Q3 2025 NIO Inc Earnings Call

November 25, 2025

Speaker #1: I will now turn the call over to your host, Mr. Rui Chen, Head of Investor Relations and Corporate Finance of the company. Please go ahead, Rui.

Rui Chen: Good morning and good evening, everyone. Welcome to NIO's Q3 2025 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website. On today's call, we have Mr. William Li, Founder, Chairman of the Board, and Chief Executive Officer, and Mr. Stanley Qu, Chief Financial Officer. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the safe harbor 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 views expressed today. Further information regarding risks and uncertainties is included in certain filings of the company with the US Securities and Exchange Commission, the Stock Exchange of Hong Kong Limited, and the Singapore Exchange Securities Trading Limited.

Speaker #2: Everyone, welcome to NIO's third quarter 2025 earnings conference call. Good morning and good evening. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website.

Speaker #2: of the board and Chief Executive Officer. And Mr. Stanley Qu, Chief Financial Officer. Before we continue, please note that any statements made under the Safe Harbor Provisions of the US Private Securities Litigation Reform Act of 1995.

Speaker #2: Forward-looking statements made by Mr. William Li, founder and chairman, involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today.

Speaker #2: Regarding risks and uncertainties, this is included in certain findings of the company with the U.S. Securities and Exchange Commission, the Stock Exchange of Hong Kong Limited, and the Singapore Exchange Securities Trading Limited.

Speaker #2: 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 call may conclude discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

Rui Chen: 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 may include discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. Please refer to NIO's press release, which contains a reconciliation of unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr. William Li. William, please go ahead.

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 may include discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. Please refer to NIO's press release, which contains a reconciliation of unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr. William Li. William, please go ahead.

Speaker #2: Please refer to NIO's press release, which contains a reconsideration of unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr. William Li.

Speaker #2: William, please go ahead.

Speaker #3: ??????????????2025????????????Hello, everyone, and thank you.

William Li: ??????????????2025????????????

Stanley Qu: Hello, everyone, and thank you for joining NIO's 2025 Q3 earnings call.

[Translator]: Hello, everyone, and thank you for joining NIO's 2025 Q3 earnings call.

Speaker #4: for joining NIO's 2025 Q3 earnings call.

William Li: 2025????????????87,071????????????40.8%?

Speaker #4: In Q3 2025, the company delivered 87,071 smart electric vehicles, representing a year-over-year growth of 40.8%.

Stanley Qu: In Q3 2025, the company delivered 87,071 smart EVs, representing a year-over-year growth of 40.8%.

[Translator]: In Q3 2025, the company delivered 87,071 smart EVs, representing a year-over-year growth of 40.8%.

Speaker #3: 第三季度，我们相继发布了乐道L90和蔚来全新ES8两款纯电大三排SUV产品，其综合竞争力在各自细分市场受到了用户的高度认可。市场需求强劲，同时拥护纯车型的市场需求也在持续增长。未来乐道拥护纯三个品牌在更广的价格带满足更广泛用户的需求，共同推动公司销量大幅提升。

William Li: ??????????????L90?????ES8???????SUV??????????????????????????????????????????????????????????????????????????????????????????????????

Speaker #4: During the quarter, we launched two large three-row battery electric SUVs, the ONVO L90 and the NIO All-New ES8. Both models have received strong recognition from users for their comprehensive competitiveness and continue to see solid demand.

Stanley Qu: During the quarter, we launched two large three-row battery electric SUVs, the Onvo L90 and the NIO ES8. Both models have received strong recognition from users for their comprehensive competitiveness and continue to see solid demand. In the meantime, Firefly continued to see steady market growth. By covering a broader range of price segments and meeting more diverse needs, the NIO, Onvo, and the Firefly brands are able to drive significant growth in deliveries.

[Translator]: During the quarter, we launched two large three-row battery electric SUVs, the Onvo L90 and the NIO ES8. Both models have received strong recognition from users for their comprehensive competitiveness and continue to see solid demand. In the meantime, Firefly continued to see steady market growth. By covering a broader range of price segments and meeting more diverse needs, the NIO, Onvo, and the Firefly brands are able to drive significant growth in deliveries.

Speaker #4: In the meantime, Firefly continued to see steady market growth. By covering a broader range of price segments and meeting more diverse needs, the NIO ONVO and the Firefly brands are able to drive significant growth in deliveries.

Speaker #3: 2025年10月，公司交付40,397辆智能电动汽车，同比增长92.6%，交付量连续三个月创历史新高。我们预计第四季度的总交付量为12万至12.5万辆，同比增长65.1%至72%，达到季度新高。

William Li: 2025?10??????40,397????????????92.6%?????????????????????????????12??12.5???????65.1%?72%????????

Speaker #4: In October, the company

Stanley Qu: In October, the company delivered 40,397 smart EVs, up 92.6% year-over-year, marking three consecutive months of record-high deliveries. For Q4, we expect total deliveries to be in the range of 120,000 to 125,000, a year-over-year increase of 60.1% to 72%, achieving a new quarterly high.

[Translator]: In October, the company delivered 40,397 smart EVs, up 92.6% year-over-year, marking three consecutive months of record-high deliveries. For Q4, we expect total deliveries to be in the range of 120,000 to 125,000, a year-over-year increase of 60.1% to 72%, achieving a new quarterly high.

Speaker #4: Delivered 92.6% year over year, marking three consecutive months of record high deliveries with 40,397 smart EVs. For Q4, we expect total deliveries to be in the range of 120,000 to 125,000, a year-over-year increase of 60.1% to 72%, achieving a new quarterly high.

Speaker #3: 财务表现方面，通过成本结构的持续优化，第三季度整车毛利率提升至14.7%，其他销售毛利率为7.8%。综合毛利率创下近三年来的新高，达到13.9%。公司产品与服务盈利能力显著增强。

William Li: ???????????????????????????????14.7%?????????7.8%??????????????????13.9%?????????????????

Speaker #4: On the financial front, thanks to...

Stanley Qu: On the financial front, thanks to the ongoing cost optimization, in Q3, the vehicle gross margin improved to 14.7%, and the gross margin of other sales was 7.8%, resulting in an overall gross margin of 13.9%, the highest in nearly three years. This reflects the company's strengthened product and service profitability.

[Translator]: On the financial front, thanks to the ongoing cost optimization, in Q3, the vehicle gross margin improved to 14.7%, and the gross margin of other sales was 7.8%, resulting in an overall gross margin of 13.9%, the highest in nearly three years. This reflects the company's strengthened product and service profitability.

Speaker #4: The ongoing cost optimization in Q3 led to an improvement in the vehicle gross margin to 14.7%. The gross margin of other sales was 7.8%, resulting in an overall gross margin of 13.9%, the highest in nearly three years.

Speaker #4: This reflects the company's strengthened product and service profitability.

Speaker #3: 同时，我们研发销售与管理方面的运营效率持续提高，公司第三季度non-gap运营亏损环比收窄超30%。第三季度，公司也实现正向经营现金流和自由现金流。

William Li: ???????????????????????????????non-gap?????????30%?????????????????????????

Speaker #4: Operational efficiency in R&D, sales, and general administration continued to improve. Non-GAAP operating loss was narrowed by 30% quarter over quarter. In Q3, the company's operating cash flow and free cash flow both turned positive.

Stanley Qu: Operational efficiency in R&D, sales, and general administration continued to improve. Non-GAAP operating loss was narrowed by 30% quarter over quarter. In Q3, the company's operating cash flow and free cash flow both turned positive.

[Translator]: Operational efficiency in R&D, sales, and general administration continued to improve. Non-GAAP operating loss was narrowed by 30% quarter over quarter. In Q3, the company's operating cash flow and free cash flow both turned positive.

William Li: ??????????????????????????????12??????????????????????????????????????????????????????

Speaker #4: NIO remains committed to a battery electric vehicle roadmap featuring chargeable, swappable, and upgradeable batteries. Leveraging the company's full-stack R&D capabilities in 12 key tech areas, the three brands are able to precisely meet users' needs across multiple market segments.

Stanley Qu: NIO remains committed to a battery electric vehicle roadmap featuring chargeable, swappable, and upgradable batteries. Leveraging the company's full-stack R&D capabilities in 12 key tech areas, the three brands are able to precisely meet users' needs across multiple market segments, and the competitiveness of our new products under all three brands has been well received.

[Translator]: NIO remains committed to a battery electric vehicle roadmap featuring chargeable, swappable, and upgradable batteries. Leveraging the company's full-stack R&D capabilities in 12 key tech areas, the three brands are able to precisely meet users' needs across multiple market segments, and the competitiveness of our new products under all three brands has been well received.

Speaker #4: And the competitiveness of our new products under all three brands has been well received.

Speaker #3: 未来品牌方面，近期我们推出了ET9地平线特别版的三款全新色彩主题。地平线版本是未来品牌最高限产品的特别版本。凭借独特设计品味、科技行政旗舰定位和尊享服务，是推出以来市场表现亮眼。我们的全场景科技旗舰SUV全新ES8，在9月份NIO Day正式上市并开启交付。凭借纯电技术所带来的空间与驾乘体验优势，全新ES8在高端大三排SUV市场中持续热销，上市仅41天就实现超过1万台的交付，创造了40万元以上纯电车型交付破万的最快记录。未来品牌的另一款核心产品，智能电动全能SUV

William Li: above RMB 300,000.

Speaker #3: ES6，也在10月份达到累计30万台下限的里程碑，成为中国品牌30万元以上纯电车型的累计销量冠军。 The NIO brand recently

Stanley Qu: The NIO brand recently introduced three color themes for the ET9 Horizon Edition. The Horizon Edition is a special collection reserved for NIO's most prominent flagship models. The distinctive design, advanced technology, executive excellence, and exclusive services make the ET9 Horizon Edition a standout in the market. The ONVO ES8, an all-around tech flagship SUV, was launched and started delivery at NIO Day in September. Leveraging the unrivaled space and driving experiences made possible by its all-electric technology, the ONVO ES8 has remained a top seller in the premium large three-row SUV segment, surpassing 10,000 deliveries within just 41 days, the fastest for a BEV priced above RMB 400,000. In November, the ES6, another all-around SUV in NIO's lineup, celebrated its 300,000 unit delivery milestone, topping the sales chart of China's BEV models priced over RMB 300,000.

[Translator]: The NIO brand recently introduced three color themes for the ET9 Horizon Edition. The Horizon Edition is a special collection reserved for NIO's most prominent flagship models. The distinctive design, advanced technology, executive excellence, and exclusive services make the ET9 Horizon Edition a standout in the market. The ONVO ES8, an all-around tech flagship SUV, was launched and started delivery at NIO Day in September. Leveraging the unrivaled space and driving experiences made possible by its all-electric technology, the ONVO ES8 has remained a top seller in the premium large three-row SUV segment, surpassing 10,000 deliveries within just 41 days, the fastest for a BEV priced above RMB 400,000. In November, the ES6, another all-around SUV in NIO's lineup, celebrated its 300,000 unit delivery milestone, topping the sales chart of China's BEV models priced over RMB 300,000.

Speaker #4: We introduced three color themes for the ET9 Horizon Edition. The Horizon Edition is a special collection reserved for NIO's most prominent flagship models. The distinctive design, advanced technology, executive excellence, and exclusive services make the ET9 Horizon Edition a standout in the market.

Speaker #4: The all-new ES8, an all-around tech flagship SUV, was launched and started delivery at NIO Day in September. Leveraging the unrivaled space and driving experiences made possible by its all-electric technology, the all-new ES8 has remained a top seller in the premium large three-row SUV segment, surpassing 10,000 deliveries within just 41 days.

Speaker #4: The fastest for a BAF priced above 400,000 RMB. In November, the ES6, another all-around SUV in NIO's lineup, celebrated its 300,000 units delivery milestone, topping the sales chart of China's BAF models twice over 300,000 RMB.

Speaker #3: 乐道品牌方面，L90自7月底上市以来，三个月完成超过3.3万台交付，连续三个月位居纯电大型SUV销量第一，同时乐道L60的市场表现也同样优异。今年前三季度销量稳居20万元以上纯电SUV市场前二。乐道凭借突出的产品体验与用户口碑，获得了越来越多家庭用户的认可。

William Li: ???????L90?7??????????????3.3????????????????SUV??????????L60?????????????????????20??????SUV?????????????????????????????????????

Speaker #4: Within the OMO brand, the L90 delivered over 33,000 units in three months since its launch in late July, leading the large battery electric SUV segment for three consecutive months.

Stanley Qu: Within the Onvo brand, the L90 delivered over 33,000 units in three months since its launch in late July, leading the large battery electric SUV segment for three consecutive months. The L60 also delivered strong performance, maintaining a top two position in the battery electric SUV segment, with MSRP above RMB 200,000 during the first three quarters. With exceptional product experiences and word-of-mouth, the Onvo brand increasingly becomes the preferred choice for families.

[Translator]: Within the Onvo brand, the L90 delivered over 33,000 units in three months since its launch in late July, leading the large battery electric SUV segment for three consecutive months. The L60 also delivered strong performance, maintaining a top two position in the battery electric SUV segment, with MSRP above RMB 200,000 during the first three quarters. With exceptional product experiences and word-of-mouth, the Onvo brand increasingly becomes the preferred choice for families.

Speaker #4: The L60 also delivered strong performance, maintaining a top two position in the battery electric SUV segment with an MSRP above 200,000 RMB during the first three quarters.

Speaker #4: With exceptional products, experiences, and word of mouth, the OMO brand increasingly becomes the preferred choice for families.

William Li: ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Speaker #4: Since delivery 人物成品牌方面，自交付以来，销量在高端智能电动小车市场中持续保持领先地位，成为细分市场的标杆。同时，人物成创新地通过特别版车型的推出，进一步吸引追求品质与个性化主张的用户群体。这款灵动小车正陆续登陆海外市场，我们将进入欧洲和亚洲更多的国家和地区。 small EV market in sales volume, establishing itself as a began, Firefly has led the high-end benchmark in the market. With creative launches of special editions, it continues to strengthen its appeal among users who value quality and individuality.

Stanley Qu: Since delivery began, Firefly has led the high-end small EV market in sales volume, establishing itself as a benchmark in the market. With creative launches of special editions, it continues to strengthen its appeal among users who value quality and individuality. This dynamic small car is already making its way into global markets and will expand into more countries and regions across Europe and Asia.

[Translator]: Since delivery began, Firefly has led the high-end small EV market in sales volume, establishing itself as a benchmark in the market. With creative launches of special editions, it continues to strengthen its appeal among users who value quality and individuality. This dynamic small car is already making its way into global markets and will expand into more countries and regions across Europe and Asia.

Speaker #4: This dynamic small car is already making its way into global markets and will expand into more countries and regions across Europe and Asia.

Speaker #3: 在智能驾驶方面，未来世界模型是首个在理解世界预测世界基础上进行闭环训练的世界模型。我们也看到自驾的行业技术趋势逐步向世界模型靠拢。接下来，我们将为搭载神机自研芯片和英伟达ONX芯片的车型进行未来世界模型的升级迭代。在城区及高速领航、智能泊车、智能安全辅助、全维度带来体验优化，并且量产Openside的开放级指令能力的全新体验。在乐道智能驾驶OSD上，年底推出的Coconut 2.1.0的版本也将在城区领航和智能泊车上迭代端到端模型化的体验。

William Li: World Model????????????????????????????????????????OpenSea???????????????ONVO????OSD???????Coconut 2.1.0?????????????????????????????

Speaker #4: In smart driving, the new world model (NWM) is the first world model that not only understands and predicts the real world but also operates with a closed-loop training system.

