Ladies and gentlemen, thank you for standing by, and welcome to the NIO Inc. Q2 2022 earnings conference call. At this time, all participants are in a listen only mode. Please note today's conference call is being recorded. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Ms. Eve Tang from Capital Markets. Please go ahead, Eve. Good morning and good evening, everyone. Welcome to NIO, the Q2 2022 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted at the company's IR website. On today's call, we have Mr. William Li, founder, chairman of the board and CEO, Mr. Steven Feng, CFO, Mr. Stanley Qu, senior VP of Finance, and Ms. Jade Wei, VP of Capital Markets. 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. 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 includes 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 the unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr. William Li. William, please go ahead. Hello, everyone. Thank you for joining NIO's Q2 2022 earnings call. Benefiting from the continued demand growth for premium electric vehicles and NIO's outstanding product and service competitiveness, we believe the vehicle deliveries will witness robust growth in the second half of 2022, with the delivery and production ramp up of ET7, ES7 and ET5 based on the NT2 platform and the upgraded 2022 ES8, ES6 and EC6. We expect the total delivery in the Q3 of 2022 to be between 31,000 and 33,000 units. In terms of financial performance, despite the significant increase in battery costs in Q2, the vehicle gross margin reached 16.7%, contributed by the deliveries of ET7 with high specifications. Part of the orders with adjusted prices and refined management of sales policies. 接下来我跟大家交流一下公司研发和运营方面的一些重点工作。 Next, I would like to share some recent key highlights of our R&D and operations. 作为蔚来NT2平台的第一款产品，ET7上市后凭借其行业领先的软硬件平台与智能化体验，在中大型高端轿车市场展现出了极强的产品竞争力。 As NIO's first product based on the NT2 platform, the ET7 has demonstrated a strong product competitiveness in the mid-large premium sedan segment with its industry-leading software and hardware platforms and the smart digital experience. 6月15日，蔚来发布了NT2平台的首款大五座SUV ES7。ES7传承蔚来高性能基因，拥有极致的操控与安全表现，达到超越期待的舒适感和智能体验。此外，ES7还可选装隐藏式电动拖钩，拖挂房车上路，提供全新户外体验。ES7在八月份用户试驾开始后，得到了很好的市场反馈，已经于8月28日开启批量交付。 On June 15th, NIO launched the ES7, offering mid-to-large five-seater SUV based on the NT2 platform. Inheriting NIO's high-performance DNA, the ES7 boasts ultimate driving, handling, and safety performance, creating comfort and intelligent experiences beyond expectations. In addition, ES7 offers an electric tow bar as an option, enabling a new outdoor experience with a towed touring caravan. Since the start of user test drive in August, the ES7 has been well received in the market and kicks off deliveries at scale starting from August 28th. 我们也发布了搭载智能系统Alder的2022款ES8、ES6及EC6，感知硬件性能全面增强，算力全面提升，提供更丰富的数字座舱体验，强化了现有866车型的产品竞争力。 We have also launched the 2022 ES8, ES6, and EC6 fitted with the new digital system, Alder, which comprehensively enhanced the perception unit and computing power. The three products offer richer digital cockpit experience and have strengthened their competitiveness in the market. NT2平台的中型智能电动轿跑ET5的量产工作也在全力推进中。ET5的性能与配置相较发布时得到了进一步的优化与增强。ET5拥有纯粹且极具未来感的设计，极致的性能与出色的智能化体验，综合竞争力远超同级别车型。我们有信心ET5在中型高端轿车市场将成为最受欢迎的车型之一。ET5将于9月9日正式开始锁单，首批车型将在9月30日交付用户。 The mass production preparation of the ET5, a mid-size smart electric sedan based on NT2, is also in full swing, while its performance and configurations have been further optimized and enhanced compared with those at the time of the product launch. With pure and progressive design, ultimate performance, and outstanding intelligent experience, the comprehensive competitiveness of the ET5 far surpasses the peers in the same segment. We are confident that the ET5 will become one of the most popular midsize premium sedans. The production order confirmation of ET5 will start from September 9, and the first batch will be delivered to users on September 30. 