Q2 2024 NIO Inc Earnings Call
Speaker Change: Hello ladies and gentlemen, thank you for standing by for Neo Incorporated second quarter 2024 earnings conference call. At this time, participants are in listen only mode. Today's conference call is being recorded.
Speaker Change: Thank you.
Speaker Change: Good morning, and good evening, everyone. Welcome to Neil's second quarter of 2024, Ernest Conference Call. The company's financial and operating results will publish in the press release earlier today and posted on the company's IAR website.
Speaker Change: On today's call, we have Mr. William Li, founder, chairman of the board, energy executive officer, and Miss Danny Chu.
Danny Chu: Chief Financial Officer.
Danny Chu: Before we continue, please be kindly reminded that today's discussion will contain forward looking statement made under the state copper provisions of the U.S. private.
Danny Chu: and Rui Feng Act of 1995.
Danny Chu: for looking statements involved in heritage risks and uncertainties. As such, the company's actual results may be maturity different from the view expressed today.
Danny Chu: Further information regarding risk and uncertainties is included in certain findings of the company with the U.S. Securities Exchange Commission, the stock exchange of Hong Kong Limited and the Singapore Exchange Securities Trading Limited.
Danny Chu: The company does not assume any obligation to update any forward-looking statements except as required under applicable law.
Danny Chu: Please also note that news earnings press release and this conference call include discussions of un-audated gap financial information as well as un-audited non-gap financial measures.
Danny Chu: Please refer to news press release, which contains a recent consideration of the un-audited non-gap measures to compare both gap measures.
Speaker Change: I will now turn the call over to our CEO, Mr. Wei Lam Li, William, please go ahead.
Speaker Change: Hello everyone, thank you for joining New Training 24Q to Units Corps. Let's have a look at the New Brand that complied the training 24 more years faced this.
Speaker Change: for the enhancing the competitiveness of his NPTEL products.
Speaker Change: In the meantime, as a new technology, so that services and the latest community will recognize that by more people, it's all to take and to deliver a continue to grow.
Speaker Change: News delivery in Q2 reached a quarterly record of over 57,333 units of 143.9%.
Speaker Change: China. New models have over 40% market share among all BVs with the transaction price higher than 200,000 on B.
Speaker Change: [inaudible]
Speaker Change: with that. News amongst the delivery has been more than 200,000 for 4 consecutive months.
Speaker Change: the Total Delivery in Kyo 3 is back into Beijing, 6,000 and 6,000 units.
Speaker Change: In terms of a near-the-fanential performance, with continuous support of the momentum of optimization of a core components and a supply chain, the very commodity in Kyoto increased to 12.2%.
Speaker Change: At the youth community became larger and more vibrant, the second quarter also witnessed verticals in revenues from up to sales and the pulse of its youth.
Speaker Change: the Goldismating of other things continued to improve. Now, I would like to share with you the recent highlights of our products on the application.
Speaker Change: on July 27, near hosted near in 2024 as the event at the event.
Speaker Change: We introduce the food domain opportunities and sky OS and the semacrisis and banyang trees. Moreover.
Speaker Change: They also announced a success for Taipout of a SngGS-1931, our in-house developed cheap for smart driving.
Speaker Change: as the 4M80.
Susan Capability: New Continueter Intuit is Susan Capability.
Susan Capability: in July, the industry's fourth AEP function based on end-to-end architecture with released.
Susan Capability: with less than a real coverage 3.7 times a better than traditional AEB.
Speaker Change: and the next dragon's figure.
Speaker Change: At a new year, we also introduced a near-world model in the M, the brand new architecture for smart driving. Only the act 2 will also be released. This is the most advanced and active based on the M, NWM.
Speaker Change: New filters and the existence of Unnady Art II will be released in the second half of this year.
Wang Zephtembo: Wang Zephtembo 19, our family's centric mass-marked brand Engel is going to celebrate the launch of the Yusufortemodor LCP.
Wang Zephtembo: and the United delivery will start in late September with strong confidence in these all-round products. We will have no effort in ramping up production and forefading the market
Speaker Change: for sales and the services, as of now, the new brand has 100 and the 6th to 1 near-house is and the 400 and 8 near-s babies.
Speaker Change: as 300 and the 521 service centers and 60-3 deliveries centers. The young woman has already opened 155 cities.
Speaker Change: and we have over 200 stores at the end of the year, by the end.
Speaker Change: of Al-Bao-Ci Chang in the Swap Network, so far, near over 2,500 and 6,000 post-war stations worldwide.
Speaker Change: and has provided over 52 male and soaps. Besides, near the installed over 23,000 tall days, we can see that we have a lot of time to get to know what's going on.
Speaker Change: Quique and the hands of Wei Chen is critical for convenience and I see older to drive the EV. All gets to 20. They host it to the near power-up event, where we announce the plan of a power-up country.
Speaker Change: In the 4th half of 2025, New York's charging network will become available in every country in Chinese mainland.
Speaker Change: in the end of 2025, the so-opin network will become available in more than 2200 and 300 counties in China.
Speaker Change: the Badness Support, these initiatives will also announce the La Pao Arp partner plant and the signs and the agreement with the 4th of the partner.
Speaker Change: the continuous deployment of the charging and the working network will help expand the market range of near and on goal and further drive sales goes.
Speaker Change: As a format, devad format.
Speaker Change: the International Extension, our August 20th.
Speaker Change: New York UA website went to life, and they include four, the tow bags were largely launched and the delivery in UAE.
Speaker Change: Hu Yin, Contourable Investment and the Efficient Operations, where we are also actively evaluate opportunities of what the act, introduce and hold that to more markets.
Speaker Change: in the interview called the study released by Zekipo in early June.
Speaker Change: New Models, Rancala Hai, is in the respective segments. New is also the only enemy company, when the in-top ranking for six consecutive years. Ever since is that establishment.
Newer: Newer has been committed to making itself a global benchmark of a quality and the providing great user experience to life cycle quality management.
Newer: As a meal has been funnier than for almost the 10 years, with the marching brand strategy and the international business rolled out, as well as the external change.
Newer: the upgraded the company's vertices in dry.
Speaker Change: In the quest of a blue sky coming near a fire to shape a sustainable and bright future, and the invasions each Earth as a use enterprise where innovative technology meets against accidents.
Neil: with a new brand and the product being long to set the set, the fundamental capability and the long-term strategic planning that Neil has been developing, they will have a great effort. In fact, greater impact.
Speaker Change: Niath, Cumulative and the Investment.
Speaker Change: So it's a case of community operation.
Speaker Change: and the Yifingian infrastructure deployment will lead to bad success in the margin.
Tonya: Reducu Board Tonya's performance in the second half.
Stanley: Thank you for the support. With that, I will now hand the call over to Stanley for Q2's financial details. Over to Stanley. Thank you, William. Now, let me go over our key financial results for the second quarter of 2012.
Stanley: I will refer to and be only a my discussion today on this otherwise stated.
Stanley: I was just a revenue we're 17.4 billion RMB. Up 98.9% the year over year and up to 76.1% the total quarter.
Stanley: Revenue from Li co-steals were 15.7 billing R&B representing an increase of 100 and 18.2%. Year over year and an increase of 87.1% to quarter over quarter.
Stanley: The increase over year was mainly attributed to higher deliveries, partially offset by a lower average set in price due to changes in product mix, and use the right adjustment since June 23.
Stanley: The increased quarter over quarter was mainly attributed to higher deliveries.
Stanley: The sales were at 1.8pm in our MV.
Stanley: is representing an increase of 11.3% year over year, and an increase of 15.6% quarter of a quarter.
Stanley: The year overyear increase was mainly due to the increase in sales of parts, accessories and up to sales vehicle services and provision of power solutions which both grow with our user base and partially offset by lower sales of used cars.
Stanley: The increase quarter of a quarter was mainly attributed to the increase in sales of parts, accessories, and after sales of equal services, provision of power solutions and other products. And the increase revenues from technical R&D services.
Stanley: Li Co-Marging was 12.2% in this quarter, compared with 6.2% for the severe rate of 2023, and 9.2% for the last quarter.
Stanley: The year over your increase was many due to the increased material cost and was partially offset by a lower average setting price.
Stanley: The quarter of a quarter increase was mainly due to decrease the material costs. Overall gross margin was 9.7% compared to its 1% in the 5th period of last year and the 4.9% in the last quarter.
Stanley: R and the expenses were 3.2 billion RMB decreased 3.8% over year and increased 12.4% over the end of the year.
Stanley: The quarter of a quarter increase was mainly due to the incremental design at the development course and the increase personnel course in R&D functions.
Speaker Change: S-G-A expenses were 3.8 filling R-N-B.
Speaker Change: Increate 31.5% year over year and increase 25.4% for the over quarter, which was mainly driven by higher personnel costs related to sales functions and increased sales and marketing activities.
Speaker Change: Law from operations was 5.2 billion RMB representing a decrease of 14.2% year over year, and a decrease of 3.4% of the quarter over quarter.
Speaker Change: Net loss was 5 BADDRMB, representing a decrease of 16.7% year over year and a decrease of 2.7% per cent per quarter.
Operator: for NIO Inc. Second Quarter 2024 Earnings Conference Call At this time all participants are in listen only mode. Today's conference call is being recorded.
Speaker Change: [inaudible]
Rui Chen: I'll now turn the call over to your host, Mr Rui Chen, head of investor relations of the company. Please go ahead Rui.
Rui Chen: Thank you. Good morning and good evening everyone. Welcome to NIO's second quarter 2024 Earnings Conference Call. The company's financial and operating results were published in the press release earlier today and posted on the company's IOW website.
Speaker Change: For more information and details of our audited second quarter, 2020-4 financial results, please refer to our earnings press release.
Speaker Change: Now, this concludes our prepared remarks. I will turn the call over to the operator to facilitate our Q&A session.
Rui Chen: On today's call we have Mr Rui Chen Li, founder, chairman of the board, energy executive officer, and Ms. Danny Chu, chief financial officer. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the state hopper provisions of the US private securities 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 view expressed today.
Speaker Change: Thank you.
Speaker Change: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced.
Speaker Change: If you wish to cancel your request, please press star 2. If you're on a speaker phone, please pick up the handset to ask your question.
Speaker Change: Your first question, it comes from Tim Hsiao from Morgan Stanley. Please go ahead.