Stanley Qu: In smart driving, the NIO World Model NWM is the first world model that not only understands and predicts the real world, but also operates with a closed-loop training system. Actually, the industry trend is increasingly shifting toward a world model roadmap. Next, we will gradually roll out upgrades on NWM for vehicles equipped with NIO's NX9031 and NVIDIA's Orin X smart driving chips, further enhancing urban and highway NOP+, parking, and smart safety performance. The upgrades will also enable execution of OpenSea commands. For the Onvo smart driving, the Coconut 2.1.0 scheduled for release at year-end will upgrade its model-based end-to-end solution for urban and highway NOA, as well as parking, delivering a more seamless driving experience.

[Translator]: In smart driving, the NIO World Model NWM is the first world model that not only understands and predicts the real world, but also operates with a closed-loop training system. Actually, the industry trend is increasingly shifting toward a world model roadmap. Next, we will gradually roll out upgrades on NWM for vehicles equipped with NIO's NX9031 and NVIDIA's Orin X smart driving chips, further enhancing urban and highway NOP+, parking, and smart safety performance. The upgrades will also enable execution of OpenSea commands. For the Onvo smart driving, the Coconut 2.1.0 scheduled for release at year-end will upgrade its model-based end-to-end solution for urban and highway NOA, as well as parking, delivering a more seamless driving experience.

Speaker #4: Actually, the industry trend is increasingly shifting toward a world model roadmap. Next, we will gradually roll out upgrades on NWM for vehicles equipped with NIO's NX 9031 and NVIDIA's ONX smart driving chips.

Speaker #4: Further enhancing urban and highway NOP+, parking, and smart safety performance. The upgrades will also enable execution of Openside commands. For the OMO smart driving, the Coconut 2.1.0, scheduled for release at year-end, will upgrade its model base end-to-end solution for urban and highway NOA, as well as parking, delivering a more seamless driving experience.

Speaker #3: 销售网络方面，截至目前，我们开设了172家未来中心和395家未来空间。乐道门店数量达到422家，在服务网络方面，我们已经开设了405家服务中心和70家交付中心。

William Li: ?????????????????172??????395??????????????422?????????????????405??????70??????

Speaker #4: Our sales and service network currently includes 172 NIO Houses, 395 NIO Spaces, 422 OMO Stores, as well as 405 service centers and 70 delivery centers.

Stanley Qu: Our sales and service network currently includes 172 NIO Houses, 395 NIO Spaces, 422 Onvo stores, as well as 405 service centers, and 70 delivery centers.

[Translator]: Our sales and service network currently includes 172 NIO Houses, 395 NIO Spaces, 422 Onvo stores, as well as 405 service centers, and 70 delivery centers.

Speaker #3: 通换电网络方面，截至目前，我们全球已经累计布局3,641座换电站，以为用户累计提供超过9,200万次换电服务。此外，未来已累计建成超过27,000根超充桩和目的地充电桩。

William Li: ???????????????????????3,641???????????????9,200???????????????????27,000????????????

Speaker #4: Our global charging and swapping

Stanley Qu: Our global charging and swapping network now operates 3,641 power swap stations, providing users with more than 92 million swaps. Besides, NIO has built over 27,000 power chargers and destination chargers.

[Translator]: Our global charging and swapping network now operates 3,641 power swap stations, providing users with more than 92 million swaps. Besides, NIO has built over 27,000 power chargers and destination chargers.

Speaker #4: The network now operates 3,641 power swap stations, providing users with more than 92 million swaps. Besides, NIO has built over 27,000 power chargers and destination chargers.

Speaker #3: 9月17日，未来在美股和港股市场同步完成合计11.6亿美元的股权融资。此次融资进一步增强了公司资产负债表，为长期技术研发和用户服务提供更充足的资源。

William Li: 9?17??????????????????11.6????????????????????????????????????????????????

Speaker #4: On September 17, NIO completed a total of $1.16 billion in equity financing on both the U.S. and Hong Kong stock exchanges, further strengthening its balance sheet and providing ample resources for its long-term commitments to research and development and user.

Stanley Qu: On 17 September 2023, NIO completed a total of $1.16 billion in equity financing on both the US and Hong Kong stock exchanges, further strengthening its balance sheet and providing ample resources for its long-term commitments to R&D and user services.

[Translator]: On 17 September 2023, NIO completed a total of $1.16 billion in equity financing on both the US and Hong Kong stock exchanges, further strengthening its balance sheet and providing ample resources for its long-term commitments to R&D and user services.

Speaker #4: services. CEV On November

William Li: 11?23??2025????????????????????????2015????????????????4??????????????

Speaker #3: 23日，2025未来被中国大学生电动方程式大赛在合肥圆满落幕。自2015年起，未来持续支持该项赛事，助力数万名年轻工程师的培养与成长。

Stanley Qu: On 23 November 2025, the NIO Formula Student Electric China successfully concluded in Hefei. NIO has been supporting this competition since 2015, helping cultivate tens of thousands of young professionals for the industry.

[Translator]: On 23 November 2025, the NIO Formula Student Electric China successfully concluded in Hefei. NIO has been supporting this competition since 2015, helping cultivate tens of thousands of young professionals for the industry.

Speaker #4: On the 23rd, the 2025 NIO Cup Formula Student Electric China successfully concluded in Hefei. NIO has been supporting this competition since 2016, helping cultivate tens of thousands of young professionals for the industry.

Speaker #3: 今天是未来成立11周年，我们在智能电动汽车核心技术领域坚持正向研发，在充换电基础设施建设方面持续投入，建立了多品牌产品销售与服务体系，与超过90万名用户一起创造了富有活力、共同成长的用户社区。

William Li: ???????11?????????????????????????????????????????????????????????????90????????????????????????

Speaker #4: Today also marks the company's 11th anniversary. Over the past 11 years, we have remained committed to in-house R&D in core smart EV technologies, continued investing in charging and swapping infrastructure, built a multi-brand sales and service system, and created a vibrant community for over 900,000 users to share joy and grow together.

Stanley Qu: Today also marks the company's 11th anniversary. Over the past 11 years, we have remained committed to in-house R&D in core smart EV technologies, continued investing in charging and swapping infrastructure, built a multi-brand sales and service system, and created a vibrant community for over 900,000 users to share joy and grow together.

[Translator]: Today also marks the company's 11th anniversary. Over the past 11 years, we have remained committed to in-house R&D in core smart EV technologies, continued investing in charging and swapping infrastructure, built a multi-brand sales and service system, and created a vibrant community for over 900,000 users to share joy and grow together.

Speaker #3: 这些优势已经获得越来越多用户的认可。今年三个品牌的全新产品在不同细分市场表现突出，公司进入新一轮快速增长阶段。与此同时，我们基于CBO基本经营单元机制，全面调整组织结构，提升运营效率，经营结果得到了持续的改善。

William Li: CBU4????????????????????????????????????????????????????????????CBU??????????????????????????????????????

Speaker #4: These advantages have been increasingly recognized by our users. This year, our new products across three brands have performed strongly in their respective market segments.

Stanley Qu: These advantages have been increasingly recognized by our users. This year, our new products across three brands have performed strongly in their respective market segments, marking the beginning of a new phase of rapid growth. At the same time, through the sales business unit mechanism, we have comprehensively optimized our organization and enhanced operational efficiency, consistently improving our business results.

[Translator]: These advantages have been increasingly recognized by our users. This year, our new products across three brands have performed strongly in their respective market segments, marking the beginning of a new phase of rapid growth. At the same time, through the sales business unit mechanism, we have comprehensively optimized our organization and enhanced operational efficiency, consistently improving our business results.

Speaker #4: Marking the beginning of a new phase of rapid growth. At the same time, through the sales business unit mechanism, we have comprehensively optimized our organization and enhanced operational efficiency, consistently improving our business results.

Speaker #3: 下一家发生向上增长，我们将持续围绕用户体验和价值创造，提供更具竞争力的技术产品和服务，成为一家技术与体验领先的用户企业，共创可持续和更美好的未来。

William Li: ?????????????????????????????????????????????????????????????????????????

Speaker #4: Rooted deep and growing

Stanley Qu: Rooted deep and growing beyond, looking ahead, we will continue to provide more competitive technology, products, and services to deliver better user experience and greater user value. As the company evolves into a user enterprise leading in technology and experience, we aim to shape a sustainable and brighter future with more users.

[Translator]: Rooted deep and growing beyond, looking ahead, we will continue to provide more competitive technology, products, and services to deliver better user experience and greater user value. As the company evolves into a user enterprise leading in technology and experience, we aim to shape a sustainable and brighter future with more users.

Speaker #4: Beyond looking ahead, we will continue to provide more competitive technology, products, and services to deliver a better user experience and greater user value. As the company evolves into a user enterprise, leading in technology and experience, we aim to shape a sustainable and brighter future with more users.

Speaker #3: 感谢大家的支持，现在Stanley将为大家介绍2025年三季度的财务业绩，有请Stanley。

William Li: ?????????? Stanley ??????2025???????????? Stanley?

Speaker #4: Thank you for your support. With that, I will now turn the call over to Stanley for Q3's financial details. Over to you, Stanley.

Stanley Qu: Thank you for your support. With that, I will now turn the call over to Stanley for Q3 financial details. Over to you, Stanley.

[Translator]: Thank you for your support. With that, I will now turn the call over to Stanley for Q3 financial details. Over to you, Stanley.

Speaker #3: Thank you, William. Let's now review our key financial results for the third quarter of 2025. Our total revenues reached $21.8 billion, an increase of 16.7% year over year and 14.7% quarter over quarter.

William Li: Thank you, William. Let's now review our key financial results for the third quarter of 2025. Our total revenues reached RMB 21.8 billion, increased 16.7% year-over-year, and 14.7% quarter-over-quarter. Vehicle sales were RMB 19.2 billion, up 15% year-over-year and 19% quarter-over-quarter. The year-over-year growth was mainly due to higher deliveries, partially offset by a lower average selling price from product mix changes. The quarter-over-quarter increase was mainly from higher deliveries. Other sales were RMB 2.6 billion, up 31.2% year-over-year, and down 9.8% quarter-over-quarter. The year-over-year growth was driven by increased sales of used cars, technical R&D services, and sales of car accessories and after-sales vehicle services, while the quarter-over-quarter decrease was mainly due to the decrease in revenues from used cars and technical R&D services, partially offset by the increase in car accessories and after-sales vehicle services, and provision of power solutions.

Stanley Qu: Thank you, William. Let's now review our key financial results for the third quarter of 2025. Our total revenues reached RMB 21.8 billion, increased 16.7% year-over-year, and 14.7% quarter-over-quarter. Vehicle sales were RMB 19.2 billion, up 15% year-over-year and 19% quarter-over-quarter. The year-over-year growth was mainly due to higher deliveries, partially offset by a lower average selling price from product mix changes. The quarter-over-quarter increase was mainly from higher deliveries. Other sales were RMB 2.6 billion, up 31.2% year-over-year, and down 9.8% quarter-over-quarter. The year-over-year growth was driven by increased sales of used cars, technical R&D services, and sales of car accessories and after-sales vehicle services, while the quarter-over-quarter decrease was mainly due to the decrease in revenues from used cars and technical R&D services, partially offset by the increase in car accessories and after-sales vehicle services, and provision of power solutions.

Speaker #3: Vehicle sales were $19.2 billion R&D, up 15% year over year and 19% quarter over quarter. The year-over-year growth was mainly due to higher deliveries, partially offset by a lower average selling price from product mix changes.

Speaker #3: The quarter-over-quarter increase was mainly from higher deliveries. Other sales were $6.6 billion in R&D, up 31.2% year over year and down 9.8% quarter over quarter.

Speaker #3: The year-over-year growth was driven by increased sales of used cars, technical R&D services, sales of car accessories, and after-sales vehicle services.

Speaker #3: While the quarter-over-quarter decrease was mainly due to the decrease in revenues from used cars, technical R&D services, partially offset by the increase in parts, accessories, after-sales vehicle services, and the provision of power solutions.

Speaker #3: Looking at margins, vehicle margin was 14.7%, compared with 13.1% in the Q3 last year, and 10.3% last quarter. The year over year and quarter over quarter increase were mainly due to the decreased material costs, per unit primary driven by our comprehensive cost reduction efforts.

William Li: Looking at margins, vehicle margin was 14.7%, compared with 13.1% in Q3 last year and 10.3% last quarter. The year-over-year and quarter-over-quarter increase were mainly due to the decreased material cost per unit, primarily driven by our comprehensive cost reduction efforts. Overall gross margin was 13.9% versus 10.7% in Q3 last year and 10% last quarter. The year-over-year increase mainly reflected higher vehicle margin, and better profitability in sales of cars, accessories, and after-sales vehicle services, driven by cost reduction and efficiency improvements. The quarter-over-quarter increase was mainly attributable to higher vehicle margin. Turning to OPEX, R&D expenses were CNY 2.4 billion, decreased 28% year-over-year and 20.5% quarter-over-quarter. The decreases year-over-year and quarter-over-quarter were mainly driven by lower personnel costs in R&D functions due to organizational optimization, and decreased design and development costs from different development stages. SG&E expenses were CNY 4.2 billion, up 1.8% year-over-year and 5.5% quarter-over-quarter.

Looking at margins, vehicle margin was 14.7%, compared with 13.1% in Q3 last year and 10.3% last quarter. The year-over-year and quarter-over-quarter increase were mainly due to the decreased material cost per unit, primarily driven by our comprehensive cost reduction efforts. Overall gross margin was 13.9% versus 10.7% in Q3 last year and 10% last quarter. The year-over-year increase mainly reflected higher vehicle margin, and better profitability in sales of cars, accessories, and after-sales vehicle services, driven by cost reduction and efficiency improvements. The quarter-over-quarter increase was mainly attributable to higher vehicle margin. Turning to OPEX, R&D expenses were CNY 2.4 billion, decreased 28% year-over-year and 20.5% quarter-over-quarter. The decreases year-over-year and quarter-over-quarter were mainly driven by lower personnel costs in R&D functions due to organizational optimization, and decreased design and development costs from different development stages. SG&E expenses were CNY 4.2 billion, up 1.8% year-over-year and 5.5% quarter-over-quarter.

Speaker #3: Overall gross margin was 13.9%, versus 10.7% in Q3 last year and 10% last quarter. The year-over-year increase mainly reflected higher vehicle margin and better profitability in sales of parts, accessories, and after-sales vehicle services, driven by cost reduction and efficiency improvements.

Speaker #3: The quarter-over-quarter increase was mainly attributable to higher vehicle margins. Turning to OPEX, R&D expenses were $2.4 billion, decreased 28% year over year and 20.5% quarter over quarter.

Speaker #3: The decreases year over year and quarter over quarter were mainly driven by lower personnel costs in R&D functions due to organizational optimization and the decreased design and development costs from different development stages.

Speaker #3: SGN expenses were $4.2 billion R&D, up 1.8% year over year and 5.5% quarter over quarter. The year-over-year SGN expenses stayed stable. The quarter-over-quarter increase was mainly driven by the increase in sales and marketing activities, associated with new product launches.

William Li: The year-over-year SG&E expenses stayed stable. The quarter-over-quarter increase was mainly driven by the increase in sales and marketing activities associated with new product launches. Loss from operations was RMB 3.5 billion, down 32.8% year-over-year and 28.3% quarter-over-quarter. Excluding share-based compensation expenses and organizational optimization charges, adjusted loss from operations was RMB 2.8 billion, representing a decrease of 39.5% year-over-year and 31.3% quarter-over-quarter. Net loss was RMB 3.5 billion, showing a decrease of 31.2% year-over-year and a decrease of 30.3% quarter-over-quarter. Excluding share-based compensation expenses and organizational optimization charges, adjusted net loss was RMB 2.7 billion, representing a decrease of 38% year-over-year and 33.7% quarter-over-quarter. Furthermore, we generated positive operating cash flow and positive free cash flow this quarter.