智能系统方面，我们在八月份发布了基于NT2平台打造的Banyan 1.1.0版本，推出了超过60项功能新增及优化。在数字座舱和驾驶体验方面，此次更新推出更多驻车场景模式，丰富了座舱语音体验，并在悬架舒适性、车辆操控性方面进一步优化。自动辅助驾驶方面，我们也进一步升级了运动环境的模拟显示以及全向的主动安全功能，增强了用户的系统交互体验和行车安全。 With regards to digital systems, we released the Banyan 1.1.0 based on NT2 in August, with over 60 new features and optimizations. In terms of the digital cockpit and the driving experience, this update has introduced more modes. Under the parking scenario, diversified the audio and the video experience in the cabin and further optimized the suspension comfort and the vehicle handling. In the aspect of the advanced driver assistance system, we have further upgraded the environment to simulation display and automatic emergency braking, which helps to enhance the interaction experience and the driving safety for the users. As for production, we rolled the first batch of the ET5 pre-production vehicles off the production lines at NIO's Factory 2 at NIO Park, and we plan to start the mass production this month. With regards to sales and the service network, we now have 395 NIO Houses and NIO Spaces in 149 cities across the globe. 263 NIO service centers and the delivery centers covering 151 cities in the world. In terms of the charging and swapping network, we have built an expressway power swapping network covering 5 vertical and 3 horizontal expressways and 4 metropolitan areas in China. We have installed 1,094 Power Swap Stations, including 285 situated by the expressways, and completed over 12 million battery swaps for the users. At the same time, we have deployed 1,873 power charger stations, including 5,341 power chargers, and 5,466 destination chargers, and connected with more than 560,000 third-party chargers, offering over 860,000 times of one click for power services. NIO is dedicated to putting in place a power system with chargeable, swappable, and upgradable experiences, making the recharging experience better than refilling. To this end, we have been making continuous investments. With a vertical and horizontal network across the country and a hub and a spoke layout in the metropolitan areas, we aim to bring a more convenient and joyful travel experience for the users. Power swap stations are not only efficient recharging facilities, but also serve as virtual power plants. During this summer, we responded to power grid peak shaving in different cities, while over 100 stations. In the meantime, up to 60% of the stations are regularly involved in the off-peak charging by increasing the electricity consumption in off-peak hours. To support energy saving and emissions reduction, new power swap stations will continue to support power grid demand response and off-peak charging in more regions. As for the global market, with the NIO ET7 being shipped to Europe in August, the order placement and user delivery of our new product will take place in Germany, the Netherlands, Denmark, and Norway this year. 八月二十八日，经过蔚来用户社区的积极参与，合肥被选为NIO Day 2022的主办城市，NIO Day 2022正式进入筹备执行阶段，期待届时和大家分享我们在产品和核心技术上的最新进展。 On August the 28th, Hefei was chosen by our user community as the host city for NIO Day 2022, and the preparations for the event have been officially kicked off. We look forward to sharing with you all the latest progress regarding our products and core technologies at that time. 蔚来作为智能电动汽车行业的参与者，始终致力于积极践行社会责任，助力全球可持续发展。在创立之初，蔚来一直赞助支持中国大学生电动方程式，并在去年开始支持中国大学生无人驾驶方程式。今年八月，蔚来也正式成为德国大学生方程式的合作伙伴。我们期待通过对赛事的支持，助力全球汽车工业青年人才的培养。八月十五日，蔚来还与联合国开发计划署UNDP正式达成合作。UNDP作为Green Parks平台的贡献方，将与蔚来在自然保护区的环境保护、青年创业者的生态环境保护、商业解决方案等方面开展深度合作。 