead.

Speaker Change: Okay.

Speaker Change: Thank you. Your next question comes from being sung Lee from Bank of America. Please go ahead.

Speaker Change: Okay.

Sung Lee: Oh, Hi, Thank you William and Nick and team. So I also have two questions. So first question is regarding the overseas market.

William Li: Hi. Thank you, William and the H1N team. I also have two questions. The first is regarding the overseas market. Do you expect NIO to enter new countries this year? Will you cooperate with more local distributors in other overseas markets, or will you maintain the direct sales business model? Also, do you have any overseas sales target for this year? Thank you.

Sung Lee: Do you expect you know to enter the new countries this year well.

Well you cooperate with more local distributors are in.

Sung Lee: In other overseas market or you will maintain.

Speaker Change: So this is a model Oh, so do you have any oversea sales target for this year. Thank you. That's my first question.

Oh sure Jimmy.

Speaker Change: So figure changes, sometimes that gentleman in Dallas, So Tien and yourself trying to dwindle a certain trigger you went she goes so to your daughter, Susan Yes, the kindred and say Gee data.

William Li: That's my first question. Xie Jianming, From a global perspective, we must focus on the Chinese market because it is the largest and the most competitive market, but we will not stop exploring the international market. As a sponsored ADR Class A, NIO is in the premium segment, which accounts for 90% of the global market in China, the U.S., and Europe. The other markets are relatively small.

Speaker Change: That's a woman onboard chooses they took a gorgeous was how good the good times Oh, well meant that although we'll go good shot to.

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Speaker Change: She had to go down one more way way way some junior Oh, I'm glad you caught them Hmm shares that John I wanted to deal with Nashville, It's Angela Sanchez here, who you shouldn't we conducted an equation you'll younger foaming to stick a pin while you go to harness.

Angela Sanchez: You want a mobile a bathroom sometime they shouldn't that compassion that timeshare El Nino. However, you can either take a city O&M and Peter tell me cause Schindler, Brad How're you doing so well.

William Li: In terms of our second and third brands, there will be more opportunities, and the market will be bigger. This is the first change. We will base this on this to create a global market. Sponsored ADR Class A Sponsored ADR Class A, Thank you for the question.

Speaker Change: Well I'm going to take a time shouldn't.

Speaker Change: It's like a Hudson Gonna Susana full Guy Oh, we can thought we couldn't buy <expletive>, there Neil though anyway that premium brand she's a premium that you go sentiment and demand side to go and make well, although that's on the cheap and unchanged digital sure since you're not a silicon something slip. It does show you <expletive>, that's home the tariff impact with the assumption, but I'd say on the <unk>.

William Li: Regarding the global market or international markets, at the moment, we will still primarily focus on the Chinese market as it is the largest and also the most competitive market for the automotive industry. But in the meantime, we will not stop our exploration into the international market. So far, we have already entered five European countries, and we will keep refining our operations and management in these five European countries. And this year, we are also planning to enter several new countries, for example, the UAE, as we are invested in by the Abu Dhabi strategic investors. So we are also preparing for market entry and sales and service in that market. For other countries, we're more waiting to see the development of the conditions.

Speaker Change: We took our opinion weighs yet when you have a certain kidney timeshare cause of Diego being why wouldn't you would take up to a church, it's putting one mega trend showed us how much you want no material, Ed John and I wanted to say a jumbo pogo imagined seem the ozone. If you go quite that much element. So the shoulder function no matter how would you in women.

Speaker Change: Michelle it's a good enough answer doesn't that change also Tom I wanted to Oh, I suppose I don't know how no women can nuclear YOD syndrome. They go because you found that it sounded you Julien that doesn't but indeed, a challenge here to push further down. These hits you want a woman can lean cooking Jacek.

Speaker Change: The total weibo to Charlestown, and Clinton quieted down as your phones.

Speaker Change: Choose jigger Chew gum Typhon legal songs two women shoe company did a joke when the switch which includes all number so you're on them are both high school Gudrun goodness, what sort of time that particular condition. So we can dial in hooking up type of Amish.

Speaker Change: Thank you for the question regarding the global market or international markets at the moment, we're still primarily focused on the Chinese market as it is the largest and also the most competitive market for the automotive industry, but in the meantime, we will not we will not stop our exploration into the international.

So far we have already answered a five European countries, and we will keep refining our operations and the management in this five European countries and this year. We are also planning to enter into several new countries. For example, U a E. As we are investing to buy the Abu Dhabi strategic investors. So we are also preparing for the market entry.

Speaker Change: And the south and to say that are in that market for the other countries, where more waiting and did you see the.

Speaker Change: Development of the conditions and the strategic wise, we will also become a more flexible because there are two major changes there first the changes that we will soon have our mass market brand and then next year, we're going to announce our third brand.

William Li: And strategically, we will also become more flexible because there are two major changes. The first change is that we will soon have our mass market brand. And next year, we are going to announce our third brand. The price will be below 200,000 RMB, which means that with all three brands combined, we will be able to cover larger markets with more segments. Because NIO, as a brand, primarily focuses on the premium segments, basically, China, the US, and Europe; these three continents contribute 90% of the sales of the premium segment.

Speaker Change: This will be below 200000, RMB, which means that with all three brands combined we won't be able to cover larger market, whereas the Morris documents, because new as a brand to primarily focus on the premium segments basically China U S and Europe. This third content, that's country, but 90% of the south of the premium segment, but.

William Li: But for our second and third brands, as they are more affordable, they will have a bigger chance of tapping into a more diversified market and in more regions. So our global market entry will also take these three brands into consideration. And the second change is regarding our strategy for entering each market. At the moment, in China and in five European countries, we adopt the direct selling model. And in China, we will continue to have direct sales with direct touchpoints with users. But for other markets outside of China, we need to respect local conditions and also the special characteristics of each market.

Speaker Change: Our second and third brands as they are more affordable they won't be standing a bigger chance of tapping into more diversified markets and in more regions. So our global market entry will also take this the three brands into consideration and the second that changes regarding our strategy entering into each market at the moment.

In China and in five European countries, we adopted the direct selling model and in China. We will continue to have that direct yourself with direct touch points with users, but for the other markets outside of China, we need to respond to the local conditions and also the special special characteristics of each market in that case, we will keep our strategy.

William Li: In that case, we will keep our strategy very flexible and very open. We will look at which way will bring us a quicker return on investment. We don't exclude any possibilities of cooperating with local partners for market entry. So, in general, we will have a very flexible and very open strategy towards markets outside of China. Thank you, William.

Speaker Change: A very flexible and very open we will look at which way will be bringing us quicker return on investments, we don't exclude any possibilities of cooperating with local partners, where the market entry. So in general we will have a very flexible and very open strategy towards markets outside of China.

Speaker Change: Yeah.

Speaker Change: Thank you William My Citron accretion is route.