The year-over-year SG&E expenses stayed stable. The quarter-over-quarter increase was mainly driven by the increase in sales and marketing activities associated with new product launches. Loss from operations was RMB 3.5 billion, down 32.8% year-over-year and 28.3% quarter-over-quarter. Excluding share-based compensation expenses and organizational optimization charges, adjusted loss from operations was RMB 2.8 billion, representing a decrease of 39.5% year-over-year and 31.3% quarter-over-quarter. Net loss was RMB 3.5 billion, showing a decrease of 31.2% year-over-year and a decrease of 30.3% quarter-over-quarter. Excluding share-based compensation expenses and organizational optimization charges, adjusted net loss was RMB 2.7 billion, representing a decrease of 38% year-over-year and 33.7% quarter-over-quarter. Furthermore, we generated positive operating cash flow and positive free cash flow this quarter.

Speaker #3: Loss from operations was $3.5 billion R&D, down 32.8% year over year and 28.3% quarter over quarter. Excluding share-based compensation expenses and organizational optimization charges, the adjusted loss from operations was $2.8 billion R&D, representing a decrease of 39.5% year over year and 31.3% quarter over quarter.

Speaker #3: Net loss was $3.5 billion R&D, showing a decrease of 31.2% year over year and a decrease of 30.3% quarter over quarter. Excluding share-based compensation expenses and organizational optimization charges, adjusted net loss was $2.7 billion R&D, representing a decrease of 38% year over year and 33.7% quarter over quarter.

Speaker #3: Furthermore, we generated positive operating cash flow and positive free cash flow this quarter. Together with the $1.16 billion equity offering in September, we ended the quarter with $36.7 billion in total cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits.

William Li: Together with the $1.16 billion equity offering in September, we ended the quarter with RMB 36.7 billion in total cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits, laying a solid foundation for our future growth. That wraps up our prepared remarks. For more information and the details of our unaudited third quarter 2025 financial results, please refer to our earnings press release. Now, I will turn the call over to the operator to start our Q&A session. Operator.

Together with the $1.16 billion equity offering in September, we ended the quarter with RMB 36.7 billion in total cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits, laying a solid foundation for our future growth. That wraps up our prepared remarks. For more information and the details of our unaudited third quarter 2025 financial results, please refer to our earnings press release. Now, I will turn the call over to the operator to start our Q&A session. Operator.

Speaker #3: Laying a solid foundation for our future growth. That wraps up our prepared remarks. For more information and the details of our audited third quarter 2025 financial results.

Speaker #3: Please refer to our earnings press release. Now, I will turn the call over to the operator to start our Q&A session.

Speaker #3: Operator. Thank

Speaker #2: 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.

Operator: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask a question. For the benefit of all the participants on today's call, please limit yourself to two questions. If you have additional questions, you can re-enter the queue. Our first question comes from the line of Tim Xiao from Morgan Stanley. Please go ahead.

[Operator]: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask a question. For the benefit of all the participants on today's call, please limit yourself to two questions. If you have additional questions, you can re-enter the queue. Our first question comes from the line of Tim Xiao from Morgan Stanley. Please go ahead.

Speaker #2: If you are on a speakerphone, please pick up the handset to ask a question. For the benefit of all the participants on today's call, please limit yourself to two questions. If you have additional questions, you can re-enter the queue.

Speaker #2: Our first question comes from the line of Tim Xiao from Morgan Stanley. Please go ahead.

Speaker #3: Hi. Thanks for taking my question. This is Tim from Morgan Stanley. So I have two questions. The first question is about the break-even target because we noticed that NIO's updated fourth quarter delivery guidance of 120,000 to 125,000 came in around 20% lower than our previous target of 150,000.

Tim Xiao: Hi. Thanks for taking my question. This is Tim from Morgan Stanley. I have two questions. The first question is about the break-even target because we noticed that NIO's updated fourth quarter delivery guidance of 120,000 to 125,000 came in around 20% lower than our previous target of 150,000. Just wondering if the revolving shortfall adversely affects the company's break-even target for fourth quarter. Considering the subseasonal demand and policy uncertainty, when could the company achieve previous monthly run rate of 50,000? That's my first question.

Tim Hsiao: Hi. Thanks for taking my question. This is Tim from Morgan Stanley. I have two questions. The first question is about the break-even target because we noticed that NIO's updated fourth quarter delivery guidance of 120,000 to 125,000 came in around 20% lower than our previous target of 150,000. Just wondering if the revolving shortfall adversely affects the company's break-even target for fourth quarter. Considering the subseasonal demand and policy uncertainty, when could the company achieve previous monthly run rate of 50,000? That's my first question.

Speaker #3: So, just wondering, with the volume shortfall, will it adversely affect the company's break-even target for the fourth quarter? And considering the subseasonal demand and policy uncertainty, when could the company achieve the previous monthly run rate of 50,000?

Speaker #3: That's my first question.

William Li: ?? Tim??????????????????????????????????????????????????10??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????EX8?????????????????????????????????????????????????????????????????????????????????L90??L60?11????????????????????????????????????????????????????????????????????????????????EX8???????????????????????????????????????????????????????????????????????????????

Speaker #4: Thank you for the question. Actually, for the company, we still have confidence in achieving quarterly breakeven in Q4, and this is still our financial target towards the end of the year.

Stanley Qu: Thank you for the question. Actually, for the company, we still have the confidence in achieving quarterly break-even in Q4, and this is still our financial target towards the end of the year. In the meantime, we did see the impact coming from the phase-out and the termination of the trade-in and replacement subsidies since the middle of October. This is actually the challenge faced by the entire industry. In that case, in Q4 for the entire industry, we may not see the year-end sales spike that we normally expect towards the end of the year. As you are closely tracking the market and all the numbers, probably you have also foreseen that potential change towards the end of the year. In the meantime, as next year, the purchase tax exemptions on the new energy vehicles will be further reduced.

[Translator]: Thank you for the question. Actually, for the company, we still have the confidence in achieving quarterly break-even in Q4, and this is still our financial target towards the end of the year. In the meantime, we did see the impact coming from the phase-out and the termination of the trade-in and replacement subsidies since the middle of October. This is actually the challenge faced by the entire industry. In that case, in Q4 for the entire industry, we may not see the year-end sales spike that we normally expect towards the end of the year. As you are closely tracking the market and all the numbers, probably you have also foreseen that potential change towards the end of the year. In the meantime, as next year, the purchase tax exemptions on the new energy vehicles will be further reduced.

Speaker #4: But in the meantime, we did see the impact coming from the phase-out and the termination of the trade-in and replacement subsidies since the middle of October.

Speaker #4: But this is actually the challenge faced by the entire industry. In that case, in Q4 for the entire industry, we may not see the year-end sales spike that we normally expect towards the end of the year.

Speaker #4: As you are closely tracking the market and all the numbers, you probably have also foreseen a potential change towards the end of the year.

Speaker #4: And in the meantime, as next year the purchasing tax exemptions on the new energy vehicles will be further reduced, for new products like the ES8, with other backlogs that will continue into next year, car companies including NIO provide the guarantee for the purchasing tax exemptions to users waiting for their cars next year.

Stanley Qu: For the new products like the ES8, with all the backlogs that will continue towards next year, car companies, including NIO, provide the guarantee for the purchasing tax exemptions to users waiting up for their cars next year. Yet no car company is going to provide the guarantee for the trade-in and replacement subsidy. In that case, the overall market demand has been affected because of the cancellation of the trade-in subsidy. Especially for our company, our L60 and L90 are majorly affected by this cancellation as they are also a relatively low-priced segment and are more sensitive to such changes. Yet we still have confidence in achieving Q4 break-even target. This is mainly because we do see a strong demand for our high-margin products like the ES8. We still have ample order backlog, and also new order intake for that product.

For the new products like the ES8, with all the backlogs that will continue towards next year, car companies, including NIO, provide the guarantee for the purchasing tax exemptions to users waiting up for their cars next year. Yet no car company is going to provide the guarantee for the trade-in and replacement subsidy. In that case, the overall market demand has been affected because of the cancellation of the trade-in subsidy. Especially for our company, our L60 and L90 are majorly affected by this cancellation as they are also a relatively low-priced segment and are more sensitive to such changes. Yet we still have confidence in achieving Q4 break-even target. This is mainly because we do see a strong demand for our high-margin products like the ES8. We still have ample order backlog, and also new order intake for that product.

Speaker #4: Yet no car company is going to provide the guarantee for the trade-in and replacement subsidy. In that case, the overall market demand has been affected because of the cancellation of the trade-in subsidy.

Speaker #4: Especially for our company, our onboard L60 and L90 are majorly affected by this cancellation, as they are of a relatively low price segment and are more sensitive to such changes.

Speaker #4: Yet we still have confidence in achieving our Q4 break-even target. This is mainly because we see a strong demand for our high-margin products, like the all-new ES8.

Speaker #4: We still have an ample order backlog, and also new order intake for that product. Overall speaking, the order intake on the onboard has been affected because of the cancellation of the trade-in subsidy.

Stanley Qu: Overall speaking, the order intake on the Honda has been affected because of the cancellation of the trade-in subsidy, yet the overall impact on the gross profit is limited. In that case, we do have the confidence for the financial target.

Overall speaking, the order intake on the Honda has been affected because of the cancellation of the trade-in subsidy, yet the overall impact on the gross profit is limited. In that case, we do have the confidence for the financial target.

Speaker #4: Yet the overall impact on the gross profit is limited. In that case, we do have the confidence for the financial target. In the meantime, in terms of the vehicle gross margin in Q3, we have achieved a vehicle gross margin of 14.7%, better than we expected.

William Li: ???????????????????????14.7%?????????????????????????????????????????????????????????????????????????18????????????????????????????EX8????????????????????????EX8??????????20%?????????????????????Q3????????????

Stanley Qu: In the meantime, in terms of the vehicle gross margin, in Q3 we have achieved a vehicle gross margin of 14.7%, better than we expected. In the meantime, we are also working with our supply chain partners on the continuous cost reduction, and also commercial negotiation efforts towards Q4. With that, we foresee the vehicle gross margin in Q4 to be around 18%. For the ES8 in Q4, we also expect significant growth in sales and delivery volume, with a very lucrative margin of over 20%. The overall gross profit for the entire company will be significantly improved from Q3.

[Translator]: In the meantime, in terms of the vehicle gross margin, in Q3 we have achieved a vehicle gross margin of 14.7%, better than we expected. In the meantime, we are also working with our supply chain partners on the continuous cost reduction, and also commercial negotiation efforts towards Q4. With that, we foresee the vehicle gross margin in Q4 to be around 18%. For the ES8 in Q4, we also expect significant growth in sales and delivery volume, with a very lucrative margin of over 20%. The overall gross profit for the entire company will be significantly improved from Q3.

Speaker #4: In the meantime, we are also working with our supply chain partners on continuous cost reduction and commercial negotiation efforts towards Q4. With that, we foresee the vehicle gross margin in Q4 to be around 18%.

Speaker #4: And for the ES8 in Q4, we also expect significant growth in its sales and delivery volume, with a very lucrative margin of over 20%.

Speaker #4: Then, the overall gross profit for the entire company will be significantly improved from Q3. In the meantime, we also see good financial performance of our non-car sales business, and we expect such momentum to continue into Q4.

William Li: ?????????????????Q3???????????????Q4???????????????????????????????????????????????????????????????????????????????Q4?????????????????????????????

Stanley Qu: In the meantime, we also see good financial performance of our non-car sales business, and we also expect such momentum to continue into Q4. We see improvement both in the sales revenue contributed by the non-vehicle business, as well as the gross margin improvement of that part. With that, the gross profit, be it vehicle gross profit or the non-vehicle gross profit, we'll also see improvement from Q3 to Q4.

[Translator]: In the meantime, we also see good financial performance of our non-car sales business, and we also expect such momentum to continue into Q4. We see improvement both in the sales revenue contributed by the non-vehicle business, as well as the gross margin improvement of that part. With that, the gross profit, be it vehicle gross profit or the non-vehicle gross profit, we'll also see improvement from Q3 to Q4.

Speaker #4: So we see both improvements in the sales revenue contributed by the non-vehicle business as well as the gross margin improvement of that part.

Speaker #4: With that, the gross profit beat vehicle gross profit, or the non-vehicle gross profit will also see improvement from Q3 to Q4. And in terms of expense and cost control, since this year we've been taking a series of actions to improve our operational efficiency and also our expense utilization, and we already see some good results from the Q3 financials.

William Li: ?????????????????Q3????????????????????????????????????Q4?????????????????????????????????????????????Q4???????????????????????????????????????????????????????????????

Stanley Qu: In terms of the expense and also cost control, since this year we've been taking a series of actions in improving our operational efficiency and also our expenses utilization, and we already see some good results from the Q3 financials. We will also continue such effort in Q4 in improving the SG&A expenses, as well as the R&D expenses and their efficiency. Especially in Q4, we don't expect any major or high-profile marketing or campaigns. In that case, we will be controlling our expenses in Q4 with our SG&A, as well as the R&D.

[Translator]: In terms of the expense and also cost control, since this year we've been taking a series of actions in improving our operational efficiency and also our expenses utilization, and we already see some good results from the Q3 financials. We will also continue such effort in Q4 in improving the SG&A expenses, as well as the R&D expenses and their efficiency. Especially in Q4, we don't expect any major or high-profile marketing or campaigns. In that case, we will be controlling our expenses in Q4 with our SG&A, as well as the R&D.

Speaker #4: And we will also continue such efforts in Q4 in improving the sales SG&A expenses as well as the R&D expenses and their efficiency. Especially in Q4, we don't expect any major or high-profile marketing or campaigns; in that case, we will be controlling our expenses in Q4 with our SG&A as well as the R&D.

William Li: ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Speaker #4: So, all summed up, our sales volume was affected by the phase-out of the trade-in and replacement subsidy. Yet, the gross profit is not majorly affected.

Stanley Qu: All sum up, our sales volume was affected by the phase-out of the trade-in and replacement subsidy, yet the gross profit is not majorly affected. In the meantime, we will continue our efforts in improving the efficiency and utilization of our investment and expenses. In that case, we expect also improved business results from Q4, and also have the confidence in achieving the quarterly break-even target.

[Translator]: All sum up, our sales volume was affected by the phase-out of the trade-in and replacement subsidy, yet the gross profit is not majorly affected. In the meantime, we will continue our efforts in improving the efficiency and utilization of our investment and expenses. In that case, we expect also improved business results from Q4, and also have the confidence in achieving the quarterly break-even target.

Speaker #4: In the meantime, we will continue our efforts in improving the efficiency and utilization of our investments and expenses. In that case, we expect also improved business results from Q4 and have confidence in achieving the quarterly break-even target.

Speaker #2: Thank you, team.

William Li: Thank you, Tim.

Stanley Qu: Thank you, Tim.

Speaker #3: Thank you so much, Ruili, for all the details. My second question is about our volume targets together with the new model schedule. Because I think back to previous quarters, the management mentions that we target like 50,000 monthly run rate in the fourth quarter.

Tim Xiao: Thank you so much, William, for all the details. My second question is about our volume targets together with the new model schedule. I think back to previous quarters, the management mentions that we target like 50,000 multi-run rate in Q4. If we are not going to achieve that, when can we achieve 50,000 multi-sales? Considering all the macro uncertainties, will NIO need to consider moving up the launch schedule of the new models to Q1 or earlier to bolster the sales momentum into next year? That's my second question. Thank you.

Tim Hsiao: Thank you so much, William, for all the details. My second question is about our volume targets together with the new model schedule. I think back to previous quarters, the management mentions that we target like 50,000 multi-run rate in Q4. If we are not going to achieve that, when can we achieve 50,000 multi-sales? Considering all the macro uncertainties, will NIO need to consider moving up the launch schedule of the new models to Q1 or earlier to bolster the sales momentum into next year? That's my second question. Thank you.