As a player in the smart electric vehicle industry, NIO has been devoted to practicing corporate social responsibility and supporting global sustainable development. Since the very beginning of our establishment, NIO has been endorsing the Formula Student Electric China. Starting from last year, we began to endorse the Formula Student Autonomous China, FSAC. In August this year, NIO officially became a partner of Formula Student Germany. We would like to contribute to the development of young talents in the global automotive industry by supporting this event. On August the 15th, NIO officially entered into a partnership with the United Nations Development Programme, UNDP. As a partner of the Green Parks platform, the UNDP will conduct in-depth collaborations with NIO in areas such as the environmental protection of protected areas and natural reserves, and supporting social entrepreneurship to encourage young innovators to explore business solutions to advance biodiversity conservation and ecological protection. 2022年下半年是蔚来多款新产品交付和爬产的关键时期，这对供应链、制造、质量、交付和服务等多方面都带来了巨大的挑战。我们将与内外部伙伴一起紧密合作，提升体系化效率，加速车辆的量产和交付工作，保障产品质量和服务体验。 The second half of 2022 will be a critical period for the delivery and production ramp-up of multiple new products of NIO, which will present huge pressure on the supply chain, production, delivery, and services. The teams will work closely with other partners to improve system efficiency, accelerate the mass production, and the delivery of our vehicles, and ensure high quality products and service experience. 感谢大家的支持。现在 Steven 将为大家介绍 2022 年第二季度的财务业绩。有请 Steven。 As always, thank you for your support. With that, I will now turn the call over to Steven to provide you the financial details for the Q2. Over to you, Steven. Thank you William. I will now go over our key financial results for the Q2 of 2022. To be mindful of the length of this call, I will reference to RMB only in my discussion today. I encourage listeners to refer to our earnings press release, which is posted online for additional details. Our total revenues in the Q2 were RMB 7.3 billion, representing an increase of 21.8% year-over-year and 3.9% quarter-over-quarter. Our total revenues are made up of two parts: vehicle sales and other sales. Vehicle sales in the Q2 was RMB 9.6 billion, representing an increase of 21% year-over-year and 3.5% quarter-over-quarter. The increase in vehicle sales year-over-year was mainly attributed to higher deliveries. The increase in vehicle sales quarter-over-quarter was mainly driven by higher average selling price. Other sales in the Q2 were RMB 0.7 billion, representing an increase of 34.6% year-over-year and 8.2% quarter-over-quarter. The increase in other sales year-over-year was mainly attributed to increased revenue derived from auto financing services, sales of service and energy packages, and sales of used cars. The increase in other sales quarter-over-quarter was mainly attributed to the increased revenue derived from sales of used car and auto financing services. Gross margin in the Q2 of 2022 was 13.0%, compared with 18.6% in the Q2 of 2021, and 14.6% in the Q1 of 2022. The decrease of gross margin year-over-year was attributed to the decrease of vehicle margin and reduction in other sales margin resulting from expanded investment in power and service network. The decrease of gross margin quarter-over-quarter was mainly attributed to decrease of vehicle margin. More specifically, vehicle margin in the Q2 was 16.7%, compared with 20.3% in the Q2 of 2021, and 18.1% in the Q1 of 2022. The decrease of vehicle margin year-over-year and quarter-over-quarter was mainly attributed to increased staff cost per unit, which was partially offset by favorable changes in sales mix of ET7. R&D expenses in Q2 were RMB 2.1 billion, representing an increase of 143.2% year-over-year, and 22% quarter-over-quarter. Increase in R&D expenses year-over-year and quarter-over-quarter was mainly attributed to increased personnel costs, the research and development functions, as well as the incremental design and development costs for new products and technologies. SG&A expenses in the Q2 were RMB 2.3 billion, representing an increase of 15.4% year-over-year, and 13.3% quarter-over-quarter. The increase in SG&A expenses year-over-year was primarily due to the increase in personnel costs and costs related to sales and service network expansion. The increase in SG&A expenses quarter-over-quarter