Speaker Change: Hi there, I'm T.M.R. Thanks for taking my question. I'll have two questions.
Rui Chen: Further information regarding risks and uncertainties is included in certain findings of the company with the US securities 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. Please also note that NIO's earnings press release and this conference call include discussions of unaudited gap financial information as well as unaudited non-gab financial measures. Please refer to new press release which contains a risk consideration of the unaudited non-gab measures to comparable gap measures.
Speaker Change: the first question is about our new model of 60 because some of our 60 started the precell in May and since since I think the model has received tens of thousands of pre-orders, which is very robust to compare to a new launch state T.
Speaker Change: But how can you also ensure a high conversion rate this time after the official launch on September 19? With a copy, consider getting more aggressive with the official pricing given the competition.
Speaker Change: and the meantime, what kind of supply chain preparation the team has done to avoid any potential supply disruptions after the release starts. That's my first question. Thank you.
Rui Chen: With that, I will now turn the call over to our CEO, Mr. William Lee. William, please go ahead. Hello, everyone.
Speaker Change: Episode 2
Tim Hsiao: Thank you, Tim.
Tim Hsiao: Rui Chen, Rui Chen, Rui
William Li: Thank you for joining NIO 2024 Q2 earnings call. Now for the half of this year, the NIO brand that complete the 2024 model year faceless. Further enhancing the competitiveness of its entity products. In the meantime, as NIO's technologies, products, services, and the user community were recognized by more people, it's all in take and the delivery continues to grow. NIO's delivery in Q2 which are costly records of 57,373 units of 143.9 percent.
Tim Hsiao: [inaudible]
Wei Feng: Wei Feng, Wei Feng.
Wei Feng: I hope that this car is very good, and the car is very good.
Wei Feng: [inaudible]
Wei Feng: [inaudible]
William Li: In China, NIO models had over 40 percent marked this year among all PVs with a transaction price 133,000 RMB. Since Q3, NIO product mix has been continuously optimized. In July and August, the delivery was 20,400 and 98 and 20,100 and 76 respectively. With that, NIO's monthly delivery had been more than 200,000 for four consecutive months. The total delivery in Q3 is back to between $6,000,000 and $6,000,000 units. In terms of NIO's financial performance, with continuous costs of optimization of core components and supply chain, the very commodity in Q2 increased to 12.2%. As the youth community became larger and more vibrant, the second quarter also witnessed that goes in that news from after sales and the power services. The growth matching of other sales continued to improve.
Speaker Change: In this video, we will introduce the first one, which is 21.999, which is the first model of Tesla Model Y, which is the first model of the Tesla Model Y.
Speaker Change: [inaudible]
Speaker Change: But we still have a lot of power and power in this world. We will not use special power, but we still have a lot of power in this world. We will not use special power in this world.
Speaker Change: We are now talking about the two of us in the 12th century, which is the first and the second generation of our family.
Speaker Change: [inaudible]
Speaker Change: Thank you for the question.
Speaker Change: August 15th, we have witnessed the offline of the verifurs to must produce the L-60.
Speaker Change: and the head of South of the Umu brand is actually driving this very first must produce the car, having a road trip in China, and he has been driving the car for almost 20 days, while doing the broadcast.
Speaker Change: on the social media. It has received a lot of attention from the public. Every day there are several millions of views of the broadcast by the members.
William Li: Now, I would like to share with you the recent highlights of our project, Andy and the operations. On July 27, NIO hosted NIO in 2024. As the event, as the event, we introduced the four domain operating system, SkyOS, and the SMA system, Banyan 3, Moreover, we also announced the success for a tap out of the Sengji NS-1931, our in-house feedback trip for smart driving. As for NAD, NIO continued to integrate its system capabilities.
Speaker Change: In terms of the pre-order intake, it actually is pretty good and has surpassed our expectation. So we are quite confident with the overall competitiveness of this project.
Speaker Change: Regarding the price in strategy, well, we launched the project in Need May. We have announced a pre-sell price.
Speaker Change: which is...
Speaker Change: [inaudible]
William Li: In July, the industry's first AEB function based on end-to-end architecture was released. With the scenario coverage 6.7 times better than traditional AEB, it makes driving safer. At the NIO YIN, we also introduced the NIO World Model NVM, the brand-new architecture for smart driving. Only the R2 will also be released. This is the most advanced end-to-end architecture based on NBM, NWM. New features and the experiences of NAD R2 will be released in the second half of this year.
Speaker Change: but over speaking, we will try to strike a balance between the vehicle margin and the price point of the product to find the switch false. In general, we will not be very aggressive as we need to realize a reasonable margin for the product.
Speaker Change: Reporting the supply chain security, our target is that by the end of this year, which is in September, we hope that we can realize a supply capacity of 10,000 units, and sometime next year, we will be able to realize a supply capacity of 20,000 units per month.
Speaker Change: and the same.
Speaker Change: Let's question.
Chair: Chair, thank you, William, for sharing with me. My second question is about the meal brains, the vehicles on the meal brain.
William Li: On September 19, our family's centric mass-markly brand Anvo is going to celebrate launch of its fourth model, L6P. Under the youth delivery, we are starting late September with strong confidence in these all-round products. We will bear no effort in ramping up production and forefailing the market amount. For sales and the services, as of now, the NIO brand has 100 and the 6 to 1 near-houses and the 408 near-bases, as well as 351 service centers and the 63 delivery centers.
Speaker Change: I'm the one who's been doing this for the first time. Because we noticed the monthly sales of the models on the Neil Brand have stabilized in the 20,000 levels in second quarter.
Speaker Change: So looking for, with Airbnb and you for the outside to the e-coselle and the gross property margin based on the current product of the volume.
Speaker Change: So...
standing: Hi Team, this is standing, your question about William Li, I think it's the first time we took the ball to the ball.
William Li: The Onvo brand has already opened 105 stores in 55 cities, and we have over 200 stores at the end of the year. About the charging mass-warping network so far, NIO has over 2,500 and the 6 to 1 power supply station worldwide, and has provided over 50 to million swaps. Besides, NIO has installed over 23,000 power charges and the destination charges. Quick and Hsiao Free Recharging is critical for convincing IT owners to drive the EVs.
William Li: is the one who came to our company and the business owner of the business.
Speaker Change: We are going to discuss the two stages of this discussion. This is the time to discuss the topic of the topic of the discussion.
Speaker Change: is in the city hall, and we will also have a group of directors to discuss our high-mortemical progress.
Speaker Change: [inaudible]
William Li: On August 20th, they hosted the NIO Power-Up event, where we announced the plan of Power-Up Counties. In the first half of 2025, NIO's charging network will become available in every country in China's mainland. By the end of 2025, the swapping network will become available in more than 2,300 countries in China. For better support, these initiatives will also announce the Power-Up Partner Plan and assign the agreement with the first partner. The continuous deployment of the charging and the swapping network will help expand the market reach of NIO and ANVO, and further drive sales growth.
Speaker Change: Thank you for your question. Regarding the vehicle margin of the new blend, in the second quarter we have achieved the vehicle margin as a 12.2%. That is mainly because of the efficiency improvements on the supply side and also in the production.
Speaker Change: in the past four months, we have realized the monthly delivery volume of 20,000 units for more than 20,000 units.
Speaker Change: We also see the opportunities for further improvements.
Speaker Change: including the cost optimization of the product.
Speaker Change: as well as to improve the...
Speaker Change: Hi Marjie and products in the product mix from the marketing side.
Speaker Change: With that, we will keep improving the vehicle margin in the following two quarters of this year and the exact to realize a vehicle margin of around the 15%.
William Li: As for market development, we are accelerating the international expansion on August 20th, NIO's UAE website went live, and in Q4, the products will be launched and delivered in UAE, while ensuring control, investment, and efficient operations, where we will also actively evaluate opportunities worldwide, introduce and product to more markets. In the ANV quality study released by JD Power in early June, NIO models rank higher in the respective segments. NIO is also the only ANV company winning corporate ranking for six consecutive years. Ever since its establishment, NIO has been committed to making itself a global benchmark of quality, and providing great user experience through lifecycle quality management.
Speaker Change: by the end of the year.
Speaker Change: Liang's face, we believe there will be a chance to help us.
Speaker Change: I think we have to be very happy with the relationship between the two of us. We hope that we can also be very happy with the relationship between the two of us. But we don't want to have a special reason.
Speaker Change: and I will also invite you to a Maori community. We will also invite you to a Maori community.
Speaker Change: and also a comment to add serious ed.
Speaker Change: We also see opportunities to improve our delivery volumes month over month.
Speaker Change: yet, we will also need to strike a balance between the vehicle delivery volume and the vehicle margin.
Speaker Change: both will increase that will not be a very drastic manner for either marching or the V. Cole-Volume, as we ultimately we pursue a very good post-profit with our product, so we need to find this with support in between.
William Li: As NIO has been funded for almost the 10 years with the multi-brand strategy and the international business rolled out, as well as the external change, they upgraded their company's value system in drag. In the quest of blue skycoming, NIO aspires to shape a sustainable and bright future, and their innovations each serve as a user enterprise, where innovative technology meets experience excellence. With new brands and the products being launched step-by-step, the fundamental capability and the long-term statistical planning that NIO has been developing will have a greater effect, greater effect. NIO's cumulative and the investment for face-to-case community operations and the efficient infrastructure deployment will lead to better sales and the margin.
Speaker Change: When we were talking about the next episode, we were talking about the third episode of William Li, the third episode of the video.
Speaker Change: We, Tang Qi, said, we believe in the new development of the Chinese New Year's Day. We thought that every month, Tang Qi said that in China, every month, we did 3-4-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1.
Speaker Change: and for the much longer time as new brand targets.
Speaker Change: and the second one, Christ over 300,000 Army.
Speaker Change: and we are going to launch new products and also do faciep to an upgrade on the product. I would believe that in the battery electric vehicle segment, we are analyzing a monthly volume of around 30 to 40,000 units, is a reasonable target and the volume. Say, well, me, but me, the genuine, the grain pad is a little bit dark.
Speaker Change: [inaudible]
William Li: We look forward to NIO's performance in the second half.
William Li: Thank you for your support.
Speaker Change: So, also, for the new brand, our long-term operational target is to realize a monthly volume of 40,000 units at a vehicle margin of 25%. When we were in the market, we couldn't see the market in the world, and we were able to see a total of 30,000 units at a total of 30,000 units.
