NIO (NIO) 20 Nov 242024 Q3 Earnings call transcript

Company Profile

Participants

Rui Chen	executive
Bin Li	executive
Stanley Qu	executive
Tim Hsiao	analyst
Y.C. Lai	analyst
Ming-Hsun Lee	analyst
Bin Wang	analyst
Yuqian Ding	analyst
Xue Deng	analyst
Paul Gong	analyst
Tina Hou	analyst

Call transcript

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Operator

Hello, ladies and gentlemen. Thank you for standing by for NIO Inc.'s Third Quarter 2024 Earnings Conference Call

[Operator Instructions] today's conference call is being recorded. I will now turn the call over to your host, Mr. Rui Chen, Head of Investor Relations of the company. Rui. ahead, go Please .

Rui Chen

and good Conference Welcome and Call. in earlier were and IR the Quarter website. operating NIO's XXXX published today release press Earnings The the posted evening, morning on to company's everyone. Third results are Good company's financial

we William today's and Chairman Board Li, of call, On Mr. Stanley Founder, the CEO; Qu, have Mr. CFO.

U.S. Reform the reminded contain forward-looking Before of will safe provisions we discussion harbor continue, Litigation that please today's Private of XXXX. the be Act made to Securities kindly statements

Forward-looking statements and risks inherent uncertainties. involve

As from Securities Hong such, Securities U.S. is the Further Limited Kong Limited. risks the materially company's of Trading actual results Singapore of the uncertainties the information and and may the be Exchange and included different filings with today. in Commission, certain views the Exchange expressed company Exchange regarding Stock

company assume The as unaudited also release financial statements, discussions call update except law. any measures. unaudited that include required to and Neil's forward-looking obligation Please as under well earnings financial press information applicable conference note not as non-GAAP any this GAAP does of

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

Bin Li

family into PV its model mainstream deliver its you China's brand September The Thank first NIO top-selling maintained is XX. broader joining market. the everyone. brand quarterly on the The for earnings with QX, segment QX share to in delivery. XX,XXX Hello, positioned company the priced started NIO's RMB also new ONVO above call. In XXXX record achieved a XXX,XXX is with as entry brand XX%. market LXX reaching Marketing

delivered In XX,XXX XXXX, October company the vehicles.

be to continued XX,XXX the up between are brand and to expected company's total ONVO capacity, units. XX,XXX deliveries in QX the production While ramp

achieved improved costs gross the in in steadily, a On of other results of continued flow leading have the Besides side, the QX. sales margin sustained revenues gross positive growth component free the our in QX the operating XX.X%. improvement reflected flow and a margin company cash supported cash by to financial vehicle margin, and

like family the ETX share and our operations. leading testing will with to and special aiming delivery and delivery year, thanks more on energy models safety updates before LXX With the be and NIO brand in swapping low the brings flagship is The focused start NIO's ETX NIO's free brand harder ONVO coming production the the premium preparation market new mainstream the introduced Now, with NIO's expected you to been Its final together Executive products, ultra be is March. and in to I has consumption, would some to experience. features will a comprehensive reinforce improving innovation. The profitability. image. cutting, in the R&D mass hit users, charging on family

on Now XX,XXX officially up we NIO's on brand XX,XXX Day will NIO's monthly a make of its car production compact in units by company's our targeting December year, units XX, debut will line enrich chain market, product December the XXXX. use first of brand half first hit sales the supply the third [indiscernible] will and existing March. be NIO Besides, first network. be next expected -- up delivered the is in and named in are global the full will to capacity. make Its Firefly ramping capacity delivered product product

onward to -- and Pilot, they driving smart do. driving rolled Navigate expertise -- vision-based of the Urban smart have brand activated OP had footprint kilometers with over The making XXX,XXX and Together, on navigation market terms time NIO's to over and out over continue activity built the smart was guided driven XX.X% experience NIO's deliver first on In X.XX company's with October, on grow. company's the the by on driven sales users billion based the

cases XXX XXX NIO and NIO worldwide, while Houses ONVO So stores XXX across has far, NIO China.