William Li: My second question is regarding battery technology. Recently, some auto brands have started to launch 5C 800-volt charging batteries in the system. So when do we expect that the NIO brand and also, probably, your second brand will start to provide this spec? And if after you have a fast-charging battery, will you switch to expanding more charging stations instead of battery substations in 2025? Thank you, William.

Speaker Change: My second question is regarding.

Speaker Change: Basically your technology. So recently, some oh top brands start to lunch.

Speaker Change: 800 volt touching a battery in the system.

Speaker Change: So do we when do we expect that the new brand and also probably you have a second brand we will.

Speaker Change: Start to provide a these are spec.

Speaker Change: And if after you have for the.

Speaker Change: First charging a backseat a we'll use a switch to expand more on the charging station instead of a battery substation, a tiny tiny five think of it.

William Li: Yeah. Yes, from the perspective of battery technology, of course, from supercharging, increasing charging speed, and fast charging, right? This has always been our strategy.

Speaker Change: Yeah.

Speaker Change: So again, so that's useful to go to lifestyle brand.

Speaker Change: They've got some told him he got it from getting the sort of dual I O quite one, thereby so Amiga took a trigger you got started yet so you women, but going from being a woman. She figures. So a bedroom global food near drunk. So it's easy to see that she doesn't pay well then the posture to take a take a turn down those are food yet a pin pad.

Speaker Change: She was a woman.

Speaker Change: Well I mean, the Tuesday, yeah, well keep them how's the breakeven. So you had some delays Philadelphia and Oh My God.

Speaker Change: So she did she was supposed to go put you know what when we look at as supposed to Chunghwa that took a toll paid from Ghana, taking your way.

William Li: So in terms of charging stations, we are actually the most active charging station deployment brand in China. 80% of our batteries are for other brands. In fact, our charging business is basically break-even. So, in general, we will continue to make this layout. Our 640 kW super fast charging station will also be deployed soon. Sponsored ADR Class A Sponsored ADR Class A, Sponsored ADR Class A, If we look at it a little bit longer, because this car is a 15-year-old product,

Speaker Change: I don't see it.

Speaker Change: So if I'm in a household you at Mcdonalds, we couldn't didn't take a take a hung in there to get to choose the Taliban in your polenta Macquarie.

Speaker Change: And then wondering what kind of yoda made too so I think I send it to us to say.

Speaker Change: What time they go so you're gonna Beulah to go convince me that she and it's already funding can you say Hello to you. So you want me to the Jo cool Twinkle widen cushion.

Speaker Change: Yeah, which hung out Cushing E cigarette she didn't even go to your second half done commingled funds out of the total edge on it but what was the Gwen to send him tell me do you tell them the Tiger J C O. Joe would you be able to do that no. One thought they got a quiet hum about shows that they are well say a woman. She is a woman to you Tonight you'll hit.

Speaker Change: I have to go with say two good told them to go against the couldn't rule it out as a well known quick ones will conduct one two turns with a show me.

Speaker Change: The minimum wage issues as a citizen.

Speaker Change: I suppose with Toyota now as well I'm, just kind of hung yeh shouldn't that I shouldn't talk about partnership she's going to sit on boats in Nevada, onion, a city or I'm going to leave I hope to go up and it's usually the time you got to sit down Belgian absolutely true sometime this year.

William Li: Sponsored ADR Class A Sponsored ADR Class A, In the past few years, we have done a lot of research in this area, and we have been communicating with the market recently. So the really important thing is that the life of batteries, especially the life of solar energy, is a problem that the entire smart electric vehicle industry, the electric vehicle industry, including the real industry, including the hybrid industry, has to face. How can you let the user spend more than 100,000 RMB to get a healthy battery eight years later than to spend 890,000 RMB to get a 40-degree battery pack? I think this is a bit... Because in the automotive industry, the automotive product is a 15-year product. You have to have a solution for this kind of thing.

Speaker Change: Hugo Massawa ones coming in kind of a use it or totally as soon you anytime soon.

Speaker Change: Not to confuse it but it'll go down you mentioned the problem of knits for somebody that was a good year.

Speaker Change: But again she's a so.

Speaker Change: So so long that he didn't have kind of high na did she said my son, Joe. So you wouldn't see a woman can wait hung show me and said your institution Tobey. Its really you shouldn't mean not sure tents teaching me I'll tell you coming out of Egencia Women's I've quoted union THL against that I'd mention when do you see as you look into the tuned in to show you that wouldn't you well know.

Yeah, Julien, it's Joe didn't appear in niche and when you are a woman she has her life.

Speaker Change: That's where they're just getting sort of show me and.

Speaker Change: Oh well Mr itself, I mean, she's a courtyard union sort of fits I'll go to you and you say Gee I'm going to wait till you get Yoyo C. A citizen to me out of search in Chennai, and she said you can't really be I.

Speaker Change: I mean should I just again, so they're showing me and could this is really a show me. So some good ammonia known shoes tend when she said yeah bulk with interim yeah boat clubs happens.

Speaker Change: Did it go into is a minimum level you would say.

Speaker Change: Pontiac Hope Y'all Quad cities and what are your clients didn't come it didn't slip youll Quad city O&M and B you have to do the tenants about how far apart you won't even be what you didn't say that it does somewhat.

William Li: And it's the ultimate solution. So that's why there's the whole idea of changing electricity from the beginning. We've been communicating with the market on this. Thank you for the question.

She was the flu.

Speaker Change: I'm good.

Speaker Change: You said it.

Speaker Change: B shoot their tenancy and see what you'll find out that just so you got automate the legal found that so it takes away from away like tell me cousins, you'll find some good it down he gets to lose their thinking when mcquilkin silicon clicking you'll Joseph how many they told you.

Speaker Change: Thank you for the question in terms of the battery technologies actually Neil has been having this long standing strategy also studying the ultrafast charging as well as ultra quick battery swapping a in terms of the charging actually Neal is the most active grant in terms of deploying public.

William Li: In terms of battery technologies, actually NIO has been having this long-standing strategy of studying ultra-fast charging as well as ultra-quick battery swapping. In terms of charging, actually NIO is the most active brand in terms of deploying public chargers for users in China. And as of now, 80% of our electricity is charged for the non-NIO users than for the NIO users. For NIO Power's charging business by itself, it is already breaking even.

Speaker Change: Charge offs for the users in China and as of now 80% of our electricity score charged for the non you'll use our spend for the new users, but the newer powered charging business by itself. It is already breaking even and we will continue to deploy the chargers for the users very soon we are going to install and the lunch hour 600 <unk>.

William Li: And we will continue to deploy the chargers for users. Very soon, we are going to install and launch our 640 kilowatt power chargers. So definitely, we will follow the latest technologies in the charging industry. In the meantime, we also need to emphasize how fast the power swap can be because no matter how quick you are at the charging rate, it can never outrun the power swap. Some media have used the analogy where the power swap is as fast as 20C, as fast as charging at 20C, in comparison to 5C on a common charger.