Rui Chen: With that, I will now tend to call over to Sandy for Q2's financial details over to your family. Thank you.
Danny Chu: Now let me go over our key financial results for the second quarter of 2024. I will refer to R&B only in my discussion today on this otherwise stated. The revenue was 17.4 billion RMB, up 98.9% year-over-year, and up 76.1% quarter-over-quarter. Revenues from legal sales were 15.7 billion RMB, representing an increase of 118.2% year-over-year and an increase of 87.1% quarter-over-quarter. The increase year-over-year was mainly attributed to higher deliveries, partially offset by a lower average setting price due to changes in product mix, and user rights adjustments since June 2023.
Speaker Change: We will continue our journey to the PHEV and the Chenyan.
Speaker Change: We believe in the future, the future has been very powerful.
Speaker Change: We believe that his memory will be a little bit different from his memory.
Speaker Change: and his research might be a lot. At the time, when we talked about Li Li, we also thought that he should have a 15% of Li's research. This is a very important question.
Danny Chu: The increase quarter-over-quarter was mainly attributed to higher deliveries. Other sales were 1.8 billion RMB, representing an increase of 11.3% year-over-year, and an increase of 15.6% quarter-over-quarter. The year-over-year increase was mainly due to the increase in sales of parts, accessories, and up to sales vehicle services, and provision of power solutions, which both grew with our user base and partially offset by lower sales of used cars. The increase quarter-over-quarter was mainly attributed to the increase in sales of parts, accessories, and up to sales vehicle services, provision of power solutions, and other products, and the increase revenues from technical R&D services.
Speaker Change: As for the humble brand, it faces a much larger market with a total hard park of more than 8 million.
Speaker Change: In that case, leveraging our battery as a service as well as our well-established charging and floppy network would believe that almost products will be competitive, even against the competition with P-Hive, Rav and other Bav's models.
Speaker Change: So, for animal products, they do have a higher potential or a bigger potential for a higher self-volume month or month, and for the longer term, our operational targets for animal products will be 15% for more than 15% of these will market. And we believe that it's also a renewable target.
Speaker Change: Thank you very much, I understand you, thanks for the audience I am looking forward to the L-6K launch. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you, your next question comes from Ben Wang from Deutsche Bank. Please go ahead.
Ben Wang: OK, thank you so much. My first question is also a dollar on the LSD. You mentioned that this year your volume target is about 20,000 units, given the show order, the instrument, and such a volume target. And if you get picked up by Americans, we are not actually in the end of the month. So, it was the progress to say October, November, December.
Danny Chu: Vehicle margin was 12.2% in this quarter, compared with 6.2% for the severe rate of 2023, and 9.2% for the last quarter. The year-over-year increase was mainly due to the decreased material costs, and was partially offset by a lower average setting price. The quarter-over-quarter increase was mainly due to decreased material costs. Overall gross margin was 9.7%, compared with 1% in the severe rate of last year, and 4.9% in the last quarter. R&D expenses were 3.2 billion RMB, decreased 3.8% year-over-year, and increased 12.4% quarter-over-quarter.
Speaker Change: So, next is my first scratcher.
Speaker Change: and Second Culture is about the experience of engineering experience, is that the experience that's increasing? What's your target for it for the engineering experience? We have guidance for each quarter in the upcoming six o'clock, thank you.
Speaker Change: I will return to the first question.
Speaker Change: I think that in the past few years, there was a role in the role of the Pope, so we were very excited. In the past few years, we were very excited. In the past few years, we were very excited.
Danny Chu: The quarter-over-quarter increase was mainly due to the incremental design at the development costs and the increased personnel costs in R&D functions. STA expenses were 3.8 billion RMB, increased 31.5% year-over-year, and increased 25.4% quarter-over-quarter, which was mainly driven by higher personnel costs, related to sales functions, and increased sales and marketing activities. Laws from operations was 5.2 billion RMB, representing a decrease of 14.2% year-over-year, and a decrease of 3.4% quarter-over-quarter. Net laws was 5 billion RMB, representing a decrease of 16.7% year-over-year, and a decrease of 2.7% quarter-over-quarter. As of June 30, 2024, our company had cash and cash equivalent, restricted cash, short-term investments and long-term deposits in total of 41.6 billion RMB.
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Speaker Change: Episode 2
Speaker Change: I will take the first question. This is William. Regarding the annual L-60, we will start the delivery of the products from late September, but it will take some time for us to ramp up the production and supply of a new product.
Speaker Change: So, most of our deliveries this year will happen in Q4. We will start to deliver you from the Chamber, but not in a very significant volume.
Speaker Change: and to what's the end of the year we hope that our monthly delivery will be around 10,000 units for the month of December. In terms of the supply side, as the car is equipped with many new technologies, it will also take some time for the supply side to rent up their production.
Danny Chu: For more information and details of our audited second quarter, 2022 financial results, please refer to our early press release.
Speaker Change: Thank you.
Operator: Now this concludes our prepared remarks. I will turn the call over to the operator to facilitate our queueing session. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the hand set to ask your question.
Speaker Change: and the second question is, who is the best?
Speaker Change: Let's talk about it in two parts. One part is the R&D expenses. We still maintain an investment intensity of around 3 billion RMB each quarter from a non-GAAP perspective. Of course, there will be some fluctuations between quarters due to the variations in our projects.
Speaker Change: and the two of us have been using the project for the past three months. The first year, we will start our project at L60. So, the project will be completed in the future.
Tim Hsiao: Your first question comes from Tim Hsiao from Morgan Stanley. Please go ahead. Hi, management team. Thanks for taking my question. I have two questions. The first question is about our new model at 60, because our 60 started pre-selling in late May. Since then, I think the model has received tens of thousands of pre-orders, which is very robust, but compared to old and new launches, they pay. But how could NIO also ensure a high conversion rate this time after the offshore launch on September 19th?
Speaker Change: [inaudible]
Speaker Change: This is Stanley, I will take the second question. Regarding expenses, there are two categories. The first is R&D expenses.
Speaker Change: We will still keep the similar R&D investment taste and intensity in the on the quarterly basis.
Tim Hsiao: With a company considered getting more aggressive with the official pricing given the competition. In the meantime, what kind of supply chain preparation the team has done to avoid any potential supply disruption after the release starts. That's Tim Hsiao. Thank you, Tim.
Speaker Change: So roughly on the non-gap spaces, it will be around a 3 billion RMB every quarter, but there will also be fluctuations where slight differences from quarter to quarter as they are relevant to our actual RMB activities conducted.
Speaker Change: and regarding the second category, S.G.N.A. Expenses. As we have mentioned that in late Q3, we will start the delivery of L60, where that there will be increased in our S.G.N.A. Expenses.
William Li: In August 25th, our first chain company, the real chain company, has announced that the sales of the company has opened 20 more days. It's about 20 days. It's about 25 days. It's about 20 days. So, I think this company's performance is very good. The performance of each company has also caused a lot of attention. Every day, they have a live broadcast, a live broadcast, a live broadcast, and a lot of millions of people are watching.
Speaker Change: and I'm going to say that we are going to have a great time in the future. But as we wrap up the delivery volume of the product, we also think that we will keep optimizing the percentage of the SGNA expenses against the overall self-revenue from L-60. Thank you.
William Li: Thank you, William.
William Li: Thank you.
Speaker Change: Thank you, your next question comes from Tina Hal from Goldman Sachs. Please go ahead.
William Li: Tim Hsiao's situation is very good. It's about Tim Hsiao's situation. It has surpassed our expectations. So, for all of us, for all of us, the price of this car is very fresh. But in terms of price, we now have a sales price. It's $21,990. [inaudible] Thank you for the question.
Tina Hal: Thanks for taking my question, so my first question is also regarding Anglo-L60. So just wondering, let's say 10K volume in December, this year and 20K volume next year. What kind of growth margin should be reasonable for this model? Also, as we are ramping up to higher and higher volume, what is our capacity expansion plan? And also, capax plan for 2025 and maybe 2026, we should expect capax to become higher versus 2024.
Speaker Change: So, that's the first question. The second question is also regarding the sales marketing expense. So, we had over 30 percent.
Speaker Change: XGNA expense gross in the second quarter. Wondering, could you give more details on the sub items? Which is the one that's growing the fastest?
Speaker Change: and also is any of the sales policy recorded in the SGNA expense. So that's my second question. Thanks.
Sangyoutina: Sangyoutina, you will also have a certain type of gymnasium.
William Li: On August 15th, we have witnessed the offline of the very first mass produced L60 and the head of South of the Omo brand is actually driving this very first mass produced car having a road trip in China and he has been driving the car for almost 20 days while doing the broadcast on the social media. It has received a lot of attention from the public. Every day there are several millions of views of the broadcast by the members.
Sangyoutina: [inaudible]
Speaker Change: and I will show you the results of the first test of Wei Feng.
Speaker Change: [inaudible]
William Li: In terms of the pre-order intake, it actually is pretty good and has surpassed our expectation. So we are quite confident with the overall competitiveness of this project. Regarding the pricing strategy, well, we launched the project in mid-May. We have announced a pre-sell price which is 290,900 RMB. That is around 30,000 RMB cheaper than Model Y. And before the official launch of the project on September 19th, we still have some time and room for the final price adjustments and decision.
William Li: But overall speaking, we will try to strike a balance between the vehicle margin and the price point of the project to find the switch spots. In general, we will not be very aggressive as we need to realize a reasonable margin for the project. Regarding the supply chain security, our target is that by the end of this year, which is in September, we hope that we can realize a supply capacity of 10,000 units. And sometime next year, we will be able to realize a supply capacity of 20,000 units per month.
Speaker Change: from a design for a faceless design for course, so let's talk about it. The technology of his technology, we're talking about this car, a very good product.
Speaker Change: We've been talking about the past five years and six years ago, we've been preparing for the future. Let's have a look.
Speaker Change: [inaudible]
Speaker Change: We have started to see our third stage in the third stage, so in the next three seasons, we will continue to move on to the stage.
Speaker Change: So, in the past three years, we had a three-year-old, so we thought we would be able to find a way to make a living.