On the centers service end, the delivery centers. and XXX has company service XX

plan country's us the joining headway, with making partners power expanding in is strong The more of network.

worldwide, company the now, has of and X,XXX works Power million over been As Swap provided have on for XXX including stations NIO users. ONVO XX highways

In addition, and chargers charges and are power over up XX,XXX running. destination the

in On and in House first continue will our We have update, sales already November NIO to globally. and open MENA region started expand the UAE. the delivery XX,

RMB in from the reinforces Next NIO's secured ONVO the invested company September international entry. year, This confidence agreement sheet industry signed balance market billion high and our new and NIO investment firefly, products will investors. On from strategic leadership. accelerate a the with XX, boost and X.X NIO the its China capital reflect

XX, milestone and formula a an XX [indiscernible] NIO helped NIO's October their have talented users been and to tenth students for NIO the XXXX smart our without China putable marked students On the November supporting event a EV that rapidly XX Capital more industry. of evolving investors. anniversary, the in XX,XXX chase end, came has wouldn't trust than dreams support years,

starts forward, Firefly new company is the more cycle, face enter NIO growth. a products, robust on of embarking brand product deliver as to new will Going the the and and ONVO

over support. call turn you, that, details. financial We you are Stanley count. confident the Stanley. QX's the I now what in Thank to With to for Over for will

Stanley Qu

William. you, Thank

quarter now XXXX. for the key of financial review third Let's results our

sales Our RMB year-over-year volume. price due average deliveries. due the driven lower total partially X.X% XX.X to X.X% delivery was revenues were primarily increased a changes quarter-over-quarter, quarter-over-quarter. down and billion, to mainly year-over-year up by XX.X Vehicle mix, in billion, selling higher by were RMB Vehicle sales which increased X.X% product X% offset decreased

parts, and power in and RMB and the parts, sales grew was services XX.X% of of used accessories other offset accessories of sales lower quarter-over-quarter aftersales vehicle due the attributed performance and power sales year-over-year XX.X% to services solutions and quarter-over-quarter. cars. X sales partially in to the provision solutions. business. increase by vehicle of of mainly billion, of Moving by were year-over-year was The The and increase aftersales mainly increase increase provision Other to

XXXX Vehicle due margin XX% year-over-year cost was XX.X% XX.X% period the by The offset selling to mainly a quarter. up partially compared unit product decreased in X% X.X% result the last same mainly lower decreased and costs of mix. gross due last the to price, quarter was from XX.X%, increase The in last per of average material this same per of to increase changes and was period in material quarter. was quarter-over-quarter in year and unit. Overall margin the in

year-over-year R&D RMB The driven costs mainly OpEx. to SG&A were quarter-over-quarter. X.X Turning product mainly was sales higher billion, activities by XX.X% increase costs increased billion expenses X.X% by sales at functions. with new was expenses personnel X.X% year-over-year functions X.X increased both increased which quarter-over-quarter, and associated personnel in launch. X.X% marketing R&D RMB and and year-over-year driven to increased the related

relatively loss from year-over-year Loss of was showing billion, RMB quarter-over-quarter. quarter-over-quarter. the and X.X at XX% Net operations year-over-year X.X an remaining was X.X% flat billion, up RMB increase stable relatively

quarter our balance Lastly, we cash and stronger and prepared short-term with the cash equivalents, wraps investments billion. to cash, with total remarks. ended long-term That up restricted sheet RMB deposit a XX.X time

to XXXX our and press details information more earnings please of For unaudited our financial third quarter refer release. results, the

over session. to call Thank will operator our the you. I turn Now, to the start Q&A

Operator

first Hsiao from Your Morgan question Stanley. Tim with comes Instructions] [Operator

Tim Hsiao

is This I have Stanley. from X Tim Morgan questions.

chain launched ONVO NIO alignment ONVO LXX the and being worried demand we supply we The when the noticed since brand trends order Should cannibalization September, because first be brands and of end the see-sawing. and potential NIO about brands in LXX, strategy first was orders these X the ONVO is the of proposition it my How question. concrete. management? to about X brands between brand comes That's