was mainly attributed to increase in personnel costs and increase in marketing and promotional expenses, including expenses related to launch of ET7. Loss for operations in the Q2 was RMB 2.8 billion, representing an increase of 272.8% year-over-year, and 30% quarter-over-quarter. Net loss in the Q2 was RMB 2.8 billion, representing an increase of 369.6% year-over-year, and 54.7% quarter-over-quarter. Net loss attributable to NIO's ordinary shareholders in the Q2 was RMB 2.7 billion, representing an increase of 360.4% year-over-year, and 50.4% quarter-over-quarter. Our balance of cash and cash equivalents, restricted cash and short-term investment was RMB 54.4 billion as of June 30, 2022. Now this concludes our prepared remarks. I will now turn the call over to the operator to proceed our Q&A session. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speaker phone, please pick up your handset to ask a question. For the benefit of all participants on today's call, please limit yourself to two questions. If you have additional questions, you may re-enter the queue. First question comes from Tim Hsiao from Morgan Stanley. Please go ahead. I've got two questions. The first one is about the component supply crunch. Because the supply bottleneck continuously kept the sales outside of the models like ET7, should we be concerned about any potential hiccup to the productions of models like ES7 and ET5 in upcoming months? In light of fresh round of the COVID outbreak in China, what has NIO team done so far to hedge the risk of potential disruption to the company's upcoming models, and even for next year's, we are going to have the NT 2.0 upgrade for ES8, ES6, and EC6. What have we done to avoid this kind of risk to our production? The second question is about the chipset. Just want to learn that what's your take on the restriction to the export of high-end GPU from companies like NVIDIA and AMD to China? While near term, the impact to auto industry should be pretty limited. But will that accelerate our need for semiconductor localization in the upcoming models, or even speed up the in-house development of our own chips for functions like autonomous driving in the future. Thank you. 好的，谢谢Tim。第一个问题，确实这个三季度的话，七月份、八月份，我们确实遭遇了一些新的疫情反复的影响。但进入到九月份的话，中国多地的一些疫情对供应链肯定是会有一些影响的。但目前来看的话，经过三到五月份这个上海疫情这样的一些经验教训，我想疫情对于汽车供应链的影响，相对来说还是可控的，和二季度比的话。那当然我们在七月份、八月份，包括九月份，确实受到了一些疫情加速的良率的影响，对我们的产出，我们供应链的合作伙伴的产出，没有达到预期，对我们三季度的交付量是有一些影响的。但我们也采取了很多的措施，帮助我们合作伙伴去提升良率。我们派了几十个工程师，加上很多技能的工作的同事，去帮他们提升良率。那现在已经有一些显著的改善，我们同时也引进了一些新的供应链的合作伙伴。我们相信总体上来说，这个问题应该已经初步得到解决，那我们认为在十月份应该能够得到比较根本的一个解决。所以综合来看，就是我们对于四季度的交付，总体来说我们还是非常有信心的。所以从全年来讲的话，我们对完成全年的一个交付目标我们还是非常有信心的。但也确实意味着我们四季度整个的供应链和生产的量，压力也确实会比较大一些，你先翻译。 Thanks Tim for your question. Regarding the first question. In the Q3, especially in terms of July and August, we have encountered some supply chain hiccups, and we believe the COVID-19 resurgence in some regions in China in September will also affect our supply chain to some extent. Based on our experience accumulated throughout the March and April shutdown experience in Shanghai, we believe the COVID-19 impact is under control compared with that of the Q2. Regarding the mega-casting components, the yield rate is below our expectation and this has affected the vehicle deliveries to our users. We have already taken multiple measures to improve the yield rate of the mega-casting components. For example, we have already sent over thousands of engineers to our suppliers to help them to improve their yield rates. We have already witnessed some improvement. At the same time, we have also introduced some new partners for the mega-casting components. We believe we have already resolved this issue to some extent at the preliminary stage, and we understand probably in October we should be able to resolve this issue at once. Of course, we are very confident about our delivery in the Q4 and we are confident to achieve our delivery targets for the whole year. Of course there will be many challenges ahead of us, but we will try the best to achieve the target and improve our delivery performance in the Q4. 