Speaker Change: 40 kilowatts of power Chargers, so definitely we will follow the latest the technologies are in the charging industry in the meantime, we also needed to emphasize on how fast the power swap compete because no matter. How quick you are on the charging rate it can never out around the power swap. Some media has to use the analogy where power swap is as fast as.

Speaker Change: 20th see asbestos charging at 20 C. In comparison to a five C. On a common charter not to mention that the battery swap also have the best experience for the users and in use holistic solution. In addition to chargeable and the swap of ball. We also have upgrade pool, which is also very important especially to serve the interests.

William Li: Not to mention that battery swapping also has the best experience for the users. And in NIO's holistic solution, in addition to chargeable and swappable, we also have upgradeable, which is also very important, especially to serve the interests of our users. Very soon, we are going to have our 150 kilowatt-hour battery. We also have a 5C charging rate that will become available on our first model from the third generation products, the ET9. But in addition to looking at the battery capacity and the charging rate, what really matters is the lifetime of the battery. For that, we think that it's very important because, at the moment, the industry average warranty duration is around eight years or a hundred thousand kilometers, or when the battery hits 70% of its health.

Speaker Change: All of our users.

Speaker Change: So we are going to have over 150 kilowatt hour battery.

Speaker Change: We also have a five C charging rates that will become available on our first agenda first step model from the third generation products are each and I, but in addition to looking at the battery capacity and they're charging rates what really matters is the lifetime of the battery of four that's we think that it's very early.

Speaker Change: Fortunately because at the moment to the industry average warranty duration is around eight years, we're 100000 kilometers something where when the battery sheet, 70% state of health, but if you look at the vehicle. It has a lifecycle off around for 15 years for most of the electric vehicles on the streets that they haven't.

William Li: But if you look at the vehicle, it has a life cycle of around 15 years. For most of the electric vehicles running on the street, they haven't really hit the end of their batteries' life yet. But as car companies, we really need to consider the 15-year life cycle of your products, including cars, and especially batteries. That's why the calendar lifetime of the batteries becomes more important for car companies. Over the past several years, we have tackled the difficulties of battery safety, efficiency of charging, and also the accessibility of the charging and swapping facilities. And this year, we will focus on long-life batteries. We have already done some research and studies on the technologies, and recently we are going to share more information with the industry.

Well the sheet at the end of life of their batteries, yet that's as the car companies were willing to consider about the 15 year life cycle off your products, including cards, including batteries. That's why the calendar of lifetime after batteries becomes more important for the car companies over the past several years, we have talked about the difficulties.

Speaker Change: On the battery safety efficiency of charging and also the accessibility yourself, they're charging and swapping facilities and from this year, we will focus on the long life batteries, we have already done some research and studies on the technologies and originally we're going to share more information, whereas the industry. What we believe that's where it's a longer.

William Li: We believe that with a longer battery life, especially longer calendar life, it will help not only battery-electric vehicles but also PHEVs and EREVs or new energy vehicles in general. Because after eight years, when the battery hits its end of warranty life, you cannot ask the user to pay another 100,000 RMB to upgrade the battery or to buy a new battery. Even for a smaller battery pack of only 40 kilowatt hours, you cannot ask them to pay 80 or 90,000 RMB for a brand new battery.

Speaker Change: Our battery life, especially longer calendar lives. It will help not only in the battery electric vehicles, but also P. H E BS and the E. R E V, where the new energy vehicles in general because after eight years when the battery heaps. It's Andrew why don't you live you cannot ask the user to pay another hundreds out of the army too.

Speaker Change: Where the battery where to buy a new battery even for a smaller battery pack off owning 40 kilowatt hour capacity you cannot ask them to pay a T 119000 to RMB four eight brand new battery so as a car company we needed to look after both battery and of course of course, well throughout its lifecycle in that case, we need to provide the ultimate.

William Li: So as a car company, we need to look after both the battery and cars throughout their life cycle. In that case, we need to provide the ultimate battery solution to the industry. Thank you, William.

Speaker Change: Actually a solution to the industry.

Speaker Change: Thank you William.

Speaker Change: Thank you. Your next question comes from Paul Gong from UBS. Please go ahead.

Unknown Executive: Thank you. Thank you. Your next question comes from Paul Gong from UBS. Please go ahead.

Paul Gong: Hi, Thanks for taking my question. My first question is we've got single on departure sports I'm, just wondering how much do you plan to spend.

Paul Gong: Thanks for taking my question. My first question is regarding your R&D budget for 2024. How much do you plan to spend on R&D for this year? And, if you can, would you please give a rough breakdown of how much of this would go to the new models and how much would go to the outputs and how much to the third brand and how much would go to the autonomous driving software and some key components, etc. So regarding the R&D spending plan for 2024. Hi Paul, this is Stanley.

Paul Gong: R&D for this year and if you can.

Paul Gong: Would you please keep all rough breakdown.

Paul Gong: Much of this was close to the deal model sand how much go to the output how much too soon.

Paul Gong: And how much goes to the autonomous driving software and <unk>.

Paul Gong: Key components et cetera.

Speaker Change: So regarding the R&D spending.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Hi, Paul This is Danny regarding your question about the R&D expense expectation for Kensington before are generally the SKU, if R&D expense will be consistent with our 2023 and.

Danny Chu: Average the quarterly spending for R&D will also be around RMB 3 billion.

Stanley Qu: Regarding your question about the R&D expense expectation for 2024, generally, the scale of the R&D expense will be consistent with 2023. And on average, the quarterly spending for R&D will also be around RMB 3 billion. Yeah, that's the general guidance for R&D? Last year, on September 21st, NIO Inc. and I discussed our 12 full-time jobs.

Paul Gong: Yeah, that's the general guidance for R&D.

Paul Gong: But quite soon from enough element on Oh, the high school with me here, it's useful Xiaomi box, Oh communion to smart electric cigarette sheets as a critical immune of vehicles off on the she's a meal Atlas J S. Why are you selling them commune and come in it's how you're working with is your number.

Paul Gong: Women are women junior and try to actually home and then you know you can tell them have gotten a little bit of sugar.

Speaker Change: Oh no Madame.

Stanley Qu: We are still investing in these 12 areas. In general, 70% of our employees are related to smart technology. This is an approximate proportion.

Speaker Change: Good <expletive> Mucci change in Peru.

Speaker Change: Sure.

Speaker Change: He got guy needs a woman by Evans take a chooser. The town has yet to go to you and those are going to go some odd technology someone to target. So you can that athletes.

Stanley Qu: In terms of how to allocate the R&D expenses this year, we will mostly allocate our resources to the fundamental technologies as well as the technologies that can be shared across all three brands. We have mainly focused on the smart and electric technologies which can already be shared across NIO, ELPS, and also Firefly, which is our third brand. And last year in September, we announced our 12 tech technologies at NIO Inc. Tech Day.

In terms of how to allocate the R&D expenses. This year, we were mostly allocate our resources on the fundamental technologies as well as the technologies that can be shared across all three brands are we haven't mainly focused on the smart and the electric technologies, which kind of which kind of.