Bin Li

for [Interpreted] Thank the question. you

Regarding of volumes an passive October. the a decrease results. active see is more of volume you overall brand, adjustment the than delivery our That in delivery starting NIO a

costs As . With realized have on the by in our unit around months And for per now. was October, the target been demand, monthly on on XX,XXX our from are X Then above the recovery seeing that on we overall brands part inevitably, promotions delivery the reducing have regarding we starting we volume has XX,XXX our as the marketing for strategy, a is the and sales stabilizing margin volume. to you'll before on [indiscernible] delivery But October, different RMB volume. under that, that brand the we think our X promotional some that the pressure vehicle we groups starting are But see units also speaking, product. expenses and the meantime, marketing or several as our strategy and expenses costs. consecutively. user November, impact we using success volume

delivery are NIO still we a them source it but competitors at internally, or For with segment. competition are of of is the brand, looking price the actual competing now, the users, loss we It the brand case, minimum, the and on on Right same but ONVO Model actually brand pretty overall come the is from in potential majority brand other at In main over sales users. And the when the the around months. impact choose over is X that increments NIO we that true limited. in is the only past the may new ONVO new, ONVO the had the few users brand of NIO X%. -- or may combined ONVO X and impact the looking the X overlapping still the surpass on also NIO both the choose volume and of between ONVO,

look to X source the actually ONVO at from top source of that, our [indiscernible]. is the this To of coming clarify users ONVO users,

Tim Hsiao

model a ramp main in is year-end. NIO. ramp of impact the question. current question is pipeline and would next in still there just LX consider our any up. would be What the and Because pace And view and XXXX? second production to little have so backlog ONVO into the selling year, to the a the of the the the in under noticed TX towards order production more as the That's bit group March slow. we more upcoming new far second models moderate bus bottlenecks on ramp-up is My my mentioned also up reason about the meantime, How Firefly we

Bin Li

question. [Interpreted] Thank you the for

market -- that its the For the expectation and ramp-up people ONVO, where capacity. true higher production it's for a has have

However, lot understand comes with that of we also need a technologies. LXX to cutting-edge

system advanced has the coconut technologies. new with of battery digital the systems. and is also operation equipped like pretty a operating also architecture, production has system a with it intertwined XXX-volt lot powertrain and also It example, and the of For a hydrate e-architecture which

also sufficient expectations. your launch technology our first up actually we and speed will not pace. is the take believe time. per reasonable XX,XXX such a renting also the high It's month. XX,XXX in delivery March in preparation units up every ramping delivery a that prepare to that some realize is so to And live So will month month that we stock didn't of speed year month in that to full December, true and may up then of third this We next

the after or XX,XXX them. a placed And the we subsidy subsidies also that also delivery off around In and turn of a understand and users their be by subsidy. end affect to and later subsidy local year, also who it's cars may of can subsidy their the understandable will ONVO XX% rejected end some In late of by have because XX,XXX national the trading that looked We users have the or side, who amount product of eventually that failure year, become. this order up eventually on not XXX,XXX-something turned and significant also the end for those not of the of at this by -- getting us will to we users year. case, the us some that picked the is subsidy this was and XX% case, all ton

they we actively. the But have ramp-up general, For Firefly, X also will their pace prepare launch the these stores ETX and products, and the in preparation. own for more

Operator

The Lai question comes from next JPMorgan. with Nick

Y.C. Lai

of how is how that expense question support volume. XX,XXX is At by do should vehicle time, find -- into possibility strategically, slower in probably same recent in first My the do the you we And, just quarter incentive between obviously JPMorgan. from William the RMB Nick year-end. William balance has that and mentioned months, the volume. third that's margin sales for the at reduced

to and So medium in with have share longer other us margin word, margin do think the Or margin to we about with vehicle remember past, in XX% volume? profit even and about the profit term, in Can desired in can vehicle XX%, between medium longer should how . strategy? you or a we I XX%. longer-term the term? the share you XQ a volume between talk balance us longer-term margin

Stanley Qu

for [Interpreted] Stanley Thank you is question. the speaking. This

William, by brand the product volume the Regarding profitability. our also the for after the primary as your premium focus profitability, to brand, balance in and is our between positioning and question the keep NIO launch on mentioned improve ONVO, of our

be incentives. October, back will now So product dial beyond. and our started this from starting on our to And also we focus promotions and

the chain, bounce-back improving that this quarter, take strategies momentum brand, affected third target for positioning brand to margin But keep brand volume. gross vehicle the for it's the For marketing and brand. And has baseline. it XX% a vehicle . And target the we -- month the also short going XX% confident the order and to the enhancing we set the for are in sales or quarter, in year. QX NIO see and supply margin of NIO leave as backlog. XX.X% of XXXX, we XX% as margin our operations, in And forward regarding realize and with the year so, past on at around term, this by X target fourth will NIO we we we our a premium our gradually to up the of for

Y.C. Lai

My OpEx high -- higher guidance. on. ETX are so product second is 'XX new and CapEx brand into question Firefly launching also we to and related

you in -- guidance the OpEx well as in ratio give OpEx regarding us CapEx 'XX? So can some

Bin Li

the for You Thank [Interpreted] question.