Speaker #3: So, if we are not going to achieve that, when can we achieve 50,000 monthly sales? Considering all the macro uncertainties, we need to explore moving up the launch schedule of the new models to the first quarter or earlier to bolster the sales momentum into next year.

Speaker #3: That's my second question. Thank

Speaker #3: you. Thank you for the

William Li: ??????????????????12???12.5????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????5?????????????????????????????????????????????????????????????????????????????5??????????????????????????????????????????????????????????????????????????????????????????Q2????????????Q3???????????????????????

Stanley Qu: Thank you for the question. As also previously mentioned in my remark, the guidance we provide for Q4 is 120,000 to 125,000 units. In terms of the adjustment on the guidance, as also explained, it's mainly because of the impact on the phase-out of the trade-in and the replacement subsidy. With that, we will not be able to see the year-end sales spike driven by the seasonality towards the end of the year. Especially, this will affect the sales of our cars that have already experienced their new car hype stage. This is also the challenge faced by the entire industry. Based on our current product lineup and also launch cadence, we do expect that sometime next year, in the first half of next year, we will achieve 50,000 monthly delivery.

[Translator]: Thank you for the question. As also previously mentioned in my remark, the guidance we provide for Q4 is 120,000 to 125,000 units. In terms of the adjustment on the guidance, as also explained, it's mainly because of the impact on the phase-out of the trade-in and the replacement subsidy. With that, we will not be able to see the year-end sales spike driven by the seasonality towards the end of the year. Especially, this will affect the sales of our cars that have already experienced their new car hype stage. This is also the challenge faced by the entire industry. Based on our current product lineup and also launch cadence, we do expect that sometime next year, in the first half of next year, we will achieve 50,000 monthly delivery.

Speaker #4: As also previously mentioned in my remark, the guidance we provide for Q4 is 120,000 to 125,000 units. In terms of the adjustment on the guidance, as also explained, it's mainly because of the impact on the phase-out of the trade-in and replacement subsidy.

Speaker #4: With that, we will not be able to see the year-end sales spike driven by the seasonality towards the end of the year. Especially, this will affect the sales of our cars that have already experienced their new car hype stage.

Speaker #4: But this is also the industry. Based on the challenges faced by our entire current product lineup and also our launch cadence, we do expect that sometime in the first half of next year, we will achieve 50,000 monthly deliveries.

Speaker #4: This is based on the consideration that we will be launching three large models next year, and also on the continuous improvement in our sales capacity, as well as our sales and marketing efficiency.

Stanley Qu: This is based on the consideration that we will be launching three large models next year, and also based on the continuous improvement in our sales capacity, and also our sales and marketing efficiency. We do see the opportunity of achieving more than 50,000 units per month somewhere in the first half of next year. In the meantime, we will also not just randomly change our new car launch cadence or plan simply because of short-term or temporary policy changes or impact. We will still keep our original launch cadence, that is to launch two new models in Q2 next year, and one new model in Q3 next year.

This is based on the consideration that we will be launching three large models next year, and also based on the continuous improvement in our sales capacity, and also our sales and marketing efficiency. We do see the opportunity of achieving more than 50,000 units per month somewhere in the first half of next year. In the meantime, we will also not just randomly change our new car launch cadence or plan simply because of short-term or temporary policy changes or impact. We will still keep our original launch cadence, that is to launch two new models in Q2 next year, and one new model in Q3 next year.

Speaker #4: So we do see the opportunity of achieving more than 50,000 units per month sometime in the first half of next year. In the meantime, we will also not just randomly change our new car launch cadence or plan simply because of short-term or temporary policy changes or impacts.

Speaker #4: We will still keep our original launch cadence, which is to launch two new models in Q2 next year and one new model in Q3 next year.

Speaker #4: year. Thanks.

William Li: Thanks. Thank you, William and San. Looking forward to the first break-even quarter, and more to come. Thank you.

Tim Hsiao: Thanks. Thank you, William and Stan. Looking forward to the first break-even quarter, and more to come. Thank you.

Speaker #3: Thank you, Ruili and Stan. Looking forward to the first break-even quarter and more to come. Thank you.

Speaker #3: you. Thank

Speaker #2: Thank you,

Tim Xiao: Thank you, Tim.

William Li: Thank you, Tim.

Speaker #2: team.

Speaker #3: You. Your next question comes from Paul Gong with UBS. Please go ahead.

Operator: Thank you. Your next question comes from Paul Gong with UBS. Please go ahead.

[Operator]: Thank you. Your next question comes from Paul Gong with UBS. Please go ahead.

Speaker #3: ahead.

Speaker #5: Hi, Ruili. Thanks for taking my call.

Paul Gong: Hi, William. Thanks for taking my question. My first question is regarding the 2026 outlook. Given there would be 5% of the purchase tax being levied on the EVs, how should we think about the company's preparation for such a policy change? Should we compensate for the customers for this amount and adjust it along the supply chain and internal cost control, or do we expect to let the consumers take the majority of their yields? This is my first question.

Speaker #5: My first question is regarding the 2026 outlook. Given that there would be a 5% purchase tax being levied on the EVs, how should we think about the company's preparation for such a policy change?

Speaker #5: Shall we compensate the customers for this amount and adjust it along the supply chain and internal cost control, or do you expect to let the consumers take the majority of the hits?

Speaker #5: This is my first

William Li: ???Paul??????????????????????????????????????????80%?90%?????????????????????????????????????????????????????????????EX8????????????????????????????????????????????EX8?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Speaker #4: Thank you for the question. Next year, the purchasing tax on new energy vehicles will be halved. Actually, the impact on us is less major in comparison to other new energy vehicle models and companies.

Stanley Qu: Thank you for the question. As next year, the purchasing tax on new energy vehicles will be halved. Actually, the impact on us is less major in comparison to other new energy vehicle models and also companies. As 80% to 90% of our users choose to buy the car while subscribing to the battery, in that case, the price of the battery is excluded from the tax base. In that case, our tax exemption is still more advantageous than other companies and also non-swappable models. In the meantime, for the popular products like the all-new ES8 with a very long waiting time for the deliveries and pickup, we are also the first car company to announce the purchasing tax guarantee for our users who have to pick up their cars next year. We have made this purchasing tax guarantee already at the launch of the ES8.

[Translator]: Thank you for the question. As next year, the purchasing tax on new energy vehicles will be halved. Actually, the impact on us is less major in comparison to other new energy vehicle models and also companies. As 80% to 90% of our users choose to buy the car while subscribing to the battery, in that case, the price of the battery is excluded from the tax base. In that case, our tax exemption is still more advantageous than other companies and also non-swappable models. In the meantime, for the popular products like the all-new ES8 with a very long waiting time for the deliveries and pickup, we are also the first car company to announce the purchasing tax guarantee for our users who have to pick up their cars next year. We have made this purchasing tax guarantee already at the launch of the ES8.

Speaker #4: As 80% to 90% of our users choose to buy the car while subscribing to the battery, in that case, the price of the battery is excluded from the tax base.

Speaker #4: In that case, our tax exemption is still more advantageous than other companies and also non-swappable models. In the meantime, for popular products like the all-new ES8, which has a very long waiting time for deliveries and pickup, we are also the first car company to announce the purchasing tax guarantee for our users who have to pick up their cars next year.

Speaker #4: We have made this purchasing tax guarantee already at the launch of the ES8. For other products and models, as their waiting time is not as long as the all-new ES8, so far we don't have the guarantee policy for other models.

Stanley Qu: For other products and models, as their waiting time is not as long as the all-new ES8, so far we don't have the guarantee policy for other models. As for the specific measures that we are going to take in the face of the purchasing tax changes next year, well, it highly depends on the dynamics of the market, the landscape of the competition, and also the practices of other peers. We will keep flexibility in our measures, and also policies. Currently, we don't have a very specific plan.

For other products and models, as their waiting time is not as long as the all-new ES8, so far we don't have the guarantee policy for other models. As for the specific measures that we are going to take in the face of the purchasing tax changes next year, well, it highly depends on the dynamics of the market, the landscape of the competition, and also the practices of other peers. We will keep flexibility in our measures, and also policies. Currently, we don't have a very specific plan.

Speaker #4: As for the specific measures that we are going to take in the face of the purchasing tax changes next year, well, it highly depends on the dynamics of the market, the landscape of the competition, and also the practices of other peers.

Speaker #4: So we will keep flexibility in our measures and also policies. But currently, we don't have a very specific plan. In the meantime, we also see that the entire industry, including the public and users, are gradually digesting the phased-out purchasing tax policies on the new energy vehicles.

William Li: ????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????1?10?????????????????????????????????????????????????????????????????????????????????????

Stanley Qu: In the meantime, we also see that the entire industry, including the public and users, are gradually digesting the phase-out of the purchasing tax policies on new energy vehicles. Especially right now, if we look at the smart EV industry in China, it is now less policy-driven, as the actual user experience and also the cost advantage of battery electric vehicles are more evident and also becoming more attractive to the users. In the first 10 months of this year, the sales volume growth of the BEV actually increased significantly. This also gave us the confidence in continuing such momentum. There will be impact from the purchasing tax phase-out, but it will be very limited.

[Translator]: In the meantime, we also see that the entire industry, including the public and users, are gradually digesting the phase-out of the purchasing tax policies on new energy vehicles. Especially right now, if we look at the smart EV industry in China, it is now less policy-driven, as the actual user experience and also the cost advantage of battery electric vehicles are more evident and also becoming more attractive to the users. In the first 10 months of this year, the sales volume growth of the BEV actually increased significantly. This also gave us the confidence in continuing such momentum. There will be impact from the purchasing tax phase-out, but it will be very limited.

Speaker #4: Especially right now, if we look at the smart EV industry in China, it is now less policy-driven, as the actual user experience and the cost advantage of battery electric vehicles are more evident and also becoming more attractive to the users.

Speaker #4: In the first 10 months of this year, the sales volume growth of the bat actually increased significantly. This also gave us the confidence in continuing such momentum.

Speaker #4: So, there will be an impact from the purchasing tax phased out, but it will be very limited.

Speaker #5: Thanks. My second question is regarding expense control. We have already seen quite some cost reduction, especially from R&D in Q3. Per your guidance, Q4 should see further efficiency improvement there.

Paul Gong: Thanks. My second question is regarding the expense control. We have already seen quite some cost reduction, especially for the R&D in Q3. Per your guidance, Q4 should see further efficiency improvement there. Heading into 2026, should we expect the lower cost structure on the expense side to stay as a constant and new normal? I.e., should we expect like low RMB 2 billion something for the R&D per quarter, and around RMB 4 billion or even lower than RMB 4 billion on the SG&A per quarter?

Speaker #5: Heading into 2026, shall we expect the lower cost structure on the expense side to stay as constant and near normal? I.e., shall we expect low to $1 billion something for the R&D per quarter and around $4 billion or even lower than $4 billion on the SG&A per quarter?

William Li: quarters can support our company's competitiveness in models and key technology areas.

Speaker #4: Thank you for the question. As mentioned, in Q3, our R&D expenses are around ¥2 billion on a non-GAAP basis. Also, for Q4 and the next year, we expect our quarterly R&D expenses to be flat.

Stanley Qu: Thank you for the question. As mentioned, in Q3, our R&D expenses is around RMB 2 billion on the non-GAAP basis. For Q4 and the next year, we expect our quarterly R&D expenses to be flat, also around RMB 2 billion per quarter. So far, we do not have any plan to dial back on the R&D expenses. In the meantime, we will focus more on improving the efficiency of our R&D activities, especially leveraging our sole business unit mechanism. We will make full use of the output of this RMB 2 billion R&D investment every quarter. Inside the company, for the project initiation and approval, we have established the ROI evaluation mechanism. We also have the closed loop with the project review and improvement.

[Translator]: Thank you for the question. As mentioned, in Q3, our R&D expenses is around RMB 2 billion on the non-GAAP basis. For Q4 and the next year, we expect our quarterly R&D expenses to be flat, also around RMB 2 billion per quarter. So far, we do not have any plan to dial back on the R&D expenses. In the meantime, we will focus more on improving the efficiency of our R&D activities, especially leveraging our sole business unit mechanism. We will make full use of the output of this RMB 2 billion R&D investment every quarter. Inside the company, for the project initiation and approval, we have established the ROI evaluation mechanism. We also have the closed loop with the project review and improvement.

Speaker #4: Also, around $2 billion per quarter. So far, we don't have any plans to dial back on the R&D expenses. In the meantime, we will focus more on improving the efficiency of our R&D activities.

Speaker #4: Especially leveraging our sales business unit mechanism, we will make full use of the output of this $2 billion R&D investment every quarter. Inside the company, for the project initiation and approval, we have established the ROI evaluation mechanism.

Speaker #4: We also have the closed loop with the project review and improvement. By continuing such efforts, we believe that at ¥2 billion per quarter in R&D, we will be maintaining our existing product development as well as the key technology development, without compromising the competitiveness of the entire company.

Stanley Qu: By continuing such efforts, we believe that at RMB 2 billion per quarter in R&D, we will be maintaining our existing product development, as well as the key technology development, without compromising on the competitiveness of the entire company.

By continuing such efforts, we believe that at RMB 2 billion per quarter in R&D, we will be maintaining our existing product development, as well as the key technology development, without compromising on the competitiveness of the entire company.

William Li: to improve sales efficiency. Overall, an SG&A ratio of around 10% as a percentage of sales expenses remains our target for the next few quarters.

Speaker #4: And in terms of the SG&A expenses and its percentage to the sales revenue, as in Q4, based on the sales volume guidance, we have lowered our volume from the 50,000 units per month base. In that case, originally, our target is to achieve a 10% ratio between SG&A and the sales revenue.

Stanley Qu: In terms of the SG&A expenses and its percentage to the sales revenue, as in Q4, based on the sales volume guidance, we have lowered our volume from 50,000 units per month. We have lowered from that base. In that case, originally our target is to achieve a 10% ratio between SG&A and the sales revenue, and now it's around 12%. In Q4, we will also be keeping that level. This is against the overall background of achieving the quarterly breaking even in Q4. In terms of the absolute amount, that's around RMB 4 billion per quarter, as you mentioned. Next year, we will focus on improving our efficiency in sales and also overall activities. Overall, we believe that 10% between SG&A to the total sales revenue should be a reasonable target for us to achieve.

[Translator]: In terms of the SG&A expenses and its percentage to the sales revenue, as in Q4, based on the sales volume guidance, we have lowered our volume from 50,000 units per month. We have lowered from that base. In that case, originally our target is to achieve a 10% ratio between SG&A and the sales revenue, and now it's around 12%. In Q4, we will also be keeping that level. This is against the overall background of achieving the quarterly breaking even in Q4. In terms of the absolute amount, that's around RMB 4 billion per quarter, as you mentioned. Next year, we will focus on improving our efficiency in sales and also overall activities. Overall, we believe that 10% between SG&A to the total sales revenue should be a reasonable target for us to achieve.

Speaker #4: And now it's around 12%. In Q4, we will also be keeping that level. However, this is against the overall background of achieving quarterly breakeven in Q4.

Speaker #4: And in terms of the absolute amount, that's around $4 billion per quarter, as you mentioned. Next year, we will focus on improving our efficiency in sales and overall activities.

Speaker #4: Overall, we believe that 10% of SG&A to total sales revenue should be a reasonable target for us to achieve.

William Li: Thank you, Paul.

Speaker #5: Thank you, William, and thank you, Stanley. I’m looking forward to more efficient operations going forward.

Paul Gong: Thank you, William and San. Looking forward for more efficient operation going forward.