Tim Hsiao: Next question. Sure. Thank you, Rilland, for sharing with you. My second question is about the new brands, the vehicles on the new brand. Because we noticed the multi-cells of models on the new brand have stabilized at the 20,000 levels in second quarter. So looking for, would there be any further upside to the eco-cells and the gross property margin based on the current product of audio? Yes, this year with us that where would it be the upside to the volume and the margin of new brand has vehicles coming from? That's my second question. Thank you.
Speaker Change: Thank you for your question. This is William, I will take your first question. Regarding our 60, when it's over all production volume riches, I reasonable and expected.
Parkett: Parkett, we believe that it will naturally rely on 15% of the poor margin. Of course, against the fierce competition, we have also reserved the sum room for the variable market chain.
Parkett: of the product so that we will be more flexible in the competition yet almost speaking as the product itself is designed for efficiency and the cost. 15% recommarging is a reasonable target for this model.
Parkett: We actually managed to realize a good balance between the technology advancement and the cost compared to others.
William Li: [inaudible] There is a question about the model of the future brand. I think one thing is that the model of Q2 is the total of 12.2% of the model. The main thing is that it comes from our supply chain and the sales of the sales. As for the sales of our sales in the next four months, we have more opportunities,[inaudible] Thank you for your question regarding the vehicle margin of the new blend.
Speaker Change #100: Regarding the capacity of preparation, we are having the meat at long-term planning for our production capacity in 2025 and 26.
Speaker Change #101: As of now, we already have two factors in operation. App2 has already started to operate two double shifts to support the production of L60. In late September or early October, the App2 shifts will be completed in S2.
Speaker Change #101: and in the meantime, we are also planning our third factory and around Q3 next year, the third factory will be ready to produce the products.
Speaker Change #101: which means that by 23 next year, we will have three factories in operation and it will be sufficient to support our production.
Speaker Change #102: So I think we don't think this is the common sense of the work we're talking about, to be a part of the process of working together with the people in the world.
Speaker Change #103: He may be a professional, but he may not be a professional, but he may not be a professional.
William Li: In the second quarter, we have achieved the vehicle margin of 12.2%. That is mainly because of the efficiency improvements on the supply side and also in the production. As in the past four months, we have realized the monthly delivery volume of 20,000 units for more than 20,000 units. We also see the opportunities for further improvements, including the cost optimization of the product as well as to improve the high margin products in the product mix from the marketing side.
Speaker Change #104: We have been working on a long-term business for the past few years, so we can't do anything about it.
Wobo: Wobo speaking, we don't think production capacity will be a bottleneck for us, especially it will not be a long-term bottleneck for us. Here in China, the production capacity and capabilities of the vehicles and the parts are quite competent.
Speaker Change #106: may be some companies will face short-term disturbance in their capacity and supply, yet for long-term it will not be a bottleneck. It's been totally last year, we have obtained the independent manufacturing qualification. This has also led a foundation for our long-term stable capacity.
William Li: With that, we will keep improving the vehicle margin in the following two quarters of this year and expect to realize a vehicle margin of around 15% by the end of the year. We are not going to hope that there will be a specific increase in the month, but we will still be able to achieve a margin of around 15% by the end of the year. It is a very realistic manner for either margin or the vehicle volume as we ultimately we pursue a very good growth profit with our project, so we need to find the sweet spot in between.
Speaker Change #107: I'll go. I'll go. I'll go.
Speaker Change #107: [inaudible]
Speaker Change #108: In the past few years, we had a hard time trying to get rid of all the problems that we had in the past few years.
Speaker Change #109: 24 years ago, Kapak, Mingyuan, Diyu, 23 years old. In the end, there was no rush in the past, but it was a very difficult time to talk about.
Speaker Change #109: This is Stanley, I will take you a second question. Regarding the impacts, according to the medical of the company, we are making prudent control and the management of the pace of our investment and expenses.
Speaker Change #110: is currently starting last year. We have already started such management by postponing certain projects or even concerning some projects. So, overall speaking, the R&D or the KRAPACS in the year of 2024 will be significant lower than that in 2023.
Speaker Change #110: As for 2025, as we haven't started budgeting for the next year, we don't have up your picture over that, but we believe that the overall expansion entity will be similar to this year. Thank you.
Speaker Change #110: [inaudible]
William Li: For the much longer time as new brand targets, premium segments priced over 300,000 RMB, as we are going to launch new products and also do facades and upgrades on the products, we believe that in the battery electric vehicle segment, realizing a monthly volume of around 30 to 40,000 units is a reasonable target and the volume. Also, for the new brand, our long-term operational target is to realize a monthly volume of 40,000 units at a vehicle margin of 25%.
Speaker Change #111: One week after the three weeks, the second week of the 5,000-7 days, our human body, including the human body, the human body, the human body, the human body.
Speaker Change #112: is the first important part of the story.
Speaker Change #113: and I think it's a little bit more difficult than I thought.
Speaker Change #114: How can I be a woman?
Speaker Change #114: Uh...
Speaker Change #115: 22 years old, actually it's been three or four years.
Speaker Change #116: is the same as before. So from the beginning, we also had a look at the way of seeing the traditional and traditional history. In this way, we had a look at the history of the traditional and traditional culture. So from the perspective of the second generation, we had to look at the history of the traditional and traditional culture.
Speaker Change #117: As for the increase in the SGMA expenses in Q2, it's mainly contributed to two reasons. The first is that in Q1, we delivered around the 37 units and in Q2, we delivered a total of the 50,000,000 units.
Speaker Change #118: the increase of our self-servant naturally drives, drive, drive up the staff cost.
Ming Li: Ming Li, because the team side has scrolling and also the incentives for the South Force has increased as well.
William Li: As for the AMO brand, it faces a much larger market with a total car park of more than 18 million. In that case, leveraging our battery as a service, as well as our well-established charging and swapping network, would believe that the AMO's products will be competitive, even against the competition with p-hive,[inaudible][inaudible] to the user.
Ming Li: and the second reason is that in 2021, in the first half of this year, we have launched our model year physics and many of the new products were launched in.
Ming Li: Around the May and around March and April, in that case we have also started a series of communications and marketing campaigns, relevant to our model-year products that has also increased the expenses from Q1.
Gina: Thank you, Gina.
Gina: Thank you so much. Can I have a very quick follow-up? So in terms of envelope store, do you have the average store rental cost versus a meal store? And also, how many employees do you plan to deploy in the envelope store versus that of a meal store? Thank you.
Speaker Change #121: Episode 2
Speaker Change #122: and I have a question for you.
Speaker Change #123: is a very fast and high-tech project.
Speaker Change #124: So, from a building, this building, our building, the Kapak building.
Kang Kang: and Kang Kang, the manager of Zhu Jing.
Kang Kang: is the most important thing in the world.
Speaker Change #126: Therefore, specifically, each location, including malls and city store locations, is different, so it's not possible to speak in detail. But generally speaking, the rental cost per unit is lower than NIO's.
Speaker Change #127: Episode 2
Speaker Change #128: Regarding the opening of almost doors, we actually require the team to open up the doors in the quick and efficient manner. So in terms of the context as well as the rent, also a single almost door, it is significantly lower than that of a new store. But we don't have the specific numbers for comparison as the actual expenses may be quite different depending on the location and the type of the store. But overall the expenses lower, significantly lower than that of new.
Speaker Change #128: [inaudible]
Speaker Change #129: and I will show you a special performance of the Zhang Xiu Feiyong, which is also a very popular performance. The performance of the Zhang Xiu Feiyong is about 100,000 yuan per year.
Speaker Change #129: and the other side of this building is the building that we will be able to build, so we will be able to build, and then we will be able to build the building of this tower.
Speaker Change #130: and the director of the National Security Council, and the director of the National Security Council, so we will use the best way to help us get to the public.
Speaker Change #131: and in terms of the renovations fee for each of the almost door we actually have a very strict requirement.
Speaker Change #131: for the almost, for the existing 100, almost worth, we have just to open.
Speaker Change #132: for each store, the renovations, see, was no more than 1,000,000 RMB. And for the following 100 stores, we're going to open by the end of the year. We will have even more strict requirements.
Speaker Change #132: Renovation.
Speaker Change #132: With that, we will be able to make free use of the existing resources and to renovate the store in a more efficient manner. In terms of the team sites for each of the store, it depends on the actual number of orders and the deliveries we plan for each store in each city. But in general, we will make sure that the team is also set up in the most efficient and compact way.
Speaker Change #132: I'm very happy to see William and Stanley
Speaker Change #133: Thank you, Tina.
Speaker Change #134: Thank you, your next question comes from your counting from HSBC. Please go ahead.
Speaker Change #135: Here I've got two questions. First, it's about autonomous driving, progress, and second, it's about market and competition dynamics.
Speaker Change #136: First question, could you share the Neo-NLP progress?
Speaker Change #137: especially because you break down in terms of the consumer take rate.
Speaker Change #138: I would disengagement rate, scenario coverage, the original expansion, these aspects.
Speaker Change #139: and the second question is to ask, again, the backdrop of, in the premium EV segment that's a couple of new models coming, especially in the coming months, to the end of the year, and also we notice that the high tier city versus the low tier city, the consumer consumption, is sliding in general and also than the low tier city. So, could you help us to get comfortable in a conviction on Neo and Engos portfolio product technology, and serve as an expansion, could counter these macro headwinds, and still book grows, quote-unquote, a perspective, maybe, in the aspect of channel order, momentum, and latest accounts.
Schumann Fui: and Schumann Fui back. Thank you.
Speaker Change #141: Thank you, thank you, Chen.
Speaker Change #142: We're on this trip, we're on a good day.
Saman Zai: and Saman Zai, who is a very serious person. We believe that we may be in the first place. We believe that we will be able to take part in the process of our own business.
William Li: The third question is related to the user. [inaudible] If we talk about the LCK, we can see that after the game is over, it's the same as in the 15th round of the game. Now, in the 4th round of the game, we also have some web marketing. In the 4th round of the game, we have enough technology. But for example, we think that there is a chance that we can make a 15th round of the game, because this car is from a design for a fashion, a design for course, and so on.
Speaker Change #144: We are both a標pe, but we are in the North Korean Peninsula, which is a very interesting story.
Speaker Change #145: and the Chinese Communist Party in China, which is now in China.
Speaker Change #146: Thank you for your question. We also noticed the fierce competition in the area of the smart driving, yet we are also confident that Neil is among the top players in this area.