As we ETX the deliver there new will from models and second be coming mentioned, will third start starting next to and brand. also year, our our

our will improvements So be over speaking, there with OpEx.

such preparing mainly brand. we can were for As increment of the and the around will third we SG&A up are we this the now, brand. have ONVO also to the of year, is force the That QX in as in already running our see, continue we ONVO stores see and launch in south -- because preparing year, we around network right XXX end continue this China. the an expenses will you and to expenses. stores actually, increase And have in the of sales in QX XXX plan for quarter And by

So need for target invest we improving we in realize XX,XXX our stores. those March keep year monthly the next that network In in to will our and target. force. And case, as need will and to facilities also to sales meantime, is a the sales

well are our we capability sales brand up capacity the the ONVO QX as when the going expenses also gradually and But SG&A and year capacity for the and into capability are building next down. established were coming

the big gradually chunk case, moment, quarter-over-quarter that a an starting volume, major of In a year. the revenue, sales this sales from to our at increase taking is So along chunk QX efficiency taking of have our next but level with SG&A come -- will the will year. OpEx, improvement next a our reasonable

RMB actually our around for last Regarding CapEx decrease level. same the around from year. overall CapEx, year, CapEx it this the keep full around And we is at a next had year The billion. will year, X same significant

So we a expenses. our of prudent keep management will CapEx very

Operator

. America. with Li question of next Ming-Hsun Bank from Your comes

Ming-Hsun Lee

from This is Bank Ming of America.

is after the first EU currently, tariff I increased. that Do your the situation in So demand the strategy? my pricing Europe? to impact you That's in want And . to related Europe. know this change question. first is in my question

Stanley Qu

strategy. In with a [Interpreted] Thank sales Europe, the pricing tariffs has prices unified the that has the from we strategy quite speaking still that cost true our for the this but you That actually our and overseas It's of markup with pricing electric battery in on also in a tariffs, significantly. China, up question. for while it the volume on affected vehicles adopt gone Europe top. market, is because basically case,

on At improve for improving However, needs service the user the term. we will Understanding long on stay sales and always our to local network. moment, our services and and is aiming of the European the users for the strategy the focused market satisfaction our products.

volume. prioritizing this -- of This we've focusing where than the even is the targets several actually our not because before simply tariffs the key source is just been strategy on tariff

also We have the the by that is satisfaction for good. the investment is awareness. European policy. and our will European long while And business. entered maintaining the tariff a for our need case, have sales of volume term. good Europe market is Norwegian a to that make In countries target we our already Norway affected in pretty reasonable Again, user still also not we improving into sure out brand our X

Ming-Hsun Lee

gross But continue So my the assume related around brand your gross XX%. to ONVO is around margin brand. for XX,XXX the of this XX,XXX for for second question reached the gross brand, is delivery ONVO because brand brand. is mentioned gross for ONVO units margin will when profile to to Stanley margin will deliver just profile what about potential units in And profile rough NIO the XQ, monthly you in I XXXX, what the margin improve

Stanley Qu

[Interpreted] question. Thank for the you

started as LXX also just ramp-up stage the single the digit. we very in product vehicle positive early but year, users, is user deliver margin not at this and launched For the for for the to have and exclusive because margin, actual It's high. the ONVO the early rights the of of gross the

for product overall target year, brand, lineup, will baseline For of as year be next will for and for around cost And that for ramp to joining brand be the vehicle work we structure margin and continuous on next ONVO will be products with around the XXXX, on. with overall XX%. the the next our that the for we believe margin more year and our expect XX%, improvement the also up vehicle year, the volume, production delivery we the both ONVO its the that capacity

Operator

Your Bin Deutsche Wang from comes with next . question Bank.