第二个问题就是，最近美国对华的一些大数据芯片的训练芯片的一些出口的一些新的政策。我们认为近期，短期内，对我们的经营不会有实质性影响。因为这里面总体来说，并没有涉及到车用的这样的一些芯片。当然这个AI方面的一些训练用途的芯片，我们现在已经形成了算力，是可以支持下一阶段的AD的算法的训练需求的。当然我们也还和NVIDIA在进行合作，我们也希望密切关注这个动态，包括我们一些云服务商的一些合作，积极评估这个长期的方案。那我们也注意到，中国其实现在也有很多的这种训练芯片的这样一些公司，他们的产品已经都量产，我们当然也会积极地去评估各方面的可能的技术的解决方案，包括和一些更多的芯片公司的这样的一些合作。总体来讲，我们不认为这样的一个近期的变化对公司的长期战略会有实质性的影响。 Regarding the U.S. chip ban related with the AI training chipsets, we believe that this will not have an impact on our business operations. Based on our estimations of our computing power is sufficient for our autonomous driving technology development in the aspect of the AI training for now, and we have been working very closely with our partner NVIDIA. At the same time, we have been keep monitoring the situation very closely. We understand, there are also many AI training chipset companies in China who are, working on the mass production of their chipsets. We are evaluating different kind of technical solutions for this AI training, chipsets, and we would like to work with different companies on this respect. Yeah, basically, we believe this is not going to affect our long-term strategy. 好的，谢谢William。 对，另外一点的话呢，我们也补充一下，我们也在核心的技术领域方面，包括芯片方面，我们的目标是建立一个全栈自研的能力，我们相信核心技术的研发投入，不光只能增加我们应对这样的一些技术变化的，政策、产业政策方面的一些风险，也能够长期提升我们的毛利率，包括我们技术的竞争力。 Of course we are building our core technology and capabilities, including the chipsets, and we believe our target is to build the full stack in-house capabilities in all those key core technologies. We are building our capabilities, and we believe that this is going to help us to mitigate the political risks and the regulatory risks. At the same time, it can also help us to improve our technology powers and also offer gross margin as well. 好的，非常感谢William补充。 好的，谢谢。 The next question comes from Ming-Hsun Lee from Bank of America. Please go ahead. 谢谢，William，还有管理层。那我这边两个问题提问。第一个问题呢，是因为最近，就是包括公司，然后还有整个行业呢，其实竞争也比较激烈，所以说我们公司目前有没有最新的一个，包括这个 sales and marketing，还有这个 R&D 的一个指引，这针对今年跟明年。然后另外，就是我们这个 point of sales 的这个最新的 target。这是我的第一个问题。那第二个问题呢，最近的这个，在这个成都车展，其实包括 ET5 跟 ET7 都有非常好的那个 feedback。那想了解就是说因为现在整个行业的这个产品迭代的速度越来越快，然后包括还有新兴的玩家，所以说，我们怎么看待这个整个行业的竞争，那我们会不会这个更快地加速这个新产品的投放，包括明年的这个产品投放，William 这边如果可以给一些指引的话那最好。然后另外就是之前也看到这个媒体有报道，将来公司还要考虑会有第三个品牌，那目前公司有这样的想法。那我翻译一下的问题，What is your latest guidance, uh, in the SG&A and the R&D ratio, considering the more competitive industry competition, and also overall the slower sales for the industry. Do you have any new target for your points of sale? Second question, your ET5 and the ET7 have very good feedback during the Chengdu Motor Show. Currently, there is more competition and the product iteration in the industry. Will you speed up the new product launch? Also, could you give some guidance regarding your 2023 new model plan? Can you also share, do you have any plan for a third brand? OK, thank you. 好的，谢谢Ming。第一个问题，我们这个确实看到这个行业有非常多的这样的一些新的这样一些同行推出了很好的这样的一些产品。但总体上来讲，我们在这个费用方面、投入方面，我们还是按照自己的节奏在前进的。那不包括这个R&D方面，那我们当然今年是加大投入的一年，这个我们在研发方面的投入，为了一个长期的竞争力，我们进行了非常大的投入。但SG&A的话呢，总体上来讲，占我们销售额的比例肯定都会持续下降的，这个肯定也是一个基本的规律。所以我们不太会因为外部的竞争去更改我们自己的战略和我们的节奏。就总体上来讲，我们研发方面当然我们会持续投入，这个是我们既定的战略。SG&A占整个销售的比例，总体上来讲当然是会持续下降的，这个也是符合我们的发展节奏的。叶副先翻译下第一个问题。 Thanks Ming for your question. In the industry, we have seen many companies launching good products in the market, but in terms of the investment, we would like to follow our own strategy and cadence in terms of R&D. Of course, this is our long-term strategy. We would like to make decisive investment on R&D. This year, we have ramped up our R&D investment to improve our long-term competitiveness, and also for the SG&A as a percentage of the revenue. We believe the long-term trend is this is going down and we don't expect to change our pace or our strategy just because of the competitions in the external environment. We would like to make sure we can focus and determine on our own strategy and pace. 第二个问题就是ET5，我们近期在包括成都车展这样的一些展览上面进行了一些充分的展示。