Speaker Change #147: Regarding an OP plus, it is now being used by more than 300,000 users as it is now offered as a standard feature on our NT-2 project.
Speaker Change #147: In a meantime, the cumulative knowledge driven with NLP and NLP plus has reached.
Speaker Change #147: or has surpassed the 1.1 billion kilometers.
Speaker Change #147: In terms of the user base, as well as the total mileage, driven with the functionality, we are also a top player in time.
Speaker Change #148: First of all, what kind of business is the relationship between China and China and China?
Speaker Change #149: I think the first thing we can do is to make our A-B as a whole.
Speaker Change #150: We can see that it has a significant improvement in performance. Compared to the traditional AEB method, the scenarios it covers have increased by 6.7 times. Indeed, its capability is very strong.
William Li: But in the same time, in the same time, this car has a very good traditional power. [inaudible] Over speaking, we don't think production capacity will be a bottleneck for us, especially it will not be a long-term bottleneck for us. Here in China, the production capacity and capabilities of vehicles and the parts are quite competent. Maybe some companies will face short-term disturbance in their capacity and supply yet for long-term it will not be a bottleneck. Especially last year, we have obtained the independent manufacturing qualification. This has also laid off foundation for our long-term stable capacity.
Speaker Change #151: Today, we're going to make a video about our plan. Because the plan you can do, the plan is very important.
Speaker Change #152: So, we came from the first place in the world.
Speaker Change #153: We are going to talk about the AX2, which is the first time in the world, or the first time in the world, and the first time in the world, we are going to talk about the AX2.
Speaker Change #153: So this time, we will be looking forward to the future of the new generation.
Xiao Fang: from my mother, Xiao Fang, I have been talking about this, we are very impressed, we have used a lot of things to do with it, and it is very good. Now, if you look at it,
Xiao Fang: [inaudible]
Speaker Change #155: So, in the first place, we had a great time with our expectations and expectations. We also needed to make a real goal. But from the perspective of Anxion, we have to look at it and see what Anxion is doing.
Speaker Change #156: Episode 2
Speaker Change #157: Regarding the technology roadmap, right now inside of the industry, many players are converging their technology solutions and the roadmap into end-to-end model. Beat Kaftla were other players in China.
Speaker Change #157: For Neil, we are also working on our ends-to-end model and we have already released our first ends-to-end based.
Speaker Change #158: Fitor, that is M2 and AEB, its performance has been significantly improved than the traditional AEB functionality, as its scenario coverage is 6.7 times better than the traditional AEB.
Speaker Change #159: and in the meantime at the new in we have also released our end-to-end architecture based on the new world model. It has ended to end-to-end use and architecture, but it's...
Speaker Change #159: Foundation Technology is also very important, and we are the first company to develop and announce the such word model and the end-to-end architecture based on the model. We have also released the NAD Arc 2.0, so the end-to-end model will be based on
Speaker Change #159: The N-20 architecture will be based on a new world model, or you can see that the new world model is developed with the N-20 architecture solution. Almost thinking will believe that we are still leading the block in terms of the smart driving technologies.
Speaker Change #160: We have already tested the latest functionality on ADRQ at the small scale and its performance is pretty impressive.
Speaker Change #160: Overse speaking with WordModel and the end-to-end architecture, we will be able to realize.
Speaker Change #161: Quick Curb, Functionality, Eto-Ration, better experience at a lower cost.
Speaker Change #162: In terms of the album, its project will come with a single arranged.
Speaker Change #163: with Pure Revision Technology Solutions. But even with that, it has realized that very good performance in the urban driving scenario. The other day, I have tested the functionality in Shanghai, and it's also pretty good. So, over speaking, we believe that, and we also saw facts.
Speaker Change #163: and the Smart Driving Functionalities will help users improve the safety of driving in terms of the actual usability of the functionality we will also keep working on that.
Speaker Change #164: and the second question is, Guan Yu is his real father.
Speaker Change #164: [inaudible]
Speaker Change #165: But if we look at Gao Danshi Chang, we know that all of us are very close to our relationship.
Stanley Qu: This is Stanley, I will take your second question. Regarding the car packs, according to the set-up of the company, we are making prudent control and management of the pace of our investment and expenses. Especially starting last year, we have already started such management by postponing certain projects or even canceling some projects.
Speaker Change #165: [inaudible]
Speaker Change #165: [inaudible]
Stanley Qu: So, over speaking, the car packs in the year of 2024 will be significantly lower than that in 2023. As for 2025, as we haven't started budgeting for the next year, we don't have a clear picture but we believe that the overall expansion density will be similar to this year. Thank you. As for the increase in the S-GNA expenses in Q2, it is mainly contributed to two reasons. The first is that in Q1, we delivered around the 37 units and in Q2, we delivered a total of more than 57,000 units.
Speaker Change #165: [inaudible]
Speaker Change #165: [inaudible]
Speaker Change #165: [inaudible]
Speaker Change #165: is a very common place. In our environment, the memory is connected to the memory. In our memory, the memory is connected to the memory of the memory. There is a service and community.
Speaker Change #166: So, we have a high-end market, which is a very high-end market. But in fact, we hope they will be here because we need to do the first step.
Speaker Change #167: We're regarding your second question. We also understand the intensity of the market computation and this is not the first time for us to face such fierce competition.
Neil Brand: Yet, Neil has a new brand has been utilizing a pretty stable market share in the premium segments for years. This is mainly because we have a diversified and rich product portfolio to offer for the premium segment. We have 85, 5T, ES6, ES6, 87, ES7, plus ES8. So it's a pretty wide range of a product offering that will be enough to cover many product segments.
Stanley Qu: The increase of our sales volume naturally drove up the staff cost, mainly because the teamfights have scrolling and also the incentives for the sales force have increased as well. And the second reason is that in 2020, in the first half of this year, we have launched our model year physics and many of the new projects were launched in around the May and around March and April. In that case, we have also started a series of communications on the marketing campaigns relevant to our model year projects that has also increased the relevant expenses from Q1. Thank you, Tina. Thank you so much.
Neil Brand: and the many of this products are also leading the south volume in their respective PV products segment.
Neil Brand: Not to mention that for some misch products like 85p, E.C. 7 or E.C. 6, in their respective segments, their world-ownness even higher than some of the I.C.E. competitors.
Neil Brand: So over speaking, we have made a quite successful product portfolio and offering strategy.
Speaker Change #169: Floss, we also have other advantages, such as charging and swapping network, leading technologies, good product experience, service and the user community. This has further enhanced and solidified our foothold in the premium segment.
Tina Hou: Can I have a very quick follow-up? So in terms of Onvostore, do you have the average store rental cost versus a NIO store and also how many employees do you plan to deploy in an Onvostore versus that of a NIO store? Thank you. So in terms of the open store, we actually have a relatively fast and high-quality standard. So from a single store's investment, including our single store's capital investment and just now,[inaudible] So we require the team to open up the stores in a quick and efficient manner.
Speaker Change #169: Of course, in the meantime, we also hope that more players can also come into this segment so that we can work with them together to enlarge the site of this premium segment.
Speaker Change #170: for M&B Disagmat.
Speaker Change #171: But the whole company is very interested in the market, the first thing we can do is to bring a big deal to the market. So, in the future, we will have a big deal.
Speaker Change #171: [inaudible]
Speaker Change #171: We will be able to reach 70,000 people in the world. So, we will not be able to try our best to be our main team.
Speaker Change #171: [inaudible]
Speaker Change #171: Zhang said that we are going to the country. We have been in the world for about 30 years. Now, you and the young people are going to be together.
Tina Hou: So in terms of the capax as well as the rent of a single onvostore, it is significantly lower than that of a NIO store. But we don't have the specific numbers for comparison as the actual expenses may be quite different depending on the locations and the type of the store. And overall the expense is lower, significantly lower than that of NIO. [inaudible] Thank you, Tina Hou. Thank you.
Speaker Change #171: We have been through the process of creating a new world.
Speaker Change #171: [inaudible]
Speaker Change #172: In the meantime, for the entire new company, we actually have a pretty clear and straightforward strategy for the continuous business growth.
Speaker Change #172: the first is by a wider price range. From next year we're going to have a three-bent in the markets.
Speaker Change #172: with battery, our price range, the price range that can be covered by this true blend will be as white.
Speaker Change #172: Woke to pretty wide, ranging from 140,000, all the way to 800,000 R&B. And with that rest of service, the price range will be from 100,000 to 700,000, which will be at a strong competition to the ICC costs in the respective segments.
Speaker Change #172: with three brands with a wide press range, we will be able to reach a broader market at that many of our other competitors.
Speaker Change #172: The second approach is the via our products, white product range. We have a three brand, we also have a very diversified product portfolio of each brand. In that case, we will be able to cover a pretty comprehensive product segment.
Speaker Change #172: with clear differentiation between each brand.
Speaker Change #172: and the third approach is through the markets and the regional coverage. Right now we are expanding our point of self into the lower tier cities, especially for Neil at the moment, most of ourselves are in the first and second tier cities. So such coverage expansion is also very important.
Speaker Change #173: We have also announced other plans like the Power App Plan where we will expand our charging and flopping network to the companies at all levels.
Speaker Change #173: with that, it will help us to further enhance the rich of author-brand. Plus, we also have the business development plan for the overseas market.
Yuqian Ding: Your next question comes from Yuqian Ding from HSBC. Please go ahead.
Speaker Change #173: So, over 18, for the long-term growth and development, we have a clear roadmap that is via wide-press range, wide-product range, and also border-regional coverage.
Yuqian Ding: Thank you, first question, could you share the NIO NLP progress, especially could you break down in terms of the consumer take rate, our disengagement rate, scenario coverage, the original expansion, this aspect, and the second question is to ask against the backdrop of in the premium EV segment, there's a couple of new models coming, especially in the in the coming months to the end of the year, and also we notice that the high tier city versus the low tier city, the consumer consumption is sliding in general and more so than the low tier city, so could you help us to get comfortable in a conviction on NIO and on both portfolio product technology and service expansion, could encounter these macro headwinds and steelbook growth, quote unquote perspective, maybe in an aspect of channel order momentum and latest consumer feedback. Thank you.
Speaker Change #174: Awesome, thank you.
Speaker Change #175: Thank you.