Bin Wang

half. products about is in product second the My new

growth robust and ETX a always a would products NIO such 'XX be in brand. first have niche half the we mentioned just the as You and

Do volume generation the fee you XXXX your and refresh second thought to continued such go not ETX. in will for ESX, However, what's generation products, Touring half. second the half. mean digital the products ETX, ETX plan for the or to as All

Bin Li

[Interpreted] you Thank for the question.

our product platform next the facelifts and be be of the For the first also NIO ETX will from under upgrades will in be latest the products Those our the be products brand, also facelifts There generation There upgrades. and and products. next-generation will upgraded the off pipeline. year, existing coming are other to platform. will

. will by XXXX in basically, NIO products of complete our XXXX, and we step. the So existing upgrades set

ONVO the Regarding brand.

deliver and have But for year, to in market are year. the family pipeline, product, into will X Next continue these we the also ready the in getting X to next SUVs another our the we is meantime, also sell and in LXX. products they production. of good progress, first mass The ready R&D launch

with the complete under into brand. family for we ONVO a X these -- Regarding market, products the lineup launched have will SUVs

X-seater be performance. new SUV. structure cost their SUV And another X X a be large-sized these mid versions For X X products, offering X the will regarding these and are competitive pretty large products with a and and super will product

A for to LX the of proper benchmark LX auto. will look and be

LXX XX,XXX, will auto, that, RMB at ONVO LX will USD the It price If you and price be -- strategy. our similar for competitive. sorry, with you XX,XXX and also our understand the highly X look next is the pricing the be with price the with rough difference from And will probably range SUVs.

service places brand are very meantime, China. in network, of case, year. we the with are with In with network swapping our more available level the facilities especially also In that in the ONVO confident comprehensive and charging we performance sales overall next network, the county more completing and

next the We where year. named will our going very product and the the of Firefly. Firefly, strategy first Firefly follow same The the are brand share product name. the to we actually actually Regarding is product first deliver mini

details share the to this We Day. the at on December going of year XX project and more brand our NIO are on

will Our the brand we will product. official making an also be first and debut unveil

volume product And with overall our the on speaking, year doubling year's will we and with be top entire that very lineup next sales are results. this confident of this for company, brand

Bin Wang

to third the your question second the driver in service X [indiscernible]. have because the net double quarter your AOE. about going service. and the margin I single-digit margin actually third It's gross in to year margin in the And margin Can got this next service? you for in for hold quarter what's sales negative the guidance year, explain for increase be improving what's you number a quarters XXXX the

Stanley Qu

question. [Interpreted] Thank you for the

of in because margin quarter, vehicle the mainly X Regarding drivers. third the is it improvement the

and is quarter, cost the The amortization and and are is more that the the sales case, the of is parts. batteries production improvement also first the such on components, including leveling we side. we on the pulp the volume, up our improvement improvement other significant as And driver our ramping also manufacturing volume than up. leverage and previous third optimization quarters. capacity the better In is, efficiency can and the second In

NIO our With the margin XX.X% going that, XX.X% QX quarter, we in have QX. in to fourth improved And into brand. the vehicle from for

also we mentioned, the brand. the cost and As that we focus of by confident the improving and will expenses will With a margin keep our in this we've In be we our back premium realize supply for improving enhancing this on can marketing year positioning vehicle the that, the structure. XX% dialing promotions product QX that NIO case, of keep brand. the profitability gradually are chain

continuously drivers also the we the margin, improvements will chain year, Going our the supply and into look side. to for including on supply key several improve next vehicle

to realize also our more brand more can cost are by structure there structure. for year, also NIO next XXXX. integrations improve iterations mentioned products several margin NIO XX% smart we portfolio, the which introducing will facelift the a new brand. also, our be hardware, year, further vehicle the into and there Next that, can William, And be competitive on as and profitability the overall in by with the upgrades will products cost we on brand of confident major and With improve competitive

Operator

comes question next Yuqian Ding HSBC. Your with from

Yuqian Ding

X got questions. Yuqian here. I've

in of What's -- months see The to milestone biggest the processing management breakdown account? What first NIO's key moment? on modeling, is capability. and a on coming power Maybe highlight this a the end-to-end the of the of the XX user the bit the autonomous us the would development, terms key cost. would NIO X say for at give What adoption driving. in is challenges this