Speaker Change: Could you please share it across Neo Alps, and also Firefly, which is our third brand and the last year in September we have announced our 12 foot darker technologies after the new interacting and basically our R&D investments will be dedicated into this tough I mean areas and in terms of the personnel structure.

Stanley Qu: And basically, our R&D investments will be dedicated to these 12 main areas. And in terms of the personnel structure, around 70% of our R&D people are focusing on the smart technologies where relevant areas. Yeah, sure.

Speaker Change: Around 70% of our R&D people are focusing on the smart technologies, where I ran events areas.

Speaker Change: Okay.

Speaker Change: Yeah sure My second question is with cotton.

Speaker Change: Most of our.

Speaker Change: Oh No I think you mentioned of course, he is going to be about 10% lower than Tesla.

William Li: My second question is regarding the cost of Alps. Just now, I think you mentioned that the cost is going to be about 10% lower than Tesla. Can we give a little bit more color given this is actually a pretty impressive number when you consider Tesla is building almost 1 million cars in China a year, of which 700,000 are already Model Y. On what volume scale are you based to assume the Alps costs, and what are the key advantages you have adopted for this cost advantage compared to Tesla? Sponsored ADR Class A, Sponsored ADR Class A, Sponsored ADR Class A, Thank you for the question.

Speaker Change: Can we give a bit more color given this is actually a pretty impressive.

Speaker Change: A lump or when you can see the Pennsylvania building almost a one bedroom colchicine China.

Speaker Change: Oh Boy I shouldn't say why don't you saw with India, So really kind of come with a Y O Y O boarding school are you based on how to assume the costs and so what are the key.

Speaker Change: Lumpy too so you'll have all adopted for the so called soft longish.

Speaker Change: Uh huh.

Speaker Change:

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Yeah, no. So what that tells me that Tessa Tessa Molly do you think you'll continue to see Shimon Almeida, you'll need to slow down they said they'd be not.

Speaker Change:

Speaker Change: I'm going in with a lead time I thought that those without too much of the change I would say that it's a good trigger to go. She is most of the time I guess I'd say that as a good sort of I'm getting on she had citizens huh.

Speaker Change: Sean do you want to go to a degree cooling, Indiana Yoshi Chew them until you hit that you haven't filed for them and of course, you had some of the unit total unit young woman, but yeah I'm far from it often Toyota you got the mutual says you got somebody having fast food junk deal on the trigger to go boom for the Towne deal I'm Nikki good without a ton, but now it's almost like a lifetime I Wonder woman.

Speaker Change: Hmm, which element I'm glad you're on when Bush Jacobi I thought Oh man you go clearly that you go you go down to go.

Children libido contextual to well short of time like a tumbling.

Speaker Change: But they're shaping took a took a hoodie theyre down in EMEA. So do you though comes on Google you wound down and you've got you've got a sometime she was saying a hoodie ego.

Speaker Change: So are you, saying go ahead, Peter Jen hungry eagerly yeah. So you wouldn't push you up on your back went downtown acquainted with hands on battlefield one.

William Li: Actually, for Tesla, as they also publish their gross margin details on the products, so it's easy for us to make a comparison. In terms of what advantages we can take for the Alps and its cost structure, actually, China is the largest automotive market. It is also the biggest market for smart electric vehicles with an already well-established supply chain. So we can already leverage the advantages of the domestic supply chains here in China. Not to mention that in the past several years, we have made investments in and also achieved accumulation in R&D activities. R&D is one of the key drivers of improving the cost structure and reducing the bomb cost of the product. In that case, we already have a pretty good foundation.

Speaker Change: Thank you for the question actually for Tesla is they also public air gross margin can you tell us on the product. So it's easy for us to make a comparison in terms of what advantages we can take for the Alps, and its cost structure and actually China is the largest automotive market. It is.

Speaker Change: Also the biggest market for the smart electric vehicles with already well established a supply chain. So we can already leverage the advantages of the domestic supply chains here in China not to mention that in the past several years, we have made investments and also achieved accumulations on the R&D activities and R&D is one of them.

Speaker Change: The key drivers of improving the cost structure and reducing the bom cost of the product in that case, we already have a pretty good foundation, and and where that he doesn't need that you're really real life, a very huge volume to realize at that level of cost of structure are in China for the manufacturing facility.

William Li: And with that, we don't need to really realize a very huge volume to realize that level of cost structure. In China, for the manufacturing facilities, a reasonable volume will be around 10,000 units per month. We don't need to really go to the level of 1 million to realize that level of cost structure. So the cost is compared to Tesla China or Tesla Global for the 10%. Sorry, just a quick follow-up. Okay, thank you very much.

Speaker Change: It's a reasonable volume will be around in terms of other units per mouth, where it doesn't need we don't need to really go to the level of 1 million two will that start to level off on costs.

So it's a coffee as a compared to last a long time now a personal have global off of the 10% sorry, just a quick follow up.

Speaker Change: So and then well then female she's sort of test that China women dancers with Hudson.

Speaker Change: Okay. Thank you.

William Li: That's quite helpful. Yeah, to translate for that, we didn't really look at Tesla China specifically; we're comparing with Tesla worldwide. Thank you very much.

Speaker Change: Yeah, two or trying to fight for that we get them to where they look at it the Tesla China, specifically, we're comparing with Tesla globally.

Speaker Change: Thank you very much that's helpful. Thank you.

William Li: That's quite helpful. Thank you. Go, Paul.

Speaker Change: Yeah.

Speaker Change: Thank you Paul.

Speaker Change: Yeah.

Jing Chang: Thank you. Your next question comes from Chang Jing from CICC. Please go ahead. Okay, thank you for taking my questions. I have two quick questions.

Speaker Change: Thank you. Your next question comes from changing from CIC. Please go ahead.

Speaker Change: Yeah.

CIC: Okay. Thank you for taking our questions I have two quick.

Jing Chang: The first is also about charging and also a better swap network. We can see that our network is still, and our construction progress of the charging network is still the fastest in China. But at the same time, we see many other companies that are also accelerating their construction of the, especially the fast charging network. So how do we see that we can maintain our first mover advantage? And also, how do we look at the relationship between fast charging and also battery swapping?

CIC: Questions. The first is also about the targeting and also at that as well and that's work we can see that our net markets too.

CIC: Our construction program, so that the trucking network if you parse it.

CIC: In China.

CIC: Many other companies that are also accelerating their construction L P, especially the fast charging network so how do.

CIC: So we think that'll become apparent.

CIC: Our first mover.

CIC: On page and also how to be the academy relationship between Oh, Gosh charging and also Patrick smoke.

William Li: From the perspective of charging, we are building it ourselves, some of our peers are building it, and there are some independent companies who are building it. We are getting close to 1 million and 3 million charging stations. Of course, the more charging stations, the better the efficiency of electric vehicles. But when it comes to charging, we have the most. Although some of my peers are building charging stations, there is a huge gap between us and them. We already have the advantage of the network effect. So most of the companies that are building charging stations are seriously considering joining our network. This is the same story as what happened in the cloud field.