Paul Gong: Thank you, William and Stanley. Looking forward for more efficient operation going forward.

Speaker #2: Thank you. Your next question comes from Nick Lai. With JP Morgan, please go ahead.

Operator: Thank you. Your next question comes from Nick Lai with JP Morgan. Please go ahead.

[Operator]: Thank you. Your next question comes from Nick Lai with JPMorgan. Please go ahead.

Speaker #2: ahead. Yes.

Nick Lai: Yes, this is Nick from JP Morgan. Thank you for taking my question. The first question is actually question.

Speaker #6: This is Nick from Bill Morgan. Thank you for taking my question. The first question is actually...

Speaker #6: question. Sorry to interrupt. Can you

Operator: Sorry to interrupt.

[Operator]: Sorry to interrupt. I'm really sorry to interrupt, Nick. Your line is not that clear. Okay, is it better right now?

Nick Lai: I'm really sorry to interrupt, Nick. Your line is not that clear. Okay, is it better right now?

Speaker #6: continue? I'm really sorry to

Speaker #2: Interrupt, Nick. Your line is not that clear.

Speaker #6: Okay. It's better right now?

William Li: Hi, operator. Nick, go ahead.

Nick Lai: Hello?

Speaker #2: Yeah. Nick, go ahead,

William Li: Yeah, Nick, go ahead, please.

Speaker #6: Okay. Can you hear me right now? Yeah. So thank you. My first question is really about the possibility into 2026. Based on William Li's comment earlier, for Q2 next year we have three new models and monthly sales likely hitting 50,000 units. Stanley Qu also mentioned that the expense ratio will essentially be 10.

Nick Lai: Okay. Can you hear me right now? Yeah. Thank you. My first question is really about the possibility into 2026. Based on William's comment earlier, from second quarter onward next year, we have a three-new model, and most of those likely hitting 50,000 units. Stanley also mentioned that expense ratio or expense should be content. With all this comment, is it fair to say that asset on fall to 25 break even? Next year, for the full year, or at least in second half next year, likely possibility should also be very strong. That's my first question. I.e., how should we think about possibility in 2026?

Speaker #6: So, with all this coming, is it fair to say that aside from a break-even in Q4, the potential for the full year next year, or at least in the second half of next year, looks very strong?

Speaker #6: That's my first question. I.e., how should we think about the possibility in...

Speaker #6: 2026? Thank you for the

William Li: ?? Nick????????????????????????????????????????????????????????????????????????? non-GAAP???????? non-GAAP ????????????????????????????????????????????????????? 2025 ??????????????????????????????????????????? ???????????????BEV ????BEV ???????????? 26%??? REEV ? PHEV ??????????????REEV ??? PHEV ???? 12% ? 7%????? BEV ?????????????????? NEV ???????????????? 55%???????????????BEV ????????? 33%????????? 3% ????????? 10 ?????BEV ???????? 13%??????????? 13%?????????????????????? ?????? 300,000 ???????????????????? BEV ???????????????????????????????????? 300,000 ????????????????????????????????????????????????????????????????BEV ???????????????? BEV ????? 300,000 ??????? 12%?????????? 18%????????????300,000 ?????? BEV ??????? 33%????????????? 10%? ?????????????????? SUV ?????????? 9 ????????????10 ????????10 ???????? SUV ??????????? 39,000??????? 24,000?????????

Stanley Qu: Thank you for the question. Actually, for the full year, our business target is to achieve profit for the full year 2026 on the non-GAAP basis. We do see confidence in achieving this profitability target for next year, non-GAAP, as we basically look at this from both market trend perspective, as well as the relative competitiveness of our product and services. Here are some insights into the market and the trends over the past one year or so. We will be mainly looking at the penetration rate of the battery electric vehicle in the premium segment, and also more specifically in the large three-row SUV market. In Q3, the sales volume of BEV increased by 26% quarter over quarter, while for REEV and PHEV, the sales volume actually decreased by 12% and 7% quarter over quarter.

[Translator]: Thank you for the question. Actually, for the full year, our business target is to achieve profit for the full year 2026 on the non-GAAP basis. We do see confidence in achieving this profitability target for next year, non-GAAP, as we basically look at this from both market trend perspective, as well as the relative competitiveness of our product and services. Here are some insights into the market and the trends over the past one year or so. We will be mainly looking at the penetration rate of the battery electric vehicle in the premium segment, and also more specifically in the large three-row SUV market. In Q3, the sales volume of BEV increased by 26% quarter over quarter, while for REEV and PHEV, the sales volume actually decreased by 12% and 7% quarter over quarter.

Speaker #4: Actually, for the full year, our business target is to achieve profit for the full year 2026 on a non-GAAP basis. We do see confidence in achieving this profitability target for next year, non-GAAP, as we basically look at this from both a market trend perspective as well as the relative competitiveness of our products and services.

Speaker #4: Here are some insights into the market and the trends over the past year or so. We will be mainly looking at the penetration rate of battery electric vehicles in the premium segment and, more specifically, in the large railroad SUV market.

Speaker #4: In Q3, the sales volume of BEV increased by 26% quarter over quarter, while for REV and PHIVE, the sales volume only increased by 12% and 7%, respectively.

Speaker #4: Well, actually, it decreased by 12% and 7% quarter over quarter. If we look at the entire new energy vehicle market, the penetration rate has reached 55% in Q3.

Stanley Qu: If we look at the entire new energy vehicle market, the penetration rate has reached 55% in Q3. This is majorly powered by the growth in the battery electric vehicle. In the first three quarters, the sales volume of BEV has increased by 33%, while for REEV, it's only 3%. More specifically, in October, the BEV sales volume increased by 13%, while for the REEV, it decreased by 13%. This is also showing how well received and adopted the BEV model is. More specifically, on the premium segment, priced above RMB 300,000, this is where our new brand and our products are in. For the BEV, it used to be at a relatively low penetration rate, but we do see a trend of improving that penetration. This also gives a huge opportunity for enlarging our penetration and market share in that segment.

If we look at the entire new energy vehicle market, the penetration rate has reached 55% in Q3. This is majorly powered by the growth in the battery electric vehicle. In the first three quarters, the sales volume of BEV has increased by 33%, while for REEV, it's only 3%. More specifically, in October, the BEV sales volume increased by 13%, while for the REEV, it decreased by 13%. This is also showing how well received and adopted the BEV model is. More specifically, on the premium segment, priced above RMB 300,000, this is where our new brand and our products are in. For the BEV, it used to be at a relatively low penetration rate, but we do see a trend of improving that penetration. This also gives a huge opportunity for enlarging our penetration and market share in that segment.

Speaker #4: And this is majorly powered by the growth in battery electric vehicles. In the first three quarters, the sales volume of BEVs has increased by 33%, while for REVs, it's only 3%.

Speaker #4: And more specifically in October, the BEV sales volume increased by 13%, while for the REV, it decreased by 13%. So this is also the showing how well-received and how well-received and adopted the BEV model is.

Speaker #4: And more specifically on the premium segment, priced above 300,000 RMB, this is where our new brand and our products are in. For the BEV, it's still at it used to be at a relatively low penetration rate, but we do see a trend of improving that penetration.

Speaker #4: This also gives a huge opportunity for enlarging our penetration and market share in that segment for this year, especially as we see the trend where premium battery electric vehicle products are increasingly being received by users.

Stanley Qu: For this year especially, we see the trend where the premium battery electric vehicle products are more and more received by the users. We have already seen the awareness and also the upside for such products. This has powered the increase in the penetration rate of this product. For the full year last year, the penetration rate of the battery electric vehicle in the premium segment was only 12%, but in Q3 this year, it's already 18%. In the first three quarters, the penetration rate of BEV has increased by 33%, yet for the range-extended vehicles, it actually decreased by 10%. More specifically, for the large three-row SUV segment, the sales volume of BEV took the first place for the first time in September, and it continued such momentum in October.

For this year especially, we see the trend where the premium battery electric vehicle products are more and more received by the users. We have already seen the awareness and also the upside for such products. This has powered the increase in the penetration rate of this product. For the full year last year, the penetration rate of the battery electric vehicle in the premium segment was only 12%, but in Q3 this year, it's already 18%. In the first three quarters, the penetration rate of BEV has increased by 33%, yet for the range-extended vehicles, it actually decreased by 10%. More specifically, for the large three-row SUV segment, the sales volume of BEV took the first place for the first time in September, and it continued such momentum in October.

Speaker #4: We have already seen the awareness and also the upside for such products, and this has powered the increase in the penetration rate of this product.

Speaker #4: For the full year last year, the penetration rate of battery electric vehicles in the premium segment was only 12%, but in Q3 this year, it's already 18%.

Speaker #4: And in the first three quarters, the penetration rate of BEVs has increased by 33%, yet for the range-extended vehicles, it actually decreased by 10%.

Speaker #4: And more specifically for the large railroad SUV segment, the sales volume of BEVs took first place for the first time in September, and it continued this momentum in October.

Speaker #4: In October, we saw the total volume of BEV registrations was around 39,000 units, while for REV, that was only 24,000 units.

Stanley Qu: In October, we see the total volume of BEV registration was around 39,000 units, while for REEV, that was only 24,000 units.

In October, we see the total volume of BEV registration was around 39,000 units, while for REEV, that was only 24,000 units.

Speaker #2: ?????????????????? L90 ??? ES8 ???????????????????????????????????????????????????????? SUV ???????????????????? BEV ?????? 146%?? REV ????? 19%??? penetration ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????

William Li: vehicles, combined with our product advantages and the advantages of our charging and battery swap infrastructure and network.

Speaker #4: Regarding the sales volume and outlook for next year, as for the AWO L90 and also the new AWO ES8, we will still continue to focus on these two products, which are relatively new to the market. Plus, we are going to introduce another three new large models, so we will be having five new large models available to the market next year, under the new AWO brand.

Stanley Qu: Regarding the sales volume and outlook for next year, as for the L90 and also the new ES8, next year we will still continue the buzz around these two products, relatively new to the market. Plus, we are going to introduce another three new large models. We will be having five new large models available to the market next year from the NIO and ONVO brand. If we look at the mid to large and also the large SUV segments where our new models will be targeting, in Q3, the sales volume of BEV models increased by 146%, while for REEV, it's only 19%. As I've mentioned, the overall penetration rate of BEV among the premium large vehicle models is still relatively low, which means that we do have huge opportunities and potential in this segment.

[Translator]: Regarding the sales volume and outlook for next year, as for the L90 and also the new ES8, next year we will still continue the buzz around these two products, relatively new to the market. Plus, we are going to introduce another three new large models. We will be having five new large models available to the market next year from the NIO and ONVO brand. If we look at the mid to large and also the large SUV segments where our new models will be targeting, in Q3, the sales volume of BEV models increased by 146%, while for REEV, it's only 19%. As I've mentioned, the overall penetration rate of BEV among the premium large vehicle models is still relatively low, which means that we do have huge opportunities and potential in this segment.

Speaker #4: And if we look at the mid to large and also the large SUV segments, where our new models will be targeting, in Q3, the sales volume of BEV models increased by 146%, while for REV, it's only 19%.

Speaker #4: But as I've mentioned, the overall penetration rate of BEV among the premium large vehicle models is still relatively low, which means that we have huge opportunities and potential in this segment.

Stanley Qu: Overall speaking, our product launch cadence is in line with the market shift and also the trend, especially considering our large models are also competitive in both products, as well as the charging and swapping experience.

[Translator]: Overall speaking, our product launch cadence is in line with the market shift and also the trend, especially considering our large models are also competitive in both products, as well as the charging and swapping experience.

Speaker #4: Launch cadence is in line with the overall speaking. Our product market shifts and also the trend, especially considering our large models, are also competitive in both products as well as the charging and swapping experience.

Speaker #2: ?????????????????????????????????????????????????????????????????????? 20% ?????????????????????????????????????????????????????????????????????????? CBO ????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? BEV ???? 30 ????????????????????????????????????????????? 20% ???????????????????

Speaker #2: ?????????????????????????????????????????????????????????????????????? 20% ?????????????????????????????????????????????????????????????????????????????????? CBO ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? BEV ???? 30 ??????????????????????????????????????????????? 20% ???????????????? mix ???????????????????????????????????????????????????????????????????????????????????????????????

William Li: profitability next year, making this our goal, is still something our entire team has the opportunity to achieve.

Speaker #4: And also for these five large models, they will contribute the major sales volume among all of our products. As they are high-margin products, they will also contribute more significantly to the vehicle gross margin. Next year, we expect the vehicle gross margin to be around 20%.

Stanley Qu: For these five large models, they will also contribute the major sales volume among all of our products. As they are high margin products, they will also contribute more significantly to the vehicle gross margin. With that, next year we expect the vehicle gross margin to be around 20%. That is the further improvement on top of our existing gross margin for Q3 and also outlook for Q4. This result will be dependent also on the continuous cost optimization efforts together with our supply chain partners. In terms of expenses, as we have rolled out this sale business unit mechanism, we have tightened our control over expenses. We already see some good results, and we will continue such efforts next year in controlling the R&D and also SG&A expenses.

[Translator]: For these five large models, they will also contribute the major sales volume among all of our products. As they are high margin products, they will also contribute more significantly to the vehicle gross margin. With that, next year we expect the vehicle gross margin to be around 20%. That is the further improvement on top of our existing gross margin for Q3 and also outlook for Q4. This result will be dependent also on the continuous cost optimization efforts together with our supply chain partners. In terms of expenses, as we have rolled out this sale business unit mechanism, we have tightened our control over expenses. We already see some good results, and we will continue such efforts next year in controlling the R&D and also SG&A expenses.

Speaker #4: further improvement on top of our That is the existing gross margin for Q3 and also outlook for Q4. But also this result will be dependent also on the continuous cost optimization efforts together with our supply chain partners.

Speaker #4: And in terms of the expenses, as we have rolled out this cell business unit mechanism, we have tightened our control over expenses. We already see some good results, and we will continue such efforts next year in controlling the R&D and also for SG&A expenses.

Stanley Qu: For our large vehicle models, based on its strong market performance and demand, it already proves that with the right product definition, and also with our unique advantages in battery swap, we do can capture a decent market share in that segment. In the meantime, we also see a positive trend, and also huge potential for the battery electric vehicles to take up a higher market share, and also penetration among large models, and also premium models. Thirdly, we have confidence in achieving the product gross margin of 20%, plus our continuous efforts on the cost and expenses control. With all that combined, we think that achieving full year profitability on the non-GAAP basis for the year of 2026 is a reasonable target for the team.

Speaker #4: Our large vehicle models, based on their strong market performance and demand, have already proven that with the right product definition and our unique advantages in battery swap, we can capture a decent market share in that segment.

For our large vehicle models, based on its strong market performance and demand, it already proves that with the right product definition, and also with our unique advantages in battery swap, we do can capture a decent market share in that segment. In the meantime, we also see a positive trend, and also huge potential for the battery electric vehicles to take up a higher market share, and also penetration among large models, and also premium models. Thirdly, we have confidence in achieving the product gross margin of 20%, plus our continuous efforts on the cost and expenses control. With all that combined, we think that achieving full year profitability on the non-GAAP basis for the year of 2026 is a reasonable target for the team.

Speaker #4: the meantime, we also see a And in positive trend and also huge potential for the battery electric vehicles to take up a higher market share and also penetration among large models and also premium models.

Speaker #4: also thirdly, we have And confidence in achieving the product gross margin of 20%, plus our continuous efforts on the cost and expenses control with all that combined, we think that achieving a full year profit goal or achieving a full year profitability on the long gap basis for the year of 2026 is a reasonable team.

Speaker #2: Thank you, Ni. My second question is more about the choice between in-house chips versus NVIDIA. Can you remind us what our long-term strategy is regarding in-house development and outsourcing? What are the pros and cons of these two strategies?