Bin Li

[Interpreted] in architecture Model, have NIO based solution NIO word Thank Actually, to for late In also World and features functionalities release question. and introduced this the on experience assessments XXXX, invited on and you the internal before for new on the testing World already also NWM we have and active some the July, model end-to-end NIO users the already of have the we Model we NIO at vehicles. some based have of and that, architecture. the started and testing safety and safety in released the performance third-party an electric active some

actually navigation also Our than it guided driving is for deliver the for performance the peers. brand, of And to first the our is good, urban smart many better ONVO vision-based a brand pretty road.

appreciate have Recently, like and that. users just we really new also and our also launched it release a

also coming end-to-end the the from smart computing in be this benefits X should that on And our the this for sensing are always and Model, releases. there have our the And these have see data be loop months, that have And we we and effect regarding the success we our vehicles driving, that of And -- road [indiscernible] the it we following are principles. actually and capabilities with leveraging maps gradually, chosen serve you will our solutions. interest will the have confident of several all these map, we entire roadmap. And we is capabilities. investments. in industry, and case, R&D with speaking, overall road the Word close and power our In users. there principle different So will also will result

should safety driving is -- our human as pressure the and future, releasing such target target. by than the The the And of our the at that stress feature, actually experience should safety reduce driving smart of fully a drivers, is secondly, XXx tests On be with users of higher also will the level further for is that, first the driving priority accidents then the top of this is should And we achievable the and that driving safety year, And and human features. always drivers. driving. next the the accidents. by driving the usability assisting look relieve smart . good top an securing our of pressure the of a of traffic

other safety, the features like active feature. benefits started the improving our we see and with our MXA safety we We have our for on users of same significant approach that with

Yuqian Ding

second breakeven exciting, a capital also looks cycle The -- is year on with question OpEx CapEx and it with requirements. and strong coupled intensity. loaded is like product fully very next

refreshed we And the to we do capital coming the requirement So a have XX timetable? breakeven how do look months? in at XX

Stanley Qu

you for [Interpreted] Thank the question.

continue target funding the and on our will year volume for quarter-over-quarter growth OpEx the sustain CapEx of this double flow. realized free cash the And the guidance, expect continue XXXX, delivery In current a that requirements our quarter will as by flow on we have capitals. and our the to controlling such of the for flow. the to we to year, and the our third Regarding we activities. positive according pace we a free growth also cash And and volume QX, positive in operating

I in So the regarding on like regarding the would fund fundraising have capital requirement, perspective. general, from Instead, to question agenda. answer requirement, adjust our to we're we profitability, that your a will we don't raising. And must-to-have

we coming sales we margin. to realize is be our introduced that the to higher with product company, X still a confident now, very just us for is with volume, the will into brands is volume the and vehicle X able have factor as second products are regarding first for volume new And still coming a important the and the consider. all And also young sales of The brands years. market, automotive new next year. in we the

margin We improve QX also improvement third and will volumes. from saving our continue initiatives. this our with vehicle sales year, efficiency the together cost to continuous And is

and company, expect just our also mining with all or reduce cost cost waste the good actually and With with on we this will we started be structure operations, initiative. also identify a project gradually that, improve pretty improved we loss also with see effect the called improved volume And to costs aspects. of Inside save the that narrowed.

Bin Li

[Interpreted] Stanley the approach This just is loss. William speaking. narrow to our introduced has

term overall still, so But the be network level. because our this to to SG&A gradually also and we narrow And networks swapping right R&D and Power the need relatively high that SG&A the will sales roll the will the we Regarding for plants, on and our ONVO brand, of expenses, the our expenses App to will we track out continue expenses, at will are our stay losses. make be for pressure. we charging can build also under sure up will expenses

And our profitability, that entire achieve will target. where XXXX the full to breakeven. we as timing to And be regarding will the also use strategies activities we planning year company the the according and

Operator

question next CICC. comes with Deng from Xue Your

Xue Deng

So my overseas a following-up first market. the question for question is

culture So our European brand but market. market also their quite we accelerate see pioneer, the peer now companies, actually brands they and in Europe we some as automotive early a

new especially European So can year, further and also targets where to volume. there aggressive we extension strategies, current, our models Also, you launch like year. brands market can whether the be with share of combined Firefly next our differentiate overseas expand next our