Speaker Change: Yeah Ah Tony.

Speaker Change: The other leg down that aren't that don't Ya Qin said, Tim Haldane will mirror that tends to mirror kind of hung on that yeah. So yeah, you always hit to eat at home. So that's yeah. So let me a kitchen are usually about London to Samsung.

Speaker Change: 20th drunken Eva tour to get paid on sort of shell.

Speaker Change: Saudi a community called US one day.

Speaker Change: No I know among community Tordella, San Diego's yet take a tongue handset churn so funding inside the home and it's hard to get hundreds how to fit on that well meet you years ago, while showing the Yosef Sleep Center toggle Hudson you didn't that's all I'm getting at there. She took almost yeah. That's in serious college Yahoo have nowhere to go to confer clouded.

Speaker Change: So that's one of course, yeah. So you don't know how those type of vehicles.

William Li: In the end, it is the heads of these companies who open the network to the entire industry. So we actually see this trend in the field of charging. So I always feel that it is almost the same as the cloud infrastructure. It is the same development track. We have never compared the relationship between charging and data.

Speaker Change: Really over the long ago, Kevin Gade cigarettes hung yeah. So your woman she was down one again.

Speaker Change: None of them tend to see what you thought you would have called out as a.

Speaker Change: Almost a cloud infrastructure. The younger you go you go faster.

Great.

Speaker Change: Chengdu and Guangzhou Woman's health led to somebody but I tell you David Sheila that you wait till they are done those hunting shop potbelly it with how to figure how to abuse attached homes that don't that doesn't stay hot mix, yet now you're gonna need.

William Li: Because charging has its advantages in many scenarios. For example, charging is always the best experience. If you add a small amount of electricity, of course, supercharging is also very good. If you care a lot about time, of course, charging is always the best experience.

Speaker Change: So yeah I'll, let then you balance household yeah from call.

Speaker Change: Oh, I'm, sorry horse again, and you tell them one day, you'll have all of it yet, but I do know him and opinions that are changing so judging by the Jewish or Muslim cool with that goes with a bunch of you and what I'm getting at would prevent they've been nailed to the mail to go underneath that.

William Li: For example, during the Spring Festival this year, nearly 90% of our users used our charging service on the highway unless there was no charging station there. So this solves different problems. Another advantage of charging is that it is never possible to have it. For example, there is no need to get out of the car. It is a fully automatic experience.

Speaker Change: So you took out the woman she number one didn't I didn't want you to stay tuned yeah, you got it because I don't use data useful for them.

Speaker Change: Sure I'll take a push out of a shop hood about Saddam Kenzo modality, yet could be as a cushion for you guys down the ships yet number tigger women send that Sundar you want what do you mean by means of Joseph who also young women Belgian she'll Huntington's about C O band that ship out in the bathroom course, he owns how Michelle Huntington's.

William Li: Especially, it is an upgrade experience. 90% of our new users use our standard battery pack, and only 7% or 8% of users use the long-life battery pack. Before the power outage, it was 50 to 50.

Speaker Change: So I'm gonna find the entire 17 against them with Hudson and Mercer will slip you wish it would be D. C. It took an M tariff and volume quarter. So good switching could see I mean I would assume.

William Li: So it can save a lot of users' funds and social resources. Because in Shanghai, a big city like this, a standard battery pack with a 500-kilometer battery life is enough. If you need to go out of the city, you can rent a 100-degree battery pack. During the Spring Festival this year, we provided a lot of flexible services like this. Of course, we will soon deliver a 150-degree battery pack to meet the needs of 1% and 2% of the scene. We think this is a very good solution. However, there are some other solutions. For example, charging and supercharging. Of course, there is no doubt that the life of the battery is the best solution. This is a more idealistic analogy. For example, silicone smoking is definitely better for the body.

Speaker Change: You know what time it brings that that sounds high but it was down in the bathroom. So okay well back when you show Honda Golden She'll Huntington's a bunch of players who are attached to them and talk to you. So your baidu tenants about so much in your Internet you didn't know tumor and brought down the NIM question, we get a full well that you don't have with Joe for you bet. It will slow down it's about doing that and doing them a times ive got it down to target in the future or the way it does.

Speaker Change: Hum took a holiday you'll find that number how do you set up on the one getting the Ohio foot you'd so you'll in total would be getting sort of show me. How are you. What is the three holiday some of that did it. So you got but hey, tore down that you're going to be until he got production going to be some tigger she don't Matt young community.

Send music Hum.

Speaker Change: It's a longtime OEM can use a yo Yo Yo Yo pay weight and email them at all so anyway, there's a trigger chips.

William Li: Sponsored ADR Class A, So anyway, this is actually a very good ultimate solution for charging to maintain the life of the battery, to extend the life of the battery, and to extend the life of the battery by means of operation. So, in fact, there are a lot of benefits to charging. It's actually not the opposite of charging. It has a lot of natural advantages. No matter what kind of battery it is, it can't be replaced.

Speaker Change: One way you who didn't sort of show me a young hunk against there's so many millions so a bunch of Yens hunk instead of show me to figure out how do you go to mutate, you'll find that she's a Hyundai Ulsan Buda took a heart to heart she's a hudson getting pushed if they need that.

Speaker Change: So naturally that how did you get useful for Columbia is because of the amount of time getting those who maybe not too bad.

Speaker Change: Okay.

Speaker Change: Thank.

Speaker Change: Thank you for the questions as are we are very happy to see that so many other car companies, including peers as well as other third party companies are also dedicating our resources into our install in charters are in China as the more charters, we have publicly as it better there.

William Li: Thank you for the questions. We are very happy to see that many other car companies, including peers as well as other third-party companies, are also dedicating their resources to installing chargers in China. As the more chargers we have publicly, the better the charging experience and the charging efficiency will be, so we are also dedicating, or actually, we are also installing a lot of chargers. But in addition to that, we also have many power swapping facilities. We are the car company with the most power swap stations. Some companies in the industry are also installing power swap stations, but so far, we are still the single largest swap station operator with established, and with that, we have already established a very good network effect where we can further leverage on that.

Speaker Change: Experience and they're charging efficiency will be so we are also dedicating a world where actually we are also installing a lot of charters, but in addition to that we also have many power swapping facilities. We are their car company with the most of the power swap stations are some companies in the industry are also installed in power swap stations, but so.

Speaker Change: Far where still the single largest swap station operators.

Speaker Change: With whereas already establishing a well that we have already established a very good network effect, where we can put our language on that.

William Li: So overall speaking, many other car companies who are serious about the battery swap or who are interested in the battery swap now choose to join our battery swapping network and alliance because they can also rely on our network effect. But another thing is that the charging and swapping, these two are never in conflict with each other. Of course, for charging, there are some special benefits. For example, if you have chargers at home, you can always enjoy the best charging experience. Or if you're on the go and you only need to charge for 20 or 30% SoC, you can also choose a faster charger. But if you need to have a full charge in a very short timeframe, power swap is still the best option for you.