Operator: Thank you, Ni. Thank you for your answer. Certainly, I think it's an exciting outcome for next year. My second question is more about the choice between in-house chip against NVIDIA. Can you remind us what is our long-term strategy between in-sourcing and out-sourcing, and what is the pros and cons between these two strategies?

Nick Lai: Thank you, Ni. Thank you for your answer. Certainly, I think it's an exciting outcome for next year. My second question is more about the choice between in-house chip against NVIDIA. Can you remind us what is our long-term strategy between in-sourcing and out-sourcing, and what is the pros and cons between these two strategies?

Speaker #3: 我们在我们的成绩 9031 是全球第一颗车规 5 纳米的芯片，我们比同行的旗舰芯片全球的同行的旗舰芯片要少 6

William Li: ???????? NX9031 ???????? 5 ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Speaker #4: Thank you for the

Stanley Qu: Thank you for the question. Our NX9031 is the first smart driving chip made also 5 nanometer process, and its tape-out mass production application on the car and also full stack operations were all earlier than the competitors of the similar performance in the industry. We also see how this in-house developed chip is contributing to both performance improvement, as well as the cost structure optimization. For the long term, we will continue our investments and also efforts in the chip-related technologies.

[Translator]: Thank you for the question. Our NX9031 is the first smart driving chip made also 5 nanometer process, and its tape-out mass production application on the car and also full stack operations were all earlier than the competitors of the similar performance in the industry. We also see how this in-house developed chip is contributing to both performance improvement, as well as the cost structure optimization. For the long term, we will continue our investments and also efforts in the chip-related technologies.

Speaker #4: is the first smart driving 片，少量产，少上车，少全占把它跑通。所以我们当然会我们的芯片的团队已经证明了我们的能力，对于我们的性能的改善，自驾相关的性能的改善，我们的性能的竞争力，还有我们的成本都是有非常大的好处的。当然长期我们会坚持在这个领域持续的进行投入。当然我们看到了芯片，其实我们也是大家最近也看到的一些消息，我们也在和我们的合作伙伴一起希望能够把我们的这样一些自驾的芯片能开放给整个行业去使用。这个也包括一些非车的行业，比如说一些端侧的这样的一些推理的大算力的这样的一个芯片的端侧的芯片，其实使用场景是非常多的，比如说在机器人上面就有很大的一个这样的一个使用的场景。我们也在跟合作伙伴一起希望能够把我们这样的一些芯片能够给到更多的场景中去进行使用。 chip made of 5 nanometer question. Our NX 9031 process, and its tape-out mass and also full-back operations production application on the car were all earlier than the competitors of the similar performance in the industry.

Speaker #4: This in-house developed chip is contributing to both performance improvement as well as the cost structure. We also see efforts in the chip-related technologies.

Speaker #4: And in the meantime, we will continue our investments. Maybe you have also noticed that we recently announced a partnership where we are going to share our chip solution and the technologies with more industry players.

Stanley Qu: Maybe you have also noticed that recently we have announced a partnership where we are going to share our chip solution and the technologies to more industry players, both from the automotive industry as well as from the non-automotive industry, as we do see a good potential of applying this high computing power resonator chip on different types of devices, for example, on robots. We will work with our tech partners together to explore more use cases and also application scenarios of our chip.

Maybe you have also noticed that recently we have announced a partnership where we are going to share our chip solution and the technologies to more industry players, both from the automotive industry as well as from the non-automotive industry, as we do see a good potential of applying this high computing power resonator chip on different types of devices, for example, on robots. We will work with our tech partners together to explore more use cases and also application scenarios of our chip.

Speaker #4: Those from the automotive industry as well as from the non-automotive industry, as we do see a good potential of applying this high computing power revenue chip on different types of devices, for example, on robots.

Speaker #4: So we will work with our tech partners together to explore more use cases and also application

Speaker #4: chip. Thank you very

Operator: Thank you. Very clear. Thank you, indeed.

Nick Lai: Thank you. Very clear. Thank you, indeed.

Speaker #2: Clear. Thank you indeed. Thank you.

William Li: Thank you, Ni.

Stanley Qu: Thank you, Nick.

Speaker #3: Nik.

Speaker #1: Thank

Speaker #1: You. Your next question comes from Ben Wong from Deutsche Bank. Please go ahead.

Operator: Thank you. Your next question comes from Ben Wong from Deutsche Bank. Please go ahead.

[Operator]: Thank you. Your next question comes from Benjamin Wong from Deutsche Bank. Please go ahead.

Operator: Thank you. The first question is about the margin in the third quarter. It clearly has a big margin drop by 4.4%, but it's just explained because of cost reduction. It seems not just enough. You say because of the mix because NR90 has been volume contribution more than 20,000 units. Can you break down about the margin driver? How much came from the margin from the onboard LID? How much from the cost reduction? Really, cost reduction was the key item you actually got a cost job in the number three quarter. Thank you.

Benjamin Wong: Thank you. The first question is about the margin in the third quarter. It clearly has a big margin drop by 4.4%, but it's just explained because of cost reduction. It seems not just enough. You say because of the mix because NR90 has been volume contribution more than 20,000 units. Can you break down about the margin driver? How much came from the margin from the onboard LID? How much from the cost reduction? Really, cost reduction was the key item you actually got a cost job in the number three quarter. Thank you.

Speaker #2: First question is about the margin in the Thank You. The third quarter clearly has big improvements. Could you explain why the margin jumped by 4.4%?

Speaker #2: the mix because an LIT has been volume contribution more than 20,000 You say because of about the margin driver, how much came So can you break down from the margin from the overall LIT, how much from the cost reduction?

Speaker #2: Of job in the number three quarter. Thank the key item you actually got the cost. Really, construction was you.

Speaker #3: Hi.

William Li: breakdown, we can look at it offline later. This is roughly the composition.

Stanley Qu: Thank you for the question. As you've mentioned, our vehicle gross margin result in Q3 and the improvement from the previous quarter is majorly driven by two factors. The first is the cost reduction contributed by the supply chain, driven by the increase in our sales volume. The second factor is the sales and delivery of the L90, which is a high margin product that we have started to deliver from Q3. In comparison to Q2, we have delivered more than 20,000 L90, contributing better margin performance than the L60 in the previous quarters. These are two major drivers of the gross margin improvement in Q3. As for the specific breakdowns, I will also share more information offline with you.

[Translator]: Thank you for the question. As you've mentioned, our vehicle gross margin result in Q3 and the improvement from the previous quarter is majorly driven by two factors. The first is the cost reduction contributed by the supply chain, driven by the increase in our sales volume. The second factor is the sales and delivery of the L90, which is a high margin product that we have started to deliver from Q3. In comparison to Q2, we have delivered more than 20,000 L90, contributing better margin performance than the L60 in the previous quarters. These are two major drivers of the gross margin improvement in Q3. As for the specific breakdowns, I will also share more information offline with you.

Speaker #4: question. our vehicle gross margin As you've mentioned, Thank you for the without in Q3 and the improvement from the previous quarter is majorly driven by two factors.

Speaker #4: Reduction contributed by the supply. The first is the cost in our sales volume. The second factor is the sales and chain driven by the increase, which is a high-margin product that we have started to deliver from the delivery of the L90 in Q3, in comparison to Q2.

Speaker #4: have delivered more than

Speaker #4: Margin performance, along with the L60, are two major drivers of the gross margin improvement in Q3, compared to the previous quarters. As for the specific breakdowns, I will share more information offline with you, noting that we have 20,000 L90 contributing better.

Speaker #3: ???????????????????? William ??????????? ES8????????????????????????? 20%?? 5566 ????????????????????????????????????????????????? 25%??????? 6655 ????? 15% ? 20% ????? L90 ?????? 15% ? 20% ???????????????????????????? L90?

William Li: ???????????????????? William ??????????? ES8????????????????????????? 20%?? 5566 ????????????????????????????????????????????????? 25%?????? 55 ????? 15% ? 20% ????? L90 ?????? 15% ? 20% ???????????????????????????? L90 ??????????????

Speaker #4: But here I can share with you some of the performance model by model. For the vehicle margin of the new ES8, as mentioned by William, the vehicle margin is 20%.

Stanley Qu: Here I can share with you some of the vehicle margin performance model by model. For the new ES8, as mentioned by William, the vehicle margin is 20%. We did not start the delivery of ES8 until late Q3, so its actual contribution on the volume side is relatively small. For the ET5, ET5T, their vehicle gross margin is between 15% and 20%. For ES6 and ET6, their vehicle gross margin is over 20% and even reaching 25%. As these are already products being in the market for a while, we have already worn off the new car bust on these models. For the L90, its vehicle margin is around 15% to 20%. Overall speaking, for the new models plus the onboard L90, they do have a pretty good vehicle margin performance.

[Translator]: Here I can share with you some of the vehicle margin performance model by model. For the new ES8, as mentioned by William, the vehicle margin is 20%. We did not start the delivery of ES8 until late Q3, so its actual contribution on the volume side is relatively small. For the ET5, ET5T, their vehicle gross margin is between 15% and 20%. For ES6 and ET6, their vehicle gross margin is over 20% and even reaching 25%. As these are already products being in the market for a while, we have already worn off the new car bust on these models. For the L90, its vehicle margin is around 15% to 20%. Overall speaking, for the new models plus the onboard L90, they do have a pretty good vehicle margin performance.

Speaker #4: Late in Q3, so its actual contribution on the volume side is relatively small. Of course, we didn't start the ET5 and ET5T. Their vehicle gross margin is between 15% to 20%.

Speaker #4: And for ES6 and EC6, their vehicle gross margin is over 20% to 25%, as these are already established products that have been in the market for a while.

Speaker #4: The car bus on this model. We have already gone off the new 15% to 20%. So, overall speaking, for the new models plus the L90, they do have a pretty good vehicle margin performance.

Speaker #2: Thank you. My second question is about your latest chip joint venture with Accelera. This may be a natural shareholder with a 36.4% stake in the company. So, my question is, number one, why are you choosing this partner, Accelera, from Chongqing?

Operator: Thank you. My second question about your latest chip joint venture with Accelra. This is maybe a natural shareholder with 36.4% stake in the company. My question is, number one, why are you choosing this partner, Accelra, from Chongqing? Why not somebody else? Secondly, what's the business model about this joint venture? Is it just a sales company? Actually, you really made a joint venture to make a chip by themselves. Meanwhile, do you actually get any license fee ink already from this joint venture? This seems to be with your chips. Thank you.

Benjamin Wong: Thank you. My second question about your latest chip joint venture with Accelra. This is maybe a natural shareholder with 36.4% stake in the company. My question is, number one, why are you choosing this partner, Accelra, from Chongqing? Why not somebody else? Secondly, what's the business model about this joint venture? Is it just a sales company? Actually, you really made a joint venture to make a chip by themselves. Meanwhile, do you actually get any license fee ink already from this joint venture? This seems to be with your chips. Thank you.

Speaker #2: Why is it not somebody else? Secondly, what's the business model about this joint venture? Is it actually you really made this joint, or is it just a sales company?

Speaker #2: License fee income already from this joint venture? Because this seems to be, we'll sell your chips. Thank you.

William Li: ?????????????????????JV??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????Q1????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Speaker #4: Well, thank you for the question. Yes, Sun Media has covered the establishment of this chip joint venture. We are also leveraging our partners in this joint venture to sell our chips and our IC design capabilities to other clients and potential users.

Stanley Qu: Well, thank you for the question. Yes, Sun Media has covered the establishment of this chip joint venture. We are leveraging our partners of this joint venture to sell our chip and our IC design capabilities to other clients and potential users. This is not an exclusive partnership. We still have the possibility and the opportunities to sell our chip solution and product to other partners and companies from our side. That is one part of the way to sell that solution. We can also leverage our partners' resources to provide our chip solution to other car companies or other clients, and they will be acting as a tier one providing such a solution. In the meantime, as mentioned, we also see opportunities of applying such chip in the non-car or the non-automotive industry.

[Translator]: Well, thank you for the question. Yes, Sun Media has covered the establishment of this chip joint venture. We are leveraging our partners of this joint venture to sell our chip and our IC design capabilities to other clients and potential users. This is not an exclusive partnership. We still have the possibility and the opportunities to sell our chip solution and product to other partners and companies from our side. That is one part of the way to sell that solution. We can also leverage our partners' resources to provide our chip solution to other car companies or other clients, and they will be acting as a tier one providing such a solution. In the meantime, as mentioned, we also see opportunities of applying such chip in the non-car or the non-automotive industry.

Speaker #4: But this is not an exclusive partnership. We also have the opportunity to sell our chip solution and product; we still have the possibility from our side.

Speaker #4: So that's one part of the way to sell that solution. We can also leverage to other partners and companies our partner's resources to provide our chip solution to other car companies or other clients and they will be acting as a tier one providing such a solution.

Speaker #4: In the meantime, as mentioned, we also see opportunities for applying such a chip in the non-car, non-automotive industry. So that is also a technology applicable across different industries.

Stanley Qu: That is also a pretty common practice for car companies to share their technologies across different industries. For our partners, they do have mature experience and also skills in the chip design industry. They also have their own client and network connections. They have some chip products that can be complemented to our chip across different scenarios. Overall speaking, we believe that this is a win-win partnership.

That is also a pretty common practice for car companies to share their technologies across different industries. For our partners, they do have mature experience and also skills in the chip design industry. They also have their own client and network connections. They have some chip products that can be complemented to our chip across different scenarios. Overall speaking, we believe that this is a win-win partnership.

Speaker #4: And for our partners, they do have mature experience and skills in the industry, in the chip design industry. They also have their own clients and a network, and they have some chip products that can be applied across different scenarios.

Speaker #4: And for our partners, they do have mature experience and also skills in the industry, in the chip design industry. They also have their own clients and a network that includes some chip products that can create connections.

Speaker #4: So, overall speaking, we believe that this is a win-win. And also, they complemented our chip.

Speaker #4: partnership.

Operator: Thank you, Ben Wong. Thank you. Your next question comes from Jeff with Citi. Please go ahead.

[Operator]: Thank you, Ben Wong. Thank you. Your next question comes from Jeff with Citi. Please go ahead.

Speaker #1: Thank

Speaker #1: You. Your next question comes from Jeff with Citi. Please go.

Speaker #3: Hi, this is Jeff from

Tim Xiao: Hi, this is Jeff from Citi. My first question is on the full Q ASP. It looks like the 34 billion revenue guidance should match with vehicle ASP up 12% Q on Q at RMB 246,000. If the GV margin reaches 18%, that's around RMB 6 billion gross profit. This is my first question. My second question is the first quarter because we recognize the full Q guidance suggests revenue up 56% Q on Q and the GV margin reached 18%. Having said that, entering into the first quarter next year, our volume is not going to drop back to the third quarter level. Secondly, it looks like our high margin products at Q on Q volume into the first quarter are going to be stable. Therefore, the product mix should further improve into Q1 on a Q on Q basis.

Jeff Heitzner: Hi, this is Jeff from Citi. My first question is on the full Q ASP. It looks like the 34 billion revenue guidance should match with vehicle ASP up 12% Q on Q at RMB 246,000. If the GV margin reaches 18%, that's around RMB 6 billion gross profit. This is my first question. My second question is the first quarter because we recognize the full Q guidance suggests revenue up 56% Q on Q and the GV margin reached 18%. Having said that, entering into the first quarter next year, our volume is not going to drop back to the third quarter level. Secondly, it looks like our high margin products at Q on Q volume into the first quarter are going to be stable. Therefore, the product mix should further improve into Q1 on a Q on Q basis.

Speaker #3: Citi. My first question is on the ASP. So it looked like the $34 billion revenue guidance should match with vehicle Q at 246,000 RMB, which is a 12% quarter-on-quarter increase.