Bin Li

the starting question. expectation. live didn't the be our will a market these X and actually pretty the its and we will broader for for NIO premium globally. continue is the difference you a year, Especially and be able our brand, to brands brand. really the regarding for ONVO Firefly, also operations And role also Thank original to and European while these NIO a third another Yes, and market a our step. leveraging this our in expansion, is With [Interpreted] for European vision. second have that has were long-term in year international up a brands is that, next NIO, this our true next and the brand for expectations X market in overall performance It's bigger playing it been

of but limited, with is we price the expansion strategy. Now par In and and we of brand will market. long-term more selling the with global our will Firefly prioritize price a basically the But the it's NIO will market Europe, in its meantime, That keep on that tariffs a becoming with still the in presence the the brand. the more ONVO case, push. is European be in

are see the in will more you and becoming X Firefly that year, regions. next products ONVO starting countries available So

brand the network another global network. started it established also, the difference is now Power then sharing we brand with according premium and to the and the ONVO market, the brand the ONVO to all charging when ramp has the And it the case, for the brand definition Swap than actually, brand. Chinese In brand. charging market. and established NIO in is actually and for that deployed and larger can ONVO product Swapping this to stations facilities And resources the comes high the leveraged here a market, NIO Power segment. be we will And that positioning, then faster But a much the up by NIO

the brand brand ONVO NIO brand. establishing ONVO we actually, and with markets, the in be the centering And the brand Firefly for facilities will the and global charging global on will that, the market. swapping the rely on So more

Xue Deng

the Okay. loss. to My is question second regarding sales other gross

can be lock significantly I charging the increase to our see the sales also like sales in our we our of related the and volume for may increase previous narrowed other so the and charges swapping and think So services. quarters, which in also gross

expectation positive. gross forward when an And they how So look we the do can have other trend whether profit to of margin turn sales? the of we

Bin Li

Thank you question. [Interpreted] for the

we power losses still in in services. third self substation efficiency our of structure hand, deployment has and improve margin. the and -- hand, continue Regarding our to also hand, we This our narrowed And of the have second will slowed in the the on third and have the coming other But Power the because been services. the net had improving stations. business will that, X pace X because With and network also loss the the is mainly improve down business, gross on on outer Swap profitability of the efficiency other we other the on aftersales the narrowed construction quarters, the the generation we quarter. the fourth quarter, of of

that other entire so the will for stations hand, other the brand, we infrastructure need facilities we ONVO the on cost have company, up especially our and structure speed our to However, will Power Swap And than the actual the need. context and coming speed the swap advance for up quarter, with Up in Power installation earlier in station. meantime, the will our brand this we built of construction

the the With services Swap That on after on can speaking, other the higher hope Power offset deployment strategy. loss we will But profitability we the these improvement on our loss overall be have that, there will overall that advanced facilities. a be of or business. the

Operator

from next UBS. Your Paul comes Gong question with SPX

Paul Gong

here. questions Two

to with is How put now. The over, the carry it you first stimulus units season perhaps delivery for par of kind and volume visibility? XX March regarding of visibility the right a of XX right the question season the Will delivery? the that help with such into you of be visibility is the now, pretty have to from consider be you do of strong now QX the auto would takeout the But amount Avon to delivery let's on XX,XXX you XX peak for and in say, moving the for with Xiaomi demand confident Or the seem in to have LX when going March. QX do support. is backlog [indiscernible] you less a such how policy significant XX,XXX

Bin Li

you for the [Interpreted] Thank question.

vehicles our actual at demand this delivery wait rate case, long. also yet for LXX any past But confident products. for as this pretty higher will demand were of relatively forgive several recent will to affected of existing -- are the disclose than is wait conversion starting you cannot I of Please that to disturbance. rate. the the new conversion is see the high if LXX subsidies order, drive from months number, rate look a in In car. be on time the the short-term the some And the time LXX, year, is in the We the the as next for you specific that because me

competitive stores So the with our even coverage enhance we competition with product the a focus sales its the the overall in this market. speaking, of moment, are And is to competitive price, to main such and for the product At with also Tesla, service coverage the XX network. and has enlarge expensive then coverage -- and we will around not next as is enough. step, it comparison for almost moment, confident a against we in the

open will stores. we more So

capability, see next be the the enlarge confident same and in as it the force In the will basically enhance the January for and overall competitiveness LXX's gradually, all subsidies will of stronger product were for that in removed with segment. a will because these will sold similar our case, We sales and competition. on performance. starting capacity the be effects you products year level actions. are And we established positive sales with But also