Speaker Change: So overall speaking our many other car companies, who are serious about the battery swap or who are interested in back with spot now chose to join our breakfast swapping not to work and the alliance because they can also rely on our network effect.

Speaker Change: But another thing is that the charging and swapping there's two are never in conflict with each other and of course, where they're charging there are some special benefits. For example, if you have charge offs at home you can always enjoy the faster charging experience or if you're on the go and you only need to charge for 20 or 30% S. O C. You cannot answer.

Speaker Change: Foster charter, but if you need to have a full charge in a very short time frame power swap is still the best option for you like during the spring festival over 90% of our reuse is traveling on highways to still do the power swap and when they're charging.

William Li: Like during the Spring Festival, over 90% of our users traveling on highways choose to do the power swap rather than charge their devices. So that's the special benefit of the power swap. Not to mention that the battery swap station itself is a natural energy storage system. When users do the power swap, they don't need to get off the car. The entire process is fully automated.

Speaker Change: So that's a special a benefit of our power swap not to mention that the battery swap station itself is a natural energy storage system.

Speaker Change: So I started doing power swap they don't need to get off the card. The entire process is fully automated not to mention that we also have the.

William Li: Not to mention that we also have a battery upgrade that is enabled by the swappability of the battery. 80% of them chose the 100 kilowatt hour battery pack, that is our long-range battery pack. But before we had this many power swap stations in China, 50% of our users actually chose the 100 kilowatt hour battery pack. By having more users choose the standard range battery pack, the benefit is that if you're only driving the car in Shanghai for the daily commute, you can have a sufficient range with 75 kilowatt hours. But when you need to have a weekend getaway where we need to travel for a long distance during the holidays, like during the spring festival, you can use the flexible battery upgrade to upgrade to a 100 kilowatt hour battery.

Speaker Change: Battery upgrade that is enabled by the swap abilities of the battery for example.

Speaker Change: So 80% of them chose 100 kilowatt hour battery pack that is our long range battery pack, but it did before we had this money power swap stations in China, 50% of our users actually chose 100 kilowatt hour.

Speaker Change: The battery pack.

Speaker Change: Having more users choosing standard range battery pack the benefit is that if you're only in driving the car in Shanghai for the daily commute you can be having a sufficient in the range. We're at 75 kilowatt hour about when you'll need to have a we can't get away, where we don't need to travel for long distance doing the holiday sites. During the Spring Festival you can't you.

Speaker Change: The flexible battery upgrade to upgrade to 100 kilowatt hour battery for example, during the Spring festival in many of our users have chosen to upgrade their batteries are flexible and very soon we will launch 150 kilowatt hour battery pack, which will fulfill as I read a rare need maybe only one to two per cent of the use cases.

William Li: For example, during the spring festival, many of our users chose to upgrade their batteries flexibly. And very soon, we will launch a 150 kilowatt hour battery pack, which will fulfill a very rare need, maybe only 1% to 2% of the use cases where users need to travel much longer. And another benefit of a power swap is regarding how it can benefit the management of battery life. Because I can use the analogy, if you eat too fast, it can damage your stomach.

Speaker Change: Where users needed to travel a much longer and another benefit of our power swap is regardless of how it kind of benefits are the management of the battery life.

Speaker Change: Cuz Ah I can't you see and I'll see if you are too fast.

Speaker Change: At your stomach and that you can in a very slow manner. It's the similar thing to the power swap because if you always see a supercharging such quick chart.

William Li: Then eating in a very slow manner; it's a similar thing to the power swap. Because if you always use supercharging, such a quick charge may damage the battery life of your battery. But with battery swapping, we can balance out the battery life. Not to mention that we can also use other operating approaches and mechanisms to further enhance the battery life. So overall speaking, we don't think battery swapping and charging are conflicting with each other, and these two actually go hand in hand.

Speaker Change: Charge may damage the battery life of your battery, but with battery swap we can balance out the battery life not to mention that we can also use other operating approaches on the mechanism to further enhance our battery life. So overall speaking, we don't think battery swap and the charging or conflict with each other.

Speaker Change: And there's two actually compounding hands.

Speaker Change: [noise] among other countries.

Speaker Change: Yeah.

Speaker Change: Okay. Thank you my second question.

Turning to the lower tier cities.

Speaker Change: And then I see that in 2023, and our sales person in a cluster of shipping has been increased a little bit.

Jing Chang: My second question is regarding the lower tier cities market. And I see that in 2023, our sales proportion in first tier cities has increased a little bit. So well, also our sales proportion in especially third tier and below cities is still less than 20%. So compared to like the NW, which will be exceeding 40%.

Speaker Change: So so well well off of our cells from functioning.

Speaker Change: Especially sort of tiered envelope.

Speaker Change: No less than 20% compared to like BMW.

Speaker Change: I wish that that that that would be exceeding 40%. So it.

Speaker Change: In terms of marketing and other aspects.

Speaker Change: FX so do we have some.

Speaker Change: Two quick to.

Speaker Change: Further to the lower tier cities.

William Li: So, in terms of marketing and other aspects, do we have some assets to break through further to the lower tier cities? This is indeed a problem that we will focus on solving in the next 24 years. In fact, we have been investing in 3rd and 4th-tier cities since the second half of 2023. If we look at the current situation, the sales volume of the first-tier cities, especially Changshanjiao, is still very high.

Speaker Change: Yeah their choices of women's at Hudson yards.

Speaker Change: I'm curious what are you going to sell them, so sanya and shopping in case, you didn't say, it's like a certain.

Speaker Change: Censorship since that change in total.

Well the mood Shen you'll go through kind of how a woman shirts.

Speaker Change: And so that took us a Samsung TV shows will be do you have the fifth encounter them a passenger auto 10, one times, obviously you sounded so saudia magical about you shouldn't sums, which I'm gonna Sunshine in Hodgkin lymphoma, Bachelor Sebastian about in the past she sees something that you guys social Yeah number took a woman shirts. There just you take a trip.

Speaker Change: What's a good go shoulder without a shot at it and they wouldn't do a meal you should have found out that that's.

William Li: Changshanjiao accounts for more than 50% of our sales volume. If we calculate all the first-tier cities, sponsored ADR Class A, we are trying to solve the problem of the downstream of the high-efficiency channels. We are trying to solve the problem of the downstream of high-efficiency channels.

Speaker Change: But anyway, if I'm you know on the well many yeah literature, though it's useful so let's say you take Oh.

Speaker Change: Censorship since you couldn't shots initiatives, how Betsy to show down there to go somewhere else and see what Virginia and you'll some people from the turmoil. That's useful says mcquay, a bushel and say tell me she shops and this is Oh no single women scientists here do you find that's a good young who that she and her team to leave no.