Speaker Change #175: Thank you, your next question comes from Paul Gong from UBS, please go ahead.
Paul Gong: are thanks for taking my questions. Two questions here. The first one is regarding the flagship C.D. I think it was launched to schedule for lunch in Q1 next year. It is still on schedule and can give some...
Speaker Change #177: Updates regarding this model in terms of the position in real technology adoption, as well as say the target.
William Li: and William Li, the second question is regarding the overseas expansion, you are going to open the store in your year and start the delivery in the year.
Speaker Change #178: Is it?
Speaker Change #179: Is it a signal of the change of that direction as a result of the EU power wave that you are switching the direction from European to Middle East? Also, one of your peers has now been delivering over 10% of their volume into the overseas market. Do you think this serves as a benchmark for your overseas expansion over the next one or two years?
Paul Gong: Thank you, Paul.
Paul Gong: The first day, we still have a chance to be with our CEO Li at the time.
Speaker Change #180: I have used a lot of new things, but I remember a lot of new things, and I remember a lot of new things, and I remember a lot of new things, and I remember
Speaker Change #180: from the FAS, with the help of me to use our Chinese and the Xinjiang home in Zeng Ge.
Speaker Change #181: and I'm very happy to be here. So, I'm very happy to be here.
Speaker Change #182: This time we will be very close to Wei Fei Tang.
Yuqian Ding: Thank you for your question. We also noticed the fierce competition in the area of the smart driving, yet we are also confident that NIO is among the top players in this area. Regarding NLP plus, it is now being used by more than 300,000 users as it is now offered as a standard feature on our NG2 project. In the meantime, the cumulative knowledge driven with NLP and NLP plus has reached or has surpassed 1.1 billion kilometers. So in terms of the user base as well as the total knowledge driven with the functionality, we are also a top player in China.
Speaker Change #182: Fei Tang, the host of this series, is the head of his business.
Speaker Change #183: and the second is the black, black, but there is no way we can't imagine it, because...
Speaker Change #184: I want to see the whole country's nationality of Europe, which will be destroyed. In fact, we are still in China, and we are still in China, and we are still in China.
Wu: Wu, this is our good. We, we, we, we, we, we, we, we, we, we, we, [inaudible]
Speaker Change #186: He is a very calm world.
Speaker Change #186: [inaudible]
William Li: We are now starting to move on to this model. The first model that we are currently moving on to is the safety of our A1B. We can see that in this performance, there is a possibility that it will be able to improve its performance in the future.
Speaker Change #186: and the three of us are the three of us, so it's also our plan, so we will continue to continue to continue to continue our journey to the future.
Speaker Change #186: I don't want to be on the other side of the stage. We will be able to see the stage with the five-fly stage.
Speaker Change #186: So in this case, there are five lines, so we have a total of four lines, so we will continue to continue to continue to continue to continue to continue to continue to continue
William Li: In today's video, we are going to talk about the model of World Model. The model of World Model is a kind of method, but the mechanism of the model is very important. So we are going to talk about the first model of World Model. We are going to take the R2 model of World Model. We are going to talk about the model of World Model. [inaudible] In terms of the on-world brand, its product will come with a single or rain with pure vision technology solution.
Speaker Change #187: We will discuss about the situation in the future.
Speaker Change #188: Thank you for the question regarding the first question on the ETII, where is your proceeding? The ETII lounge preparation according to the plan and we haven't made any changes on the SUD of this project.
Speaker Change #189: But in the meantime, as you know that the 89 is equipped with many new technologies, including fear by wire, fully active suspension, enhanced development of the chip as well as SkyOS. So we will need to spare no efforts in making sure and preparing for the successful launch of this product next year.
Speaker Change #189: Regarding your second question on our international expansion, we haven't changed our direction.
Speaker Change #190: Yes, because of the tariffs in Europe, now selling, we're exporting cars from China to Europe becomes more expensive. So we will set this on the existing five European markets that we have already started. We also know that to establish meals such a premium brand.
Speaker Change #190: in the European market will also take a longer time and we are very patient with that. But in the meantime, it doesn't mean that we have stopped our activities there. Earlier this year, we have just opened our Neil House in Amsterdam and we are still installing and deploying our policy observations in Europe, so we will still keep the same plan.
Speaker Change #190: In terms of the market entry into UAE, as you may know that last year we have received a 3 billion US dollar strategic investment from the Abu Dhabi government and...
Speaker Change #190: Then the market entry into UAE's part of the plan, with that we will work with our strategic partners in UAE to offer our products and services to the local markets.
Speaker Change #190: Starting next year, a big difference is that we not only have a new brand and products, but also products from Omo and the Firefly, which are more suitable for the global market.
Speaker Change #190: with that, we will be actually more anxious with our international expansion. But in the meantime, we will also need to keep a good balance between our investment scale and the efficiency. To make sure that we enter into the global markets in a smarter and more efficient.
Li: Li, thank you.
Li: Thank you, that's for thank you, Paul.
Speaker Change #192: Thank you, your next question comes from Mingsen Li from Bank of America, please go ahead.
Speaker Change #192: Hello, I'm William Stanley. I also had two questions. So my first question is more related to the overall macro. So your view of what is the potential of growth rates for the China and the market in the next few years. Because I think it's recently some.
Speaker Change #193: Investors expect that the UD penetration will still down because right now the UD penetration is already very high. So just a, you know, you give you the UD penetration even next to the UD years.
Speaker Change #193: is my first question. And my second question is regarding the firefly pipeline. So Rai Nau will you launch one or two models in 2020-25 for firefly? Yeah, thank you. That's my two questions.
William Li: But even with that, it has realized that very good performance in the urban driving scenario. The other days, I have tested the functionality in Shanghai and it's also pretty good. So over speaking, we believe that and we also saw facts that the smart driving functionalities will help users improve the safety of driving. In terms of the actual usability of the functionality, we will also keep working on that. In terms of the price of the product, it is very good.
Speaker Change #193: Episode 2
Speaker Change #194: Thank you. We have seen the Pezun-Dio-Vey Pro's market. It's been a year.
Speaker Change #195: Liu is a true man, he is a man, he is a man, he is a man, he is a man.
Speaker Change #196: But we see its growth is undoubtedly, in the long term, we believe it actually, if we look at the number of cars in China, it has already reached 320 million to 330 million vehicles.
Speaker Change #196: [inaudible]
William Li: If we look at it, whether it is from ET5, ET5, ESC, ET7, ET7, ESC7, ES8, we are in the western world. We have already covered enough of the western world. In the western world, all of us are in the first place. In the western world, all of us are in the leading position.
Speaker Change #196: and Wei Wei, this is the first time I've been out for 5 years now.
William Li: [inaudible] So, overall speaking, we have made a quite successful product portfolio and offering strategy. Plus, we also have other advantages, such as charging and swapping network, leading technologies, good product experience service and the user community. This has further enhanced and solidified our foothold in the premium segment.
Speaker Change #197: I think this is the most important thing to do with this process. It's not just from the BV or the PHEV, but also from the other team. It's actually a 50-year-old. It's also very fast.
Speaker Change #197: If we look at Norway, it's actually a very fast, 80-90% of the population.
Speaker Change #198: So, I think it's been about two years since the beginning of the war, and the English, the Chinese people will take over the 80% of the war.
Speaker Change #198: [inaudible]
Speaker Change #199: Thank you for the question. If you look at the overall passenger vehicle market, in the first half of this year, it has increased by around the 3.6%. For the longer term, if you actually look at the total...
Speaker Change #200: P.V. Population in China, it's F-Bake F-2230 million units.
Speaker Change #200: So it's already a very significant amount, definitely it will keep growing but probably not a very significant growth rate. And it's even normal for the PV segment or PV market to suffer slight decrease. But even with that, the Chinese market will still be the largest passenger vehicle market in the world.
Speaker Change #200: In terms of the penetration rate of the new energy vehicle, it has already surpassed a safety percent and I think that it will continue to increase.
Speaker Change #200: and at a even foster manner.
Speaker Change #201: because for the replacement of the ICCross speed 5BVs or P-Hive, it will be much faster when it has surpassed the 50% keeping point. We can take no way as a reference or example. It actually, at 50% of the transition rate at first and then it has quickly increased to 80 and the 90%.
Speaker Change #201: So similarly for China, I believe that in two to three years, the penetration rate of new energy vehicles among new vehicles will surpass 80%.
Speaker Change #201: Yes, that's why I'm talking about ICE.
William Li: Of course, in the meantime, we also hope that more players can also come into this segment so that we can work with them together to enlarge the site of this premium segment. [inaudible] of Congress.
Speaker Change #201: He is the first to start a new project. Because they can become the most valuable project. The project of Li is very large. Not only is it a premium brand, but it is also a market brand. Not only is it a Chinese brand or a national brand.
Unknown Executive: Thank you.
Speaker Change #202: So this is the next question, will you be strong?
Speaker Change #203: will open his gold-thousand gold-thousand gold.
Speaker Change #203: It will damage its brand, including the residual value of used cars. So in fact, ICE cars in China have now entered what I see as an accelerating downward cycle. If we look at it now, for example, it might be...
Speaker Change #204: Hongdae, Hongdae, is now at the same time, and Hongdae is still a part of the work. They are now in the city of Chongfu, which is now in the city of Hongdae. They are now in the city of Chongfu. They are now in the city of Chongfu.
Speaker Change #205: So, I thought that this year, the Chinese government will be very close to the Chinese government.
Speaker Change #206: and the Ministry of Foreign Affairs will also give you an example of an individual, such as the Chinese Communist Party, or the Chinese Communist Party.
Speaker Change #206: [inaudible]
Speaker Change #207: If we look at the ICE class in China, actually, if they have entered into a unsustainable cycle or a vicious cycle, because many ICE brands have to profit their prices to keep their market sure. Be it premium brands, or mass market brands, be it brands from China, or from other countries.
Speaker Change #207: Many of this ICC costs are having a price-slashed for the sake of a market share. But as the cut prices, it also hurts the profit and interest of their dealers. Hurt the image of the brand as well as the residual value of their products.
Speaker Change #207: with that, it is even more difficult for them to keep a very strong market share in your segments.
Speaker Change #208: So, the decline of their market share is even faster than issued be. For the recent years, we have already witnessed the significant decline of the market shares of a Korean brand, like...