Paul Gong

is question second the platform, generation regarding My next NTX.

the the ADA, do the motor architecture, NTX think battery has et some size, of, of [indiscernible] improvement about I driving the the we significant the including NTX the say, were designing in NTX, and computing calculation integration you a the of how has versus the efficiency. now, platform also and powertrain the cetera. power of system the improved thinking power, Right autonomous let's terms the think for power of

bit please? color the us So give little technology can of direction the platform, of NTX . you a

Bin Li

ETX by brand, our architecture, from high-performance will generation smart the things, many coming the our the equipped driving sensors. architecture latest [Interpreted] advanced the operating driving technology system, also and chip new capabilities smart It new for be with For off is the and enabled platform. first developed high-voltage in-house model including

if performance, our third-generation the is level. So the on basically products these technologies will quite configuration its It our of different look products. gradually, And be is from down trickling at it existing different at a and any you future to platform.

and existing iterate products. We our will upgrade use these technologies to

ETX, it years. the in investment achieved past results the and our of embodiment the XX And is R&D for

Operator

comes question Sachs. next Your Tina with Goldman Hou from

Tina Hou

first The expenses. X operating regarding is

in around In third develop should expect type new that are then continue close R&D other level launched of that we're R&D, And R&D is autonomous looking LXX. kind new for there X invest I one launch and sales we going in XXXX, at? of X also seeing as spending to to RMB versus fourth the to similar what year, also of expense terms ONVO XXXX, higher products the models. in technologies. this But next 'XX. we of and and usually For year, quarter, we see we model, QX billion about seasonality -- to -- driving continue What quarter, a of marketing

SG&A to the the down going understanding Is -- correct? sales my is terms the growth. like expense seem doesn't in slow of it So

Bin Li

for per [Interpreted] in projects the -- the of will our we in the different X because Regarding of expenses, stabilizing stages the will R&D for R&D, and the we the be investment quarter. every there and the actual around R&D But billion in at general, having differences quarter, spending around and of will product at be actual level. be spending also ups downs that

are be is be expenses to accordingly. be the also because For quarter. at these the example, different than of products and of R&D and higher expected of cycle the fourth the expenses That in third this mainly year, also the will higher will is the quarter or stage different

per also billion basis. same non-GAAP around year level. the X keep -- of the expenses at our the R&D the For RMB XXXX, quarter around same will on that we is at

projects keep on also will quarterly And with as around will R&D similar team people. it the be be XX,XXX But there in slight in product We downs the progress size, -- also expenses and development, we ups the with and R&D around basis. in $X R&D general, will then billion. a our

that this can in ratio expenses up but the we with quarter-over-quarter mentioned, line the so our will that overall also volume, expenses, Regarding resource as SG&A also have revenue. we of SG&A going comparison increase in to also the make we we will optimize sure sales of as SG&A manage the the

Tina Hou

losses the investee. So of question share of is regarding my second

a have seen has over and seen that negative we've quarters, we X number So that number the past expanding. been

forward? So And equity operation? as think we a invested Service loss about should related Battery the this the from is then to going how this

Bin Li

upstream and centering is for is the quarter, went the highly the up, which made as on competitive our understandable are industry. have [Interpreted] because loss also acceptable In this Thank share they we into some in also in question. and equity the of downstream of third the entire an mainly you for the losses companies has third because quarter, the mainly of And it's the investments of increase. industry. a the the investee, company, losses That

which have the that the this actually actual that of battery of with in the have it after Service since both ONVO business, the if forward. QX -- and actual our rate NIO adjusted actually our growth profitability business a the means promising battery at going witnessed the prices this is half [indiscernible], has management In bus year management. as pretty shares take terms because a losses its monthly service you asset the not on for case, worsen asset company, we look business experienced the terms Battery into the products market, fee, in second on with especially subscription higher we In it will a

Operator

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

Rui Chen

today. us again you Thank joining for

any us to feel have IR please the you call. through conference free concludes This our contact If provided further website. contact the questions, information on

you. disconnect Thank now your lines. may You

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