William Li: On the other hand, we have realized the importance of infrastructure on the downstream of the 3rd and 4th lines of the market. So this year, we will deploy a considerable amount of renewable infrastructure on the downstream of the 3rd and 4th lines of the market. Sponsored ADR Class A Sponsored ADR Class A, Thank you for the question.

Speaker Change: The last toilet tissue, a Muslim faith until you're out there you could see where you saw him onto only fitting that he could help that a woman.

Speaker Change: Although you should can go sort of some fireside chat cynicism mingle cingal wound is it a good shout out.

Speaker Change: Thank you.

Speaker Change: Thank you for the question, it's true that in 'twenty 'twenty four we needed to solve the problem regarding enlarging our rich in the lower tier cities and also opposed to the south in those cities. We have realized the significance of this and we have already started to take actions in the second half of 'twenty to 'twenty three are by enlarging our rich into the lower tier cities.

William Li: It's true that in 2024, we need to solve the problem regarding enlarging our reach in the lower tier cities and also boost sales in those cities. We have realized the significance of this, and we have already started to take action in the second half of 2023 by enlarging our reach into the lower tier cities. Right now, if you look at our sales volume distribution, basically more than 50% of our sales volume is contributed by sales in the Yangtze River Delta areas. And if we look at all the Tier 1 cities, more than 70% of the sales actually happen in the first tier cities.

Speaker Change: Right now if you look at our south volume distribution basically more than 50% of our soft volume is contributed by the south in the youngster River downtown areas and if we look at the all the tier one cities more than 70% of that sounds actually happened in the first tier cities. So it's very important for us to find the right approach.

Speaker Change: To penetrate into the lower tier cities and enlarge our channel rich in this the cities on the other hand, we have also realized that that's what the infrastructure like they're charging and the swapping facilities are also playing a very important role in boosting yourself in this lower tier cities. So this year, we will also focus on installing more charterers and.

Speaker Change: The swap stations in this the third in the third or fourth tier cities. So that we can enhance the overall user experience and the competitiveness in those areas and this is an opportunity as well as a challenge for us in 'twenty 'twenty four we need to find the efficient approach to tap into the lower tier cities and to improve the south volume in those areas.

William Li: So it's very important for us to find the right approach to penetrate the lower tier cities and enlarge our channel reach in these cities. On the other hand, we have also realized that the infrastructure like the charging and the swapping facilities are also playing a very important role in boosting sales in these lower tier cities. So this year, we will also focus on installing more chargers and swap stations in third or fourth-tier cities so that we can enhance the overall user experience and competitiveness in those areas. This is an opportunity as well as a challenge for us in 2024.

Speaker Change: Yes.

Uh huh.

Speaker Change: Thank you thank.

Speaker Change: Thank you that's all my questions all of my question.

Speaker Change: Okay.

Speaker Change: Thank you. Your next question comes from Tito <unk> from Goldman Sachs. Please go ahead.

Tito: Thanks for taking my question. So the first question is regarding your sales network and sales team expansion.

Tito: Just wondering for both the new friend as far the Alps, Brent how many new stores.

Tito: That you opened this year and how many new sales people do you expect your higher for each of these brands.

Speaker Change: Hi, Timna.

Speaker Change: Yes.

Speaker Change: Can you repeat your question.

Timna: Oh, sorry. So my first question is regarding your sales network and sales team expansion. So could you share for 'twenty 'twenty four how many stores do you plan to open for.

William Li: We need to find an efficient approach to tap into the lower tier cities and improve the sales volume in those areas. Thank you. Yes, I thank you. That's all my questions, all of my questions.

Timna: For both meal and Alps brand and also how many salespeople do you expect to hire for these spreads.

Timna: Yeah.

Timna: So Neil the charter and I don't know, if I know him and I'm glad I can.

Tina Hao: Thank you. Your next question comes from Tina Hao from Goldman Sachs. Please go ahead.

Speaker Change: So let me show you deal.

Speaker Change: Ah well bags I'd say it went back again, so you said that Oh man I didn't notice that you go to that getting shot see Oh quotes you true that you said do you show that you see.

Unknown Executive: Sales Network, for both the NIO brand and for the Alpine brand. Sponsored ADR Class A, I'd Tina, can you repeat your question, please? Oh, sorry.

Speaker Change: So if I'm in a hot and the good thing of course that will show up necessarily all of them or you've got enough on a Sunday or a meal you deal with Chamberlain. So you called out yeah for sure Uhm Toyota has which you go to Virginia and bad to good shoulder.

William Li: So my first question is regarding your sales network and sales team expansion. So could you share for 2024, how many stores do you plan to open for both the NIO and ALPS brands? And also, how many salespeople do you expect to hire for these brands? Yeah, from NIO's point of view, we are increasing our power consumption because we now have more than 500 power stations. So, in fact, we are increasing our power consumption, including replacing some low-power stations. So, in this respect, the expansion of power is not our primary task.

Speaker Change: So your articles or del Amo Homewood suites have quotes out there as opposed to pushing the boys who are considered the peninsula.

Speaker Change: I think a well in the dark and pilot can you sort of how you want to take a oh with how's it could change in that at all or maybe you can say sorting the take a so called though that's Lou Ann.

Speaker Change: A woman can nimble at getting them a tungsten.

Speaker Change: So if you just kind of getting old media, which will go to the zoo I.

Speaker Change: Hey, Jinyan, Samsung that I sort of I know women are more gossip, but do you really I'm very excited to go back to the.

Speaker Change: It's a good time to go home that people pay for them. It doesn't have enough on our you mean sounded I assure you. We're touching until you plan. So so it's hard to pick a shoulder to shoulder you can always hit a woman scenario. So don't go near the tissue and liquidity General base you show sort of you got a number sorry, it took our office essentially.

William Li: As for our personnel, we already have more than 5,000 people, so the expansion of personnel is not our primary task. The most important thing now is to improve the efficiency of operations. This is our primary task. Of course, we will do some expansion, but it will not be our main task. Sponsored ADR Class A Sponsored ADR Class A Sponsored ADR Class A Sponsored ADR Class A Thank you for your questions.

Speaker Change: There wasn't a difference I mean, it sounds like he couldnt bushing disorder too.

Speaker Change: You have to go to be financings. What are you guys also T shirt.

Speaker Change: Well it might be it's holding costs with immune cell phone beans, yeah. So you took a cigarette some delay so I'm sure that they know when to you, but it's often dumping them in patient that's up I'm employers either to other one Neil and myself kind of policyholder you guys show soda you're good to go shoulder.

Speaker Change: Good.

Speaker Change: So they go out either shaky.

Speaker Change: Thank you for your questions for Neil as the brand actually we have already opened 500 in your houses and new space in China. So far this year, our priority is not on opening up more stores, where spaces with a new brand. Instead, we will focus on improving the efficiency of each point of sale.