Speaker Change #209: from that he including Ford and the General Motors and the Ford-The-Risland-Earers, Japanese Grands
Speaker Change #210: Tao Yudah, Hongdae and Nishang are also entering the same space.
Speaker Change #210: So, in general, we believe that the IC Cross Farm in this joint venture brand will face difficulties in the future competition. And when they lose the market share, they normally lose market share to other new energy, decode brands, including brands from China and Europe. So, in that regard, I believe that the penetration rate of the new energy vehicle will grow at a pretty quick pace, even faster than we expected.
Speaker Change #211: The second question is, are we going to call for a call for the next five years? So we are going to call for a call for the next five years.
Speaker Change #212: And regarding your second question, yes, we are going to deliver the product from a firefly from 2025. We are in smooth progress with our product preparation.
Speaker Change #212: Yes.
Speaker Change #213: Thank you. Thank you.
Speaker Change #214: Thank you, your next question comes from changing from CICC. Please go ahead.
Speaker Change #215: Thank you both for taking my questions. I have a two question. The first is regard to our...
Speaker Change #216: New operating system, Skydoll asked Rui Chen's release in July.
Speaker Change #217: has shown a very comprehensive and deep death.
Paul Gong: Your next question comes from Paul Gong from UBS. Please go ahead. Hi, William. Thanks for taking my questions. Two questions here. The first one is regarding the flagship sedan E-T9. I think it was launched to schedule for launch in Q1 next year.
Speaker Change #218: and our software, software development of the energy, so it can use just interviews.
Speaker Change #219: and asked more details of what would happen technical challenges.
William Li: Is it still on schedule and can give some updates regarding this model in terms of the position in real technology adoption as well as say the target volume outlook. The second question is regarding the overseas expansion. You are going to open the store in UAE and start delivering there. Is it a signal of the change of that direction as a result of the EU tariff that you are switching the direction from Europe into Middle East?
Speaker Change #220: We have faced and worked a long-hageous and also improvement of our products can be brought by the new system.
Speaker Change #221: So, this is the first question. The second is, we regard to the other, the other income of the wrong story margin. We have seen the second, in the second quarter, the wrong story margin has increased significantly.
Speaker Change #222: So, how to understand if major programmers.
William Li: Also, one of your peers has nowadays been delivering over 10% of their volume into the overseas market. Do you think this serves as a benchmark for your overseas expansion over the next one or two years? Thank you. We are going to use our new brand and our new exhaust system. So our new technology is very much. We are sure that we will be very, very careful to ensure that it is successful.
Speaker Change #222: and also was our forecast authority trend and continuity of the margin improvement in the future. So, also, we have a group of ourselves volumes.
Speaker Change #223: Can we see that our target, especially at target end, that the result of the next can turn to profit in future.
Speaker Change #223: Hello, this is Tang Jing. We are the first and most important group in the world.
Speaker Change #224: This is his two-year-old, but it is also his grandmother. Because in the past few days, we didn't know that we could not use the money. This is the whole process of a foreign country. This is the whole process of a foreign country.
Speaker Change #225: So, let's go to the house, let's go to the house.
Speaker Change #225: [inaudible]
Speaker Change #226: MCU, one day, the COVID is in the middle of the day. We have been working for a long time, and we have been working for two months. We have been working for a long time. This is the most important thing.
William Li: The second is the overseas expansion. There is no change in the direction of the EU tariff. In fact, this year, we are still in the 5 countries to make our service better. We are sure that it is a very common thing to see a new brand in the EU. But we can also see that this year we have opened up our new exhaust system. In Europe, we are still in the[inaudible] U.S. We are still in the U.S. Thank you for the question.
Speaker Change #226: What is it? It's a...
Speaker Change #226: Zhang, the director of the film, is the director of the film.
Speaker Change #227: and I'm going to tell you a little bit more about the situation.
Speaker Change #227: We'll start with the next one, we'll be more successful, and we'll be more successful in the future.
Speaker Change #228: He thinks that we are in the same position as the one who has the most important role in the world, and the role of the Chinese and the other.
Speaker Change #228: and I have a late answer to the one that you read down in this one.
Speaker Change #229: I think it's a lot of questions. Because these questions, if you don't have a foundation, you can do it. This is our opinion.
Speaker Change #229: Fei Tang, Fei Tang, Fei Tang.
Speaker Change #229: Gao Qing, we are finally here.
Speaker Change #229: and then we will be able to do this in the future.
Speaker Change #229: [inaudible]
Chen Xi: Chen Xi's car,包括 Mufai Fly.
Chen Xi: So, we'll talk about the secret of our lives, and we'll be talking about the whole group of people's lives.
Chen Xi: Lanternet issue.
Speaker Change #231: Thank you for the question regarding SkyOS, it's the world's first food-alming vehicle operating system that is the special thing with SkyOS, which is also the difficulty of the challenge we have faced when developing the SkyOS.
William Li: Regarding the first question on the ET9, we're still proceeding the ET9 launch preparation according to the plan and we haven't made any changes on the SOD of this project. But in the meantime, as you know, that the ET9 is equipped with many new technologies, including sear by wire, fully active suspension, greenhouse develops the chip as well as SkyOS. So we will need to bear no efforts in making sure and preparing for the successful launch of this project next year.
Speaker Change #232: Because when comes to the era of the market electric vehicles, we cannot use the fragmented operating systems to manage the electric architecture of the car anymore. With that, we have developed the SkyOS. It comes at a three-levels.
Speaker Change #232: At the bottom, we have this iOS H that is the hypervisor and in the middle, we have four kernels.
Speaker Change #232: for the Sky West, and on the top we have the Sky West of Mado Ware. So it's a very comprehensive solution we have developed.
Speaker Change #233: We've used the four years with 20,000 person mouth.
William Li: Regarding your second question on our international expansion, we haven't changed our direction. Yes, because of the tariffs in Europe now selling or exporting costs from China to Europe becomes more expensive. So we will also know that to establish NIO such a premium brand in the European market will also take a longer time and we are very patient with that. But in the meantime, it doesn't mean that we have stopped our activities there. Earlier this year, we have just opened our new house in Amsterdam and we are still installing and deploying our power supply stations in Europe. So we will still keep the same plan.
Speaker Change #233: with this great work. In terms of its benefits, the SkyOS is definitely making the car safer and the more secure. It also makes the system stable and it also helps us to realize more efficient R&D process and iteration process.
Speaker Change #233: is also help us solve the problems faced by the smart electric vehicles like huge data throughput, a domain field cost domain fusion and also the latency along the communications.
Speaker Change #234: Because we know that it's impossible to realize such a benefit.
Speaker Change #235: by simply working on the application they year adaptation. We need to do something as it's a foundational level. And we are very happy that we have made it happen.
William Li: In terms of the market entry into UAE, as you may know that last year, we have received a $3 billion strategic investment from the Abu Dhabi government and then the market entry into UAE is part of the plan. With that, we will work with our strategic partners in UAE to offer our products and services to the local market. Starting next year, a big difference is that we not only have new brand and products, but also products from AMO and the Fairfly, which are more suitable for the global market.
Speaker Change #236: The Sky West will be applied to our also brands, including Neil Anwo and the Firefly. We can say that the Sky West is a software connoisseur for our future products and development.
Speaker Change #237: and the company of the Kishen Group, which is currently in the second team, who has been using the same price for the company, and we are also able to find out the number of questions about the Kishen Group.
Speaker Change #237: and I will say goodbye to you, Rui Chen.
William Li: With that, we will be actually more active with our international expansion. But in the meantime, we will also need to keep a good balance between our investment skill and the efficiency to make sure that we enter into the global market in a smarter and more efficient way. Thank you. That's a good power. Thank you.
Speaker Change #237: [inaudible]
Speaker Change #238: in this version of the famous Changpilian.
Speaker Change #239: We have done a lot of small things.
Speaker Change #240: He helped us to go.
Speaker Change #240: and we will continue to be in the next episode.
William Li: and William Li.
Lin Wei: Lin Wei, who is the one who is in the middle of the year and the whole world and the whole world.
Mingson Lee: Your next question comes from Mingson Lee from Bank of America. Please go ahead.
Lin Wei: is the one who is in charge of the life of the human being.
William Li: Hello, I'm William Stanley. I also have two questions. So my first question is that it's more related to the overall macro. So in your view, what is the potential growth rate for the China EV market in the next few years? Because I think recently some investors expect that the EV penetration will still go down because right now the EV penetration is already very high. So yeah, just to give you what is the EV penetration in the next three years. Yeah, this is my first question.
Lin Wei: and the two of us are in the same position as the two of us are in the same position as the two of us.
Lin Wei: is a very large number of people. And we believe that we can make the most of the most of the lives of the people in the world. This is a very beautiful and beautiful place I think it will be very good.
William Li: And my second question is regarding the firefly pipeline. So right now where you launch one or two models in 2020-25 for firefly, thank you. That's my two questions. Thank you, Min. If we look at the global market, this year, 1-6th of June, the growth rate is 3.6%, this year is over 100,000, but we see that the growth rate is very high, we think that if we look at the Chinese market, it is already 3,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,[inaudible]000,000, So this price will greatly increase the ability of the engine power of the engine, and will increase its performance, including this two-wheel-drive vehicle.
Speaker Change #242: Regarding the revenue, we're the loss on other cells in Q2. We have significant to narrow the losses on other cells in Q2. It's a minute because of the two reasons. I think Q2, we have improved or increased our user deliveries with that.
Speaker Change #243: Well, actually, there are two reasons. The first is that we have improved the profitability and the efficiency of our up-to-market sales.
Speaker Change #244: Earlier this year, on February 20th, we have released the 2024 Warfare Service Policy.
Speaker Change #244: with the new policy over after self-services become more efficient and also more profitable. And, secondly, we have also decoupled the lifetime free power swap from the south of the vehicles.
Speaker Change #244: With that, one more user, especially new users, have to pay for the power swap services. This has also helped us improve the revenues and the margin. On the power swap related services.
Wu: Wu, we have the significant being narrows of the losses.
Wu: and other cells. And we believe that in the future, as we continue to grow the total user-based and the cell problem, especially with the launch and delivery of the unlock products.
Wu: The profitability of the other cells will also become stronger and we look forward to the brick even more even the profit from this part.
Speaker Change #245: and the young people of the world.