Speaker #3: So, if the gross margin reaches 18%, that's around $6 billion in gross profit, right? This is my first question. And my second, because we recognize the Q4 guidance suggests a revenue increase of 56% quarter-on-quarter, could it reach 18%?

Speaker #3: But, right? And the GB margin—having said that—entering into the first quarter next year, our volume is not going to drop back to the third quarter level, right?

Speaker #3: And secondly, it looked like our high margin products, like Q on Q volume, into the first quarter stable. So therefore, the is going to be product mix should further improve into 1Q.

Speaker #3: On the Q-on-Q basis, my second question is: would the first quarter vehicle margin also stay closer to the 18% level? Because the higher margin products contribute more to the mix.

Tim Xiao: My second question is, would the first quarter vehicle margin also stay closer to the 18% level because the high margin products contribute more to the mix? Thank you.

My second question is, would the first quarter vehicle margin also stay closer to the 18% level because the high margin products contribute more to the mix? Thank you.

Speaker #3: Thank you.

William Li: Hi, Jeff. ???? average selling price??????????????????????????????? ES8 ???????????????????????? ES8 ?????? 40,000 ?????????????????????????????? average selling price ???????????????????????????????????????????????????????????????????????

Speaker #5: So, the average selling price. Hi, Jeff. Should the average selling...

Speaker #4: Thank you for the question. Regarding the

Stanley Qu: Thank you for the question. Regarding the average selling price, it will increase in Q4. This is mainly driven by the sales of the high margin products, the ES8. As for the full year, our volume guidance for the ES8 is around 40,000 units, and most of this sales will be happening in Q4. It is also contributing to the improvement of the average selling price from Q3 to Q4. Regarding your second question on the gross margin outlook for Q1 next year, well, normally Q1 is a low season of the automotive industry. Overall speaking, the sales volume in Q1 will not be as good or as high as we normally expect for Q3 and Q4 in the previous years.

[Translator]: Thank you for the question. Regarding the average selling price, it will increase in Q4. This is mainly driven by the sales of the high margin products, the ES8. As for the full year, our volume guidance for the ES8 is around 40,000 units, and most of this sales will be happening in Q4. It is also contributing to the improvement of the average selling price from Q3 to Q4. Regarding your second question on the gross margin outlook for Q1 next year, well, normally Q1 is a low season of the automotive industry. Overall speaking, the sales volume in Q1 will not be as good or as high as we normally expect for Q3 and Q4 in the previous years.

Speaker #4: The average selling price will increase in Q4. This is mainly driven by the sales of the high-margin products, the ES8. As for the full-year guidance, our volume target for the ES8 is around 40,000 units.

Speaker #4: And most of these sales will be happening in Q4. So, it is also contributing to the improvement of the average selling price from your second question on Q3 to Q4.

Speaker #4: The gross margin outlook for Q1 next year, well, normally Q1 is a low season of the automotive industry. And regarding Q1, it won't be as good or as high as we normally expect for Q3 and Q4 in the previous years. So overall speaking, the sales volume.

William Li: ?? William ???????????????????????????????????????????????????????????????????????????????? ES8 ?????????????????????????????????????????????????????????????????????????????????????????????????????????????? gap ?????????????????????????????

Speaker #4: But as also mentioned, in Q4 this year, sales spikes fueled by the we may not see the common even if we are going to encounter the seasonality.

Stanley Qu: As also mentioned, in Q4 this year, we may not see the common sales spikes fueled by the seasonality. In that case, even if we are going to encounter the low season Q1 next year, the actual impact or the decrease from Q4 this year to Q1 next year won't be that significant in comparison to the previous years. Not to mention that we also have the ES8 order backlogs that will last until next year. This will also help to offset the seasonality impact in Q1 next year. Overall speaking, our operations and also volume forecast for Q1 next year will not be as good as in Q4 this year, but will also not be as low as in Q1 this year. Overall speaking, the vehicle gross margin falls into the same trend.

[Translator]: As also mentioned, in Q4 this year, we may not see the common sales spikes fueled by the seasonality. In that case, even if we are going to encounter the low season Q1 next year, the actual impact or the decrease from Q4 this year to Q1 next year won't be that significant in comparison to the previous years. Not to mention that we also have the ES8 order backlogs that will last until next year. This will also help to offset the seasonality impact in Q1 next year. Overall speaking, our operations and also volume forecast for Q1 next year will not be as good as in Q4 this year, but will also not be as low as in Q1 this year. Overall speaking, the vehicle gross margin falls into the same trend.

Speaker #4: Low season Q1 next year, the actual impact or the reduced or the decrease from Q4 this year to Q1 next year won't be that significant in comparison to the previous years.

Speaker #4: The ES8 order backlogs, in that case, not to mention that we also have those that were lost onto the next year. This will also help to offset the seasonality impact in Q1 next year.

Speaker #4: So overall speaking, our operations and also volume forecast for Q1 next year are as good as in Q4 this year. We will not be as low as in Q1 this year.

Speaker #4: So overall speaking, the vehicle gross margin falls into the same trend. It will be lower than the margin outlook we have for Q4 this year.

Stanley Qu: It will be lower than the margin outlook we have for Q4 this year, but will be better than Q1 last year.

[Translator]: It will be lower than the margin outlook we have for Q4 this year, but will be better than Q1 last year.

Speaker #4: But we'll be better than Q1 last year.

Speaker #5: Thank you,

William Li: Thank you, Jeff.

Stanley Qu: Thank you, Jeff.

Speaker #5: Jeff. Thank

Speaker #3: you. Thank

Tim Xiao: Thank you.

Jeff Heitzner: Thank you.

Speaker #1: You. Your next question comes from Ming Sun Li with Bank of America. Please go ahead.

Operator: Thank you. Your next question comes from Ming Sun Li with Bank of America. Please go ahead.

[Operator]: Thank you. Your next question comes from Ming Hsun Lee with Bank of America. Please go ahead.

Speaker #6: Hello, William. This is Ming. So my first question is regarding your overseas plan. Because I think in the past few years, you And could you give us have built more of your strategy for overseas several sales channels in Europe.

Tim Xiao: Hello, William. This is Ming. My first question is regarding your overseas plan because I think in the past few years you have built several sales channels in Europe. Could you give us more of your strategy for overseas expansion for the next few years? Thank you. That's my first question.

Ming Hsun Lee: Hello, William. This is Ming. My first question is regarding your overseas plan because I think in the past few years you have built several sales channels in Europe. Could you give us more of your strategy for overseas expansion for the next few years? Thank you. That's my first question.

Speaker #6: Expansion for the next few years? Thank you. That's my first question.

William Li: 2021 ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Firefly ???????????????????????????????????????????????????? ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? NIO ???????????????????????????????? premium ??????????????????????????????? NIO???? ONVO???? Firefly?????????????????? Firefly ???ONVO ????? ready ???????????? NIO????????????

Speaker #4: Thank you for the question. We entered into Europe in 2021. From 2021 to 2024, in the past several years, we've been doing direct-to-customers or direct-to-users—the direct selling model.

Stanley Qu: Thank you for the question. We entered into Europe in 2021, and from 2021 to 2024 in the past several years, we've been doing direct to customers or direct to users, the direct selling model for the European markets. Yet in the meantime, with all the external factors such as the tariffs in the EU, we also started to realize that for a broader market entrance, we do need to rely on and leverage more on the partners' support and resources. That's why starting this year, we have started to look for local partners for our market entry. Right now, we already have identified high-quality partners in more than 10 countries and regions. Firefly will be the first brand where we introduce to the overseas markets leveraging our partners' resources and the network.

[Translator]: Thank you for the question. We entered into Europe in 2021, and from 2021 to 2024 in the past several years, we've been doing direct to customers or direct to users, the direct selling model for the European markets. Yet in the meantime, with all the external factors such as the tariffs in the EU, we also started to realize that for a broader market entrance, we do need to rely on and leverage more on the partners' support and resources. That's why starting this year, we have started to look for local partners for our market entry. Right now, we already have identified high-quality partners in more than 10 countries and regions. Firefly will be the first brand where we introduce to the overseas markets leveraging our partners' resources and the network.

Speaker #4: For the European markets, yet in the meantime, with all the external factors such as the tariff in the EU, we also started to realize that for a broader market entrance, we do need to rely on and leverage more on the partner support and resources.

Speaker #4: That's why, starting this year, we have begun to look for local partners for our market entry. Right now, we have already identified high-quality partners in more than 10 countries and regions.

Speaker #4: And the Firefly will be the first brand where we introduce to the overseas markets, leveraging our partner's resources and the network. The product will become available not only in Europe and Asia, but also in the Middle East and South America.

Stanley Qu: The product will become available not only in Europe, Asia, but also in the Middle East, and also South America. Overall speaking, for the global market expansion, we are switching our business model from the direct selling business model to a more partnership-based, and also local partners-supported, business model. Also, for the Firefly and its product, it's actually a very good product suitable for broader markets, and its European version and right-hand drive version are already developed, ready for the global market entry. We do have confidence in the global expansion of the Firefly product. In the meantime, we are also developing the ONVO products for the global markets. It is also a brand with a reasonable price range and product lineup for the global market expansion. As for the new brand, it targets the premium segment.

The product will become available not only in Europe, Asia, but also in the Middle East, and also South America. Overall speaking, for the global market expansion, we are switching our business model from the direct selling business model to a more partnership-based, and also local partners-supported, business model. Also, for the Firefly and its product, it's actually a very good product suitable for broader markets, and its European version and right-hand drive version are already developed, ready for the global market entry. We do have confidence in the global expansion of the Firefly product. In the meantime, we are also developing the ONVO products for the global markets. It is also a brand with a reasonable price range and product lineup for the global market expansion. As for the new brand, it targets the premium segment.

Speaker #4: So overall speaking, expansion, we are switching our business selling business model to a more partnership-based and model from the direct also local partner-supported for the global markets, business model.

Speaker #4: And also for the Firefly and its product, it's for broader markets. Actually, it's a very good product, suitable and right-hand drive version already, and also its European version developed.

Speaker #4: Ready for the global market entry. We have confidence in the global expansion of the Firefly product. In the meantime, we are also developing the Anvil product for the global markets.

Speaker #4: Also, a brand with a reasonable price range and its product lineup for global market expansion. As for the new brand, as it targets the premium segment, it does take patience and time to establish brand awareness of the new product.

Stanley Qu: It does take patience and time to establish brand awareness on the new product. In that case, we are also more patient and also more long-term for the global market expansion of the new brand. Overall speaking, in China, we started with the new brand, the premium one, and then we have the ONVO brand and the Firefly. For the global market expansion, we will take the opposite way where we will start with the Firefly. When ONVO has the products ready for the global markets, we will then push out ONVO and then NIO.

It does take patience and time to establish brand awareness on the new product. In that case, we are also more patient and also more long-term for the global market expansion of the new brand. Overall speaking, in China, we started with the new brand, the premium one, and then we have the ONVO brand and the Firefly. For the global market expansion, we will take the opposite way where we will start with the Firefly. When ONVO has the products ready for the global markets, we will then push out ONVO and then NIO.

Speaker #4: In that case, we are also more patient and more long-term focused on the global market expansion of the new brand. Overall speaking, in China, we started with the new premium brand.

Speaker #4: And then we have the Anvil brand and the Firefly. But for the global market expansion, we will take the opposite. We will start with the Firefly, and then when Anvil has the product ready for the global markets, we will then push out Anvil and then.

Speaker #4: new. will take the opposite way where we will start.

Speaker #6: I thank you, William. My second question is regarding the expansion of more mass market opportunity. Since Anvil is very successful in L90, and also recently your L60 volume sales, do you expect to continue to grow in the future?

Tim Xiao: Thank you, William. My second question is regarding the expansion of more mass market opportunity. Since ONVO is very successful in L90 and also recently your L60, volume sales also continue to grow. In the future, do you expect to launch more products under the ONVO brand and to have more business opportunity for the segment at RMB 200,000 or even below? Thank you.

Ming Hsun Lee: Thank you, William. My second question is regarding the expansion of more mass market opportunity. Since ONVO is very successful in L90 and also recently your L60, volume sales also continue to grow. In the future, do you expect to launch more products under the ONVO brand and to have more business opportunity for the segment at RMB 200,000 or even below? Thank you.

Speaker #6: To launch more products under the Anvil brand and to have more business opportunity for the segment at 200,000 RMB or even below? Thank you.

William Li: ????????????????????????????????????????????????????????? Toyota?? Volkswagen ????????????????????????????????????? RMB 100,000 ? 300,000 ?????????????????????????????? RMB 200,000 ???L60 ?? RMB 200,000 ??????? L90 ?????? RMB 300,000?? RMB 200,000 ? 300,000 ????????? L80 ?????????????????? RMB 200,000 ??????????????????????????????????????????? RMB 100,000 ? 300,000 ??????????????????? RMB 100,000 ? 300,000 ???????? 1,500 ?????????????????????????????????????

Speaker #4: Thank you for

Stanley Qu: Thank you for the question. For the ONVO brand, it is defined as a family-oriented brand for the mass market. Just like Toyota and Volkswagen, for the long term, we do need to create a wide and broad product bandwidth to cater to more needs, and also to cover more press and market segments. For the long term, for the ONVO brand, our price bandwidth will be ranging from RMB 100,000 to 300,000. Within that range, we are going to offer more diverse products, and also options for our users to choose from. We started with L60 priced around RMB 200,000. For the L90, the fully loaded one has a price point of around or close to RMB 300,000. Next year, for the L80, it will also be between RMB 200,000 to 300,000.

[Translator]: Thank you for the question. For the ONVO brand, it is defined as a family-oriented brand for the mass market. Just like Toyota and Volkswagen, for the long term, we do need to create a wide and broad product bandwidth to cater to more needs, and also to cover more press and market segments. For the long term, for the ONVO brand, our price bandwidth will be ranging from RMB 100,000 to 300,000. Within that range, we are going to offer more diverse products, and also options for our users to choose from. We started with L60 priced around RMB 200,000. For the L90, the fully loaded one has a price point of around or close to RMB 300,000. Next year, for the L80, it will also be between RMB 200,000 to 300,000.

Speaker #4: the question. For the Anvil brand, you. it is defined as a family-oriented brand for the mass market. So just like Toyota and the Volkswagen, for the long term, we do need to create a wide and broad product bandwidth to cater to more needs and also to cover more press and the market segments.

Speaker #4: So, for the long term, the Anvil brand's price bandwidth will range from 100,000 to 300,000 RMB. Within that range, we are going to offer a more diverse selection of products and options for our users to choose from.

Speaker #4: We started with the L60, priced around 200,000 RMB. For the L90, the fully loaded version has a price point of around, or close to, 300,000 RMB.

Speaker #4: And the next year for the L80, it will also be between 200,000 to 300,000 RMB. So that is already a price segment captured by the existing three products.

Stanley Qu: That is already a price segment captured by the existing three products. In the meantime, we are also developing a new product platform where we are targeting the price range below RMB 200,000. We believe that with this diversified product and price lineup, plus a more mature power swap network, we are able to achieve a reasonable market share in the price range from RMB 100,000 to 300,000. This is also the single largest price segment and market in China's passenger vehicle market, with a total volume of 15 million. In such a large market, there is no reason for us to not launch enough products to capture a sufficient market share.

That is already a price segment captured by the existing three products. In the meantime, we are also developing a new product platform where we are targeting the price range below RMB 200,000. We believe that with this diversified product and price lineup, plus a more mature power swap network, we are able to achieve a reasonable market share in the price range from RMB 100,000 to 300,000. This is also the single largest price segment and market in China's passenger vehicle market, with a total volume of 15 million. In such a large market, there is no reason for us to not launch enough products to capture a sufficient market share.