William Li: For NIO, as the brand, we have already opened 500 NIO houses and NIO space in China, so this year our priority is not opening up more stores or spaces for the NIO brand. Instead, we will focus on improving the efficiency of each point of sale, including phasing out some low efficiency locations and replacing them with stores and locations of higher efficiency. And in terms of the sales force for the new brand, so far, we already have more than 5,000 people on the team. And enlarging the team will not be the focus either.

Speaker Change: Including phasing out some low efficiency locations and replace them with a sourced and the locations of higher efficiencies and in terms of the sales force with a new brand. So far we have already have more than 5000 people on the team and enlarging the team will not be the circus either in stat that we must focus on the efficiency.

William Li: Instead, we will focus on the efficiency of the overall operations of the team. So enlarging the sales team or increasing the number of sales force for NIO will not be a priority for the current year. But when it comes to our new brand, the second brand, the approach will be different. We have already secured some locations and resources for the new brand. So we will not have a very long lead time to prepare for the store opening. Basically, when we launch the brand, we also hope that we can open no less than 200 points of sales for the second brand. In terms of people, it's the same logic as we can leverage the existing training system of NIO to train the team to make the entire sales team be prepared for the launch of the very first model. So we will focus on the efficiency of such a sales team. Not to mention that for ALPS, they will start with only one project, so the efficiency of the sales should be relatively easy to manage and improve.

Speaker Change: The overall operations of the team so enlarge himself team or increasing the number of self storage for Neal well not to be the priority for the current year, but when it comes to our new brand that does that kind of brand. The approach will be different we have already secured some locations and resources for the new brands. So we will not have a very.

Speaker Change: Long lead time to prepare for the store opening basically when we launched the brand. We also hope that we can open no less than 200 points of self for this that kind of brand in terms of people. It's the same logic as we cannot Richard that you can this team training system off Neil to train the team to make the entire cell.

Speaker Change: This team to be prepared for the launch of the very first time auto show, we will focus on the efficiency such as south team not to mention that says where else. They will start with only one product. So the efficiency of the south should it be relatively easy to manage and improve our this is also another advantage off of starting a brand based on our existing resources.

William Li: This is also another advantage of starting a brand based on existing resources and the network of NIO than starting everything from ground up. Sandwich Kina, Thank you very much, William. Can I just have a follow up? So would the Alps store location resemble that of NIO's location? Unknown Executive, Tim Hsiao, William Li, Bin Wang, Paul Gong, Yuqian Ding, Rui Chen, Edison Yu, Ming Chung, Jason Getz, NIO Inc. Sponsored ADR Class A, Unknown Executive, Tim Hsiao, William Li, Bin Wang, Paul Gong, Yuqian Ding, Rui Chen, Edison Yu, Ming Chung, Jason Getz, NIO Inc. Sponsored ADR Class A, Unknown Executive, Tim Hsiao, William Li, Bin Wang, Paul Gong, Yuqian Ding, Rui Chen, Edison Yu, Ming Chung, Jason Getz, NIO Inc. As Alps, our second brand is targeting at different types of user groups with different price segments and the range Which means that this brand will also have its own principle and logic for the store locations and network development So for Alps, they will select their own stores and locations and also deploy the network according to their own demand Of course, it will be more efficient Because it won't need to build a sales network like NIO or NIO House It will be more efficient like Tesla, And of course, the self network of the Alps will also be more efficient as Alps does not need to have the full-fledged self stores like NIO house. So it's point of self will be more efficiency oriented similar to the self stores of Tesla.

Speaker Change: And then not to work off Neil that's starting everything from Ghana.

Speaker Change: Tina.

Speaker Change: Thank you very much William can I, just have a follow up so what the Alps store location resemble that of meals location.

Speaker Change: Oh I see.

Speaker Change: If I can get hot foods, Cheetah mobile kitchen to take choose to go pull pull choose to go to social Loblaw Oh, So Neil took a publisher you go live photos.

Speaker Change: Got you.

Speaker Change: How has the duty of dish and so they got into it.

Speaker Change: Medallion kitchen, but without a doubt way how does it play.

Speaker Change: Hey young.

Speaker Change: As Alex our second brand is targeting as defined types of user groups with your friend at price of settlements and the range, which means that this brand will also have its own principle analogic for their store locations and are not to work with development self where else they will select for their own stores analog.

Speaker Change: And also deploy their network according to their own demand Santana figures showed you can know where it can go you ship. It sounded I saw a couple of which are new shots you Jenny Neil houses out in your house down to to goods go shows a lot more tied to.

Speaker Change: Okay.

Speaker Change: These three tests that down to where it can drive to.

Speaker Change: You showed a huge change yet.

Speaker Change: And of course, the South network off the Alps will also be more efficient as Alps does not need to have the full fledged yourself the stores like in your house. So its point of sales will be more efficiency oriented similar to the south stores off pass them up.

Speaker Change: Yeah.

Speaker Change: Thank you and my second question is.

Speaker Change: Could you give us some capex guidance for 'twenty 'twenty four and then in the breakdown between vehicle Capex that also you're charging swapping infrastructure capex.

Speaker Change: Uh huh.

Speaker Change: Yes, sure we will control our capex our investment into the engine before like are we already cancelled or delayed projects that we used to pay back to carry out the longer than two to three years and are generally are the capex in this year.

Stanley Qu: And my second question is, could you give us some capex guidance for 2024 and the breakdown between vehicle capex and also your charging swapping infrastructure capex? Hi, yes, sure. We will control our CapEx investment in 2024, as we have already canceled a delayed project with a payback period longer than two to three years, and generally, the CapEx investment in this year will be significantly lower than in 2023.

Speaker Change: They'll be significantly lower than in 2023.

Speaker Change: The deployment of our power swap station network, we will fully leverage the resources of our business partner for the further expansion as I mentioned a bit I mean previous statement yeah.

Speaker Change: So that means we.

Speaker Change: Ah.

Speaker Change: Yeah utilize our own resources to build the.

Speaker Change: The network yeah.

Speaker Change: Thank you well will not utilize your own resource.

Speaker Change: Yeah for the powerful network station network.

Speaker Change: We have made in my life.

Speaker Change: That's that's very yeah, that's very clear and helpful. Thank you.

Stanley Qu: Regarding the deployment of our PowerSwap station network, we will fully leverage the resources of our business partner for the expansion, as I mentioned earlier in the previous statement. That means we will utilize our own resources to build. Sponsored ADR Class A, Yeah, for the power swap network station network. Thank you. That's very clear and helpful. Thank you. Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks. Thank you again for joining us today. If you have further questions, please feel free to contact NIO's investor relations team through the contact information on our website. This concludes the conference call. You may now disconnect the line. Sponsored ADR Class A, Sponsored ADR Class A, Sponsored ADR Class A, Sponsored ADR Class A, Sponsored ADR Class A

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change #100: There are no further questions now I'd like to turn the call back over to the company for closing remarks.

Speaker Change #101: Thank you again for joining us today. If you have further questions. Please feel free to contact meals investor relations team through the contact information on our website. This concludes the conference call. You may now disconnect. The line. Thank you.

Speaker Change #101: Okay.

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