Speaker Change #245: [inaudible]
Speaker Change #246: We can't wait to see you again.
Speaker Change #246: Let's move forward.
Anjiao: Anjiao, the mother of William Li, has already taken over two thousand five hundred dollars in China.
Speaker Change #248: and then we're going to talk about the past 30 to 40 days ago. So, we can see the past 40 to 60 days ago. Actually, we've seen the past 30 days ago. It's not too big for a long time.
Speaker Change #249: Why do you say that Wei Feng is in a hurry to talk to you about the situation? The situation in the environment is a bit difficult.
Speaker Change #249: I think the first time we were able to take a look at the situation in the US, and to use the CCP's face to make a choice, and to make a choice, to bring back some of the difficulties in the environment.
Speaker Change #250: and the second one is our grandfather.
Speaker Change #250: from the past two years, the Chinese people's lives are the ones who are in charge of the war, and the people who are in charge of the war are very big.
Speaker Change #250: So, we are very close to our relationship. So, this is because we will also give us some kind of crisis.
Speaker Change #250: So, finally, we will talk about the situation, but we will see the situation in the future. Actually, we have experienced a lot of difficult times, but it is not too far away. But it is because Wei Wei is a small hand. So, we have done a lot of challenges in the future.
Speaker Change #250: Jiang, will bring a new story to the future.
Speaker Change #251: and in terms of the profitability of the PowerSwap service or in general PowerSwap station.
Speaker Change #252: If we look at the single-slop station, if it can offer more than 60 power slots per day, it itself will, and in the meantime, it will recharge all the power slot services at the same level for the supercharging, then the single station will become, will become break even. And right now, in China, we have more than 2,000 and a 500 power slot stations and on average, each station can complete around 30 to 40 slots per day.
Speaker Change #252: So, from 30 to 40 to 60, it's not a long way to go for us to make the power of station, break even. But in the meantime, we still suffer the loss on the power of business. It's mainly because of two reasons.
William Li: So in fact, now, the ICE is currently in the Chinese mainland, and I'm going to look at a market share, a market share of a market share. If we look at it now, for example, Hengda, Hengda is currently in the country, and also in the country of Japan. All these Japanese companies, in fact, they are currently in the past few years now, or they are currently in the Chinese mainland, we see that this is also a very big problem.
Speaker Change #252: The first thing that's at the early stage for the early adopters of a new product, we have offered a free lifetime powerflops to many of this users.
Speaker Change #252: which has actually worth the burden on the cost of the power supply stations and the power of services.
Speaker Change #252: and the second week, we as we roll out our business and the network, we also came to realize that the network, in fact, of the power stop station actually has a very significant meaning to the boost of the self- volume. In that case, we are more active in installing power stop stations, even a half of the actual need.
William Li: So I think in the next few years, these Chinese companies will be very, very popular in China. In this market, they will all be able to give it to this NEV, such as these brands, whether it's China's company or the whole new company. So this NEV's growth rate will increase, will increase, will increase, will increase, will increase, will increase. If we look at the ICE costs in China, actually, they have entered into an unforeseeable cycle, or a vicious cycle, because many ICE brands have to cut their prices to keep their market share.
Speaker Change #252: So, this solicitation deploy the end of the month, also bring additional losses we're burdened to the business.
Speaker Change #252: So in general, if we look at the power supply station itself, it's not far away from breaking even and profitability yet considering its actual contribution to the south volume, we have decided to deploy a many stations in the end of the bus, and this has caused the loss on the business.
William Li: These premium brands, when we have market brands, these brands from China, where from other countries, many of these ICE costs are having a price slashed for the sake of a market share. But as they cut prices, it also hurts the profits and interest of their dealers, hurts the image of the brands, as well as the residual value of their products. With that, it is even more difficult for them to keep a very strong market share in their segments.
Speaker Change #253: Thank you for the short work, please.
Speaker Change #254: Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.
Speaker Change #255: Thank you again for joining us today. If you have further questions, please feel free to contact Meals IR team through the contact information on our website. This concludes the conference call. We will now disconnect the line. Thank you.
William Li: So the decline of their market share is even faster than it should be. For the recent years, we have already witnessed the significant decline of the market shares of a Korean brand, like Hyundai, Kia, including Ford and General Motors. And for the recent years, Japanese brands like Toyota, Honda, and Nissan are also entering the same space. So in general, we believe that the ICE costs from this to an venture brand will face quite difficulties in the future competition.
William Li: And when they lose some market shares, they normally lose market shares to other new energy vehicle brands, including brands from China and Europe. So in that regard, I believe that the penetration rate of the new energy vehicle will grow at a pretty quick pace, even faster than we expected.
William Li: Yeah, the second question is that in the next five to five to five years, we will take care of the market share. We will take care of the market share, so we can prepare for our work very smoothly. And regarding your second question, yes, we are going to deliver the product from Firefly from 2025. We are in smooth progress with our product preparation. Thank you.
Chang Jing: Your next question comes from changing from CIC. Please go ahead. Okay, thank you for taking my questions out of two questions. The first is regarding to our new operating system, Sky don't ask which has been released in July. So it has shown a very comprehensive and that our software self development ability. So they can use just to introduce and ask more details of what other technical challenges we have faced and works advantages and also the improvement of our product can be brought by the new system.
Chang Jing: So this is the first question. The second is regarding to the other other income growth property margin. We have seen the second in the second quarter, the growth property margin has improved. So how to understand these major drivers and also what our forecast for the trend and the continuity of the margin improvement in the future. So also raise our growth of our self volume can we can we see that our target especially targeting and that a response business can turn to profit. Thank you, Chang Jing.
William Li: Our SkyWise, this is the first complete, a full-scale operation system. Because this is its main point, but it is also its main point. Because Stanley's event today, we all know that it is impossible to use money. This is a full-scale operation system. So from SkyWise, we have a different MCEO, MCEO, and CALL. In the middle of the day, we are a very complete family. In the past 4-4 years, we have been working hard for more than 2,000 years.
William Li: We have been able to complete this operation. This operation is very difficult. In fact, it is from a different direction. It is more safe to drive the car, and the whole system will be more stable. The efficiency will be higher, and the efficiency will be higher in the future. In the end, we have a large number of problems, such as the latency problem, and the maintenance problem. It is a very, very difficult problem.
Speaker Change #256: and I'm going to make a video about the future of the world.
William Li: Because these problems are not made by a foundation software. In fact, this is only done in the operating process. We are not able to do it. This is also very happy that we finally have a system to come out. When we go back to SkyWise, we will support the entire car including Firefly. So, for example, it is the whole power of all the products that are coming up next. Thank you for the question.
William Li: Regarding SkyOS, it is the world's first full-domain vehicle operating system. That is the special thing with the SkyOS, which is also the difficulty with the challenge we have faced when developing the SkyOS. Because when it comes to the era of smart electric vehicles, we cannot use the fragmented operating systems to manage the electric architecture of the car anymore. With that, we have developed the SkyOS. It comes at three levels. At the bottom, we have the SkyOS H, that is the hypervisor.
William Li: In the middle, we have four kernels for the SkyOS, and on the top, we have the SkyOS middleware. So, it is a very comprehensive solution we have developed. We have used the four years with 20,000 person masks with this great work. In terms of its benefits, the SkyOS is definitely making the car safer and the more secure. It also makes the system simpler, and it also helps us to realize more efficient R&D process and iteration process.
William Li: It also helps us solve the problems faced by the smart electric vehicles, like huge data circuits, cross-domain fusion, and also the latency along the community. We know that it's impossible to realize such benefits by simply working on the application their year adaptation. We need to do something at the foundational level, and we are very happy that we have made it happen. The Sky West will be applied to our author brands, including NIO, Unwell, and Firefly. We can say that Sky West is a software commercial for our future projects and development.
William Li: Regarding the revenues or the loss on other cells in Q2, we have significantly narrowed the losses on other cells in Q2, it's a minute because of the two reasons. I think we have improved or increased our user deliveries. There are two reasons. The first is that we have improved the profitability and efficiency of our up-to-market source. Earlier this year, on February 20th, we have released the 2024 World Trade Service Policy, with the new policy our up-to-self services become more efficient and also more profitable.
William Li: And secondly, we have also decoupled the lifetime free power swap from the cells of the vehicles. With that, one more user, especially new users, have to pay for the power swap services. This has also helped us improve the revenues and the margin on the power swap related services. With that, we have the significantly narrowed the losses on the other cells. And we believe that in the future, as we continue to grow the total user base and the cell problem, especially with the launch and the delivery of the Unwell products, the profitability of the other cells will also become stronger and we look forward to the break even or even the profit from this part.
William Li: In the future, we have already surpassed 2,500 exchange prices in China. Our daily exchange rate is now equal to 30-40 per day. So you can see that from 30-40 to 40 and then the growth of 60, in fact, we understand that from the moment we see the change of the[inaudible] And in terms of the profitability of the power swap service or in general power swap stations, if we look at the single swap station, if it can offer more than 60 power slops per day, it itself will, in the meantime, we charge all the power swap services at the same level for the supercharging.
William Li: Then the single station will become, will become break even. And right now in China, we have more than 2,000 and a 500 power swap stations and on average, each station can complete around 30 to 40 swaps per day. So from 30 to 40 to 60, it's not a long way to go for us to make the power swap station break even. But in the meantime, we still suffer the loss on the power swap business.
William Li: It's mainly because of two reasons. The first is that at the early stage for the early adopters of a new project, we have offered three lifetime power slops to many of these users, which has actually worsened the burden on the cost of the power swap stations and the power swap services. And secondly, as we roll out our business and the network, we also came to realize that the network effect of the power swap station actually has a very significant meaning to the boost of the self volume.
William Li: In that case, we are more active in installing power swap stations, even a half of the actual need. So this swap station deployed in advance also brings additional losses or burden to the business. So in general, if we look at the power swap station itself, it's not far away from break even and profitability yet considering its actual contribution to the self volume, we have decided to deploy many stations in advance. And this has cost the loss on the business. Thank you. Thank you for the short work. Thank you.
Operator: 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 Neil's IR team through the contact information on our website.
Operator: This concludes the conference call.
Operator: You may now disconnect the line. Thank you. Rui Chen, NIO Inc. Sponsored ADR Class NIO Inc. Sponsored ADR Class A Rui Chen, NIO Inc. Sponsored ADR Class