Speaker #4: And in the meantime, we are also targeting the price range below ¥200,000. We believe that with this diversified product and price lineup, plus the more mature development of a new product power swap network, we are able to achieve a reasonable market share in the price range from ¥100,000 to ¥300,000.

Speaker #4: This is also the single largest price segment and the market in China's passenger vehicle market, with a total volume of 15 million. In such a large market, there's no reason for us to not launch enough products to capture a sufficient market.

Speaker #4: share.

Speaker #6: Thank you, William. That's all my

Tim Xiao: Thank you, William. That's all my questions.

Ming Hsun Lee: Thank you, William. That's all my questions.

Speaker #6: question. Thank

Operator: Thank you.

[Operator]: Thank you.

Speaker #8: Thank you. you.

William Li: Thank you.

Ming Hsun Lee: Thank you.

Operator: Your next question comes from Jim Chang with CICC. Please go ahead.

[Operator]: Your next question comes from James Chang with CICC. Please go ahead.

Speaker #7: from Jim Chang. Your next question comes with CICC, please go.

Speaker #7: Hi, thank you for taking my call.

Paul Gong: Hi. Thank you for taking my question. I have only one question, a follow-up question in regards to the R&D expense. We have already seen our R&D expense in the third quarter further decrease a lot to our previously guided level. The industry is increasing investment in intelligence and also AI-related other areas. How do we allocate our limited R&D expense, and how do we balance the short-term R&D efficiency and also long-term R&D goals?

James Chwang: Hi. Thank you for taking my question. I have only one question, a follow-up question in regards to the R&D expense. We have already seen our R&D expense in the third quarter further decrease a lot to our previously guided level. The industry is increasing investment in intelligence and also AI-related other areas. How do we allocate our limited R&D expense, and how do we balance the short-term R&D efficiency and also long-term R&D goals?

Speaker #9: I have only one follow-up question regarding the R&D expense. We have already seen our R&D expense in the third quarter, and it decreased a lot.

Speaker #9: To our previously guided level, but the industry is increasing investment in intelligence and also AI-related other areas. How do we allocate R&D expense, and how do we balance the shorter R&D efficiency with our limited long-term R&D?

Speaker #9: goals?

William Li: ???????????????????????????????????????????????????????? CBO ??????????????????????????????????????????????????????????????????????????????????????????????? 12 ??????????????????????????????????????????????????????????????????????????????????????????????????????? 900 ??????????????????????????????????????????????????????????????????????????????????

Stanley Qu: Thank you for the question. Actually, this year, our major focus in the R&D activities is to improve the efficiency, and also to identify the priority of different R&D activities and the projects. In that regard, the CBU mechanism has played a very important role in helping to make full use of the R&D investment and expenses. In the meantime, we will also make sure that we will not lose our long-term competitiveness, as that is a baseline that we will not cross. With the CBU, we actually are pleased to see that even if we are doubling back on the R&D expenses in the recent quarters, yet we still maintained the R&D capabilities and competitiveness in the 12 full-stack capabilities for the smart EV. We are also confident to continue that competitiveness.

[Translator]: Thank you for the question. Actually, this year, our major focus in the R&D activities is to improve the efficiency, and also to identify the priority of different R&D activities and the projects. In that regard, the CBU mechanism has played a very important role in helping to make full use of the R&D investment and expenses. In the meantime, we will also make sure that we will not lose our long-term competitiveness, as that is a baseline that we will not cross. With the CBU, we actually are pleased to see that even if we are doubling back on the R&D expenses in the recent quarters, yet we still maintained the R&D capabilities and competitiveness in the 12 full-stack capabilities for the smart EV. We are also confident to continue that competitiveness.

Speaker #4: Actually, this year, our major focus in the R&D activities is to improve the efficiency and also to identify the priority of different R&D activities and the projects.

Speaker #4: In that regard, the CBU role in helping to make the full mechanism has played a very important part in the R&D investment and expenses. In the meantime, we also made sure that we will not lose our long-term competitiveness, as that is a baseline that we will not cross.

Speaker #4: So with the CBU, we actually are pleased to see that even if we are doubling back on the R&D expenses in the recent quarters, yet we still maintained the R&D capabilities and competitiveness in the top full-stack capabilities for the smart EV.

Speaker #4: also confident to control to continue that competitiveness. And also in the past several years, So we are we've made major investments in developing the fundamental technologies for the core EV products, including our chips, operating systems, intelligent chassis, and also 900-volt high-voltage architecture.

Stanley Qu: In the past several years, we've made major investments in developing the fundamental technologies for the core EV products, including our chips, operating systems, intelligent chassis, and also 900-volt high-voltage architecture. As the foundation is already laid for the future products and the technology platforms, the follow-up iterations won't be as costly as developing the foundation and also the fundamental technology, as the future iterations will also get more efficient in utilizing limited R&D resources.

In the past several years, we've made major investments in developing the fundamental technologies for the core EV products, including our chips, operating systems, intelligent chassis, and also 900-volt high-voltage architecture. As the foundation is already laid for the future products and the technology platforms, the follow-up iterations won't be as costly as developing the foundation and also the fundamental technology, as the future iterations will also get more efficient in utilizing limited R&D resources.

Speaker #4: As the foundation is already laid for the future products and the technology platforms, the costly as developing the technologies as the future iterations will also get more efficient in follow-up iterations won't be as utilizing limited R&D foundation and also the fundamental resources.

William Li: that in terms of how to improve ROI and how to prioritize R&D projects, we have already found our own methods.

Stanley Qu: Regarding the AI technology and its applications like the smart driving and also our AI companion Nomi, as well as the internal management and efficiency tools, we will continue our R&D intensity and also efforts, but we'll achieve that in a more efficient way. In terms of using algorithms and the data, we actually have identified some good practices and approaches that can be more efficient than simply putting up investment or resources for the sake of achieving high computing power or data performance. We have identified some approaches with higher return on the investment. Actually, in the AI industry, the success of DeepSeek has also proven that you don't need to make a costly investment into developing a good large language model performance. It's the same practice for us.

[Translator]: Regarding the AI technology and its applications like the smart driving and also our AI companion Nomi, as well as the internal management and efficiency tools, we will continue our R&D intensity and also efforts, but we'll achieve that in a more efficient way. In terms of using algorithms and the data, we actually have identified some good practices and approaches that can be more efficient than simply putting up investment or resources for the sake of achieving high computing power or data performance. We have identified some approaches with higher return on the investment. Actually, in the AI industry, the success of DeepSeek has also proven that you don't need to make a costly investment into developing a good large language model performance. It's the same practice for us.

Speaker #4: AI technology and its applications, like the smart driving and also our AI And also regarding the companion Nomi, as well as the internal management and efficiency tools, we will continue our R&D intensity and also efforts.

Speaker #4: But we'll achieve that in a more efficient way. In terms of using algorithms and data, we have actually identified some good practices and approaches that can be more efficient than simply putting up investments or resources for the sake of achieving high computing power or data performance.

Speaker #4: So we have identified some approaches with higher return on the investment. And actually, in the AI industry, the success of DeepSeek has also proven that you don't need to make costly language model performance.

Speaker #4: investments into developing a good large So it's the same practice for us. Not to mention that we can also leverage our collective artificial intelligence equipped on all the vehicles and also our data closed-loop.

Stanley Qu: Not to mention that we can also leverage our collective artificial intelligence equipped on all the vehicles, and also our data close loop. With that, to achieve the same level of computing performance, we actually do not need to use that much computing power as our competitors or other peers are doing. Overall speaking, in terms of the R&D, we have been putting more focus on the return on investment evaluation, as well as doing a better priority for our R&D activities.

Not to mention that we can also leverage our collective artificial intelligence equipped on all the vehicles, and also our data close loop. With that, to achieve the same level of computing performance, we actually do not need to use that much computing power as our competitors or other peers are doing. Overall speaking, in terms of the R&D, we have been putting more focus on the return on investment evaluation, as well as doing a better priority for our R&D activities.

Speaker #4: With that, to achieve the same level of computing performance, we actually don't need to use that much or other peers are doing. So computing power as our competitors overall speaking, in terms of the R&D, we have been putting more focus on the return on investment evaluation, as well as doing a better priority for our R&D

Speaker #4: activities. Yes, thank

Speaker #9: you again. Thank you.

Paul Gong: Yes, thank you. Good, thank you.

James Chwang: Yes, thank you. Good, thank you.

William Li: Thanks.

[Operator]: Thanks.

Speaker #3: you. Thank Thank you. Your next question comes from the line HSBC. Please go ahead.

Operator: Thank you. Your next question comes from the line of Yuki and Ding with HSBC. Please go ahead.

Thank you. Your next question comes from the line of Yuki and Ding with HSBC. Please go ahead.

Nick Lai: Thanks, Ding. I got two questions. First one is, could you share the cost benefits when we hit the volume threshold? The current run rate is half a million now, and it's only going to get higher next year. What benefit can we get, let's say, battery and other critical components that have high weight in the BOM structure?

Yuki Ding: Thanks, Ding. I got two questions. First one is, could you share the cost benefits when we hit the volume threshold? The current run rate is half a million now, and it's only going to get higher next year. What benefit can we get, let's say, battery and other critical components that have high weight in the BOM structure?

Speaker #4: I got two questions. First one

Speaker #4: benefits when we hit the volume million now, and it's only going to get higher next year. What benefit can we critical components that have high weight Thanks, Ding.

Speaker #4: threshold? in the bomb The current run rate is half a structure. of Yuki and Ding with

Speaker #3: Yeah.

William Li: for the reduction of our costs.

Stanley Qu: Thank you for the question. As mentioned, when the sales volume reaches a certain level of scale, we will actually see how the economy of scale is contributing to the improvement in the financial performance, and it is mainly contributed from two perspectives. The first is regarding stronger bargaining power along the supply chain. This can also help improve the vehicle cost structure as you indicated in our Q3 and Q4 vehicle margin guidance. For next year, we do not have a clear picture regarding how much will be contributed by the economy of scale from the supply side. Yet, as mentioned by William, our gross margin target for next year is 20%. That will actually partially be driven by the economy of scale on the supply side. The second is regarding the improvement in the manufacturing efficiency and also cost optimization driven by the manufacturing.

[Translator]: Thank you for the question. As mentioned, when the sales volume reaches a certain level of scale, we will actually see how the economy of scale is contributing to the improvement in the financial performance, and it is mainly contributed from two perspectives. The first is regarding stronger bargaining power along the supply chain. This can also help improve the vehicle cost structure as you indicated in our Q3 and Q4 vehicle margin guidance. For next year, we do not have a clear picture regarding how much will be contributed by the economy of scale from the supply side. Yet, as mentioned by William, our gross margin target for next year is 20%. That will actually partially be driven by the economy of scale on the supply side. The second is regarding the improvement in the manufacturing efficiency and also cost optimization driven by the manufacturing.

Speaker #4: As mentioned, when the source volume reaches a certain level, thank you for the economy of scale contributing to the improvement in the scale, we will actually see how financial performance.

Speaker #4: And it's mainly contributed from two perspectives. The first is regarding stronger bargaining power along the supply chain. This can also help improve the vehicle cost structure, as UIDC in vehicle margin guidance.

Speaker #4: And for Q3 and Q4 of next year, we don't have a clear picture regarding how much it will be contributed by the economy of scale from the supply side.

Speaker #4: Yet, as mentioned by William, our gross margin target for next year is 20%. That will actually partially be driven by the economy of scale on the supply side.

Speaker #4: improvement in the manufacturing efficiency and And the second is regarding the also cost optimization. Driven by the manufacturing, as we improve our sales volume, the overall amortized manufacturing cost per unit will be gradually optimized.

Stanley Qu: As we improve our sales volume, the overall amortized manufacturing cost per unit will be gradually optimized. That will also contribute to the improvement in the cost structure of our products.

As we improve our sales volume, the overall amortized manufacturing cost per unit will be gradually optimized. That will also contribute to the improvement in the cost structure of our products.

Speaker #4: That will also contribute to the improvement in the cost structure of our products. Thank you, Stanley. The second question is, regarding next year's new model, could you help us to put in context the mixed impact?

Nick Lai: Thank you, Stanley. The second question is regarding next year's new model. Could you help us to put in context the potential higher scale and also the mixed impact? We talked about the bigger vehicle has better margin, but we also talked about the L90 is still 15% to 20%. L80 will be below L90 in terms of the pricing. Presumably, will there be dilution or joint L90 scale outweigh that?

Yuki Ding: Thank you, Stanley. The second question is regarding next year's new model. Could you help us to put in context the potential higher scale and also the mixed impact? We talked about the bigger vehicle has better margin, but we also talked about the L90 is still 15% to 20%. L80 will be below L90 in terms of the pricing. Presumably, will there be dilution or joint L90 scale outweigh that?

Speaker #4: We talked about how the bigger vehicle has better margins, but we also discussed the potential for higher scale, as well as the target margins of 15% to 20%.

Speaker #4: So L80 will be below 90 in terms of the pricing presumably. Will there be dilution or joint on those scale outweigh that? Thank you for the question.

William Li: level, compared to lower-priced models, should also maintain a relatively good gross margin level, which will help us achieve an overall 20% gross margin next year.

Stanley Qu: Thank you for the question. As mentioned, the three new large SUV models that we're going to introduce next year are all positioned at the higher end of the price spectrum of their respective segment. We haven't finalized the prices for these new models yet, yet we already expect more significant margin contribution by these three models. Not to mention that these three large models are further synergized with the current all-new ES8 and L90 from the cost structure. This year and next year, the cost optimization and the cost saving opportunities that we've identified on the ES8 and L90 can also be carried over to these three new models. With five large models combined, we expect them to contribute to the good product performance, as well as on the margin levels, overall speaking, achieving 20% of vehicle margin.

[Translator]: Thank you for the question. As mentioned, the three new large SUV models that we're going to introduce next year are all positioned at the higher end of the price spectrum of their respective segment. We haven't finalized the prices for these new models yet, yet we already expect more significant margin contribution by these three models. Not to mention that these three large models are further synergized with the current all-new ES8 and L90 from the cost structure. This year and next year, the cost optimization and the cost saving opportunities that we've identified on the ES8 and L90 can also be carried over to these three new models. With five large models combined, we expect them to contribute to the good product performance, as well as on the margin levels, overall speaking, achieving 20% of vehicle margin.

Speaker #4: introduce next year, they are all higher end of the price spectrum of positioned at the their respective segment. We haven't finalized the prices for this As mentioned, the three new models yet, yet we already expect more significant margin contribution by this three models.

Speaker #4: Not to mention that this three large models, they are for the synergized with the current all-new ES8 and L90 from the cost structure. So this year and the next year for the cost structure for the cost optimization and the cost saving opportunities, that we've identified on the ES8 and L90 can also be carried over to this three new models.

Speaker #4: So, with five large models combined, we expect them to contribute to the good product performance as well as on the margin levels.

Speaker #4: Overall speaking, achieving a 20% vehicle margin. Thank you.

Speaker #4: you. Thank

Nick Lai: Thank you.

Yuki Ding: Thank you.

William Li: ?? Yuqin.

Speaker #3: you. Yes, there are no further questions. Now I'd like to turn the call back over to the company for closing

Operator: Thank you. As there are no further questions, now I'd like to turn the call back over to the company for closing remarks.

[Operator]: 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 #2: Thank you again

William Li: Thank you again for joining us today. If you have any further questions, please feel free to contact our investor relations team through the contact information on the website. This concludes the conference call. You may now disconnect your line. Thank you.

Rui Chen: Thank you again for joining us today. If you have any further questions, please feel free to contact our investor relations team through the contact information on the website. This concludes the conference call. You may now disconnect your line. Thank you.

Speaker #2: Thank you for joining us today. If you have any further questions, please feel free to contact our Investor Relations team through the contact information on the website.

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