那媒体对外观内饰进行了更充分的报道。我们看到ET5的热度是持续地在升高，用户的期待是非常高的，所以我们相信ET5会成为一款非常受欢迎的产品。后续的话，我们明年当然会有更多新车型的，包括换代车型的发布。我们现有的866的产品，在明年当然都会切换到我们新的NT2的平台，这都是我们计划中的事情。所以我们对于明年我们全系产品都切换到NT2平台以后，整个市场的表现，我们还是非常有信心的。我们确实不管是在ET7还是在ES6还是在ET5上，我们看到我们在NT2平台的技术竞争力，用户是非常非常欢迎我们这样的一些创新。当然具体的细节，我们再有一些时间去跟大家交流。但总体上来讲，我们明年会加快新产品投放的节奏。 Well, for the ET5, we have already showcased the ET5 in different aspects in the Chengdu Motor Show and other exhibitions and auto shows as well. We have also received a wide range of media coverage for the ET5. ET5 has attracted a lot of attention for the users, the public and the media, and we have received very good reviews and feedback from the user itself. Next year, we plan to further launch more products based on the NT2 technology platforms, and we plan to upgrade our current ES8, ES6 and EC6 to the new technology platform 2.0. We believe with all the products rolled over to the new technology platform 2.0, we will be very confident regarding our market performance at that time. Because if we look at the ET7, the ES7 and the ET5, we can see the comprehensive competitiveness of the NT2 technology platform, and we have launched many innovations that have been very much welcomed by our users. Of course at this moment I cannot share much details regarding the new product launch, and we would like to say that we are going to accelerate the ramp-up of our new products based on the new technology platform. 第三个问题，我们一直是希望能够把我们的产品和技术能够让更多的人使用。但另外一方面，我们确实也要去注意不同的价格区间用户的需求，然后包括对品牌的这个认知，对品牌的需求是不太一样的，对产品和技术的需求也是不太一样的。我们在积极地思考，如何让更多的细分市场的用户能够享受到智能电动汽车最新的这样的一些技术的好处。这个是我们会积极地进行这方面的规划。 Regarding the third question, of course, we would like to have more and more users to use our products and enjoy our technologies. At the same time, we are going to pay attention to the users' needs and demands at different price range, and users of different brands may have different needs regarding the products and the technologies. For us, we would like to have more smart EV users to experience our products and enjoy the benefits of those core technologies, and we will make decisive planning regarding this. 好，谢谢，谢谢您。 Our next question comes from Bin Wang from Credit Suisse. Please go ahead. 各位领导好，我有三个问题向各位请教一下。第一个呢，想问一下公司是否维持之前说的下半年十万台的销量目标，如果维持这个数字的话，也代表四季度要做到六万八千台左右，那么是否代表就是十月份就得到两万台，比如说十一月份两万二，十二月份两万四到两万五，是否维持这个指引？好，这是第一个问题。好，第二个问题呢，想问一下，就是订单，因为我们做了一些中端调研，发现呢，ES7、ET7都要等三到四个月，ET5就要等到明年了，很多时候。那么按期待销量的话说，那么ET7是否就有一万五以上的订单，ES7也会有一万五以上，ET5会超过五万台，想，这么加起来的话就超过八万台订单了。想问问看这个预测是否合理哈？这是第二个问题。最后这个问题呢是关于毛利率，因为我们已经感觉到公司的二季的毛利率其实比原来的指引相比掉三到四要更好的。那么想问问看三季度的那个毛利率的方向是否是上升的？因为我们好像涨了两次价嘛，有些第二次涨价的话呢，应该在这个三季度得以体现，那么量也会更大。能否说呢这个，三季度的毛利率至少回到一季度的水平。好，这是我三个问题，我翻译一下。 My first question is about the full year volume guidance. Basically, you already predicted a guide for the second half this year, the volume guidance will be 100,000 units. If you consider your Q3 guidance, that means that in the last quarter, Q4, your volume will be roughly around 68,000 units. Is that true? Or roughly say in October 20,000, in November 22,000 and December 24,000-25,000. Is that the right way to think about your volume progress? That's number one question. Number two is about order backlog. We actually did some dealer visits and calls to dealers. They told me that they have a 3-4 month waiting list for all the new products. ES7, ET7 and ET5. Can I view you got 15,000 orders for ES7, 15,000 for ET7 and roughly 55,000 for ET5. Together you've got 80,000 order backlog. That is a similar right way to think about order backlog. That's the second question. Last one is about margin outlook in the Q3. Basically the Q2 guidance previously is that will be declined 3%-4% QoQ, although I know that margin seems to be better than your guidance, right? What's your outlook for Q3? You actually have been raising the price for two times, right? For all products. Should the Q3 gross margin return to a level in the Q1 this year? Thank you. 好，谢谢王斌。第一个问题，我前面其实也讲到了，我们还是会力争完成我们这个年初的一个目标啊。但当然这个意味着我们Q4的这个交付的压力和供应链的压力确实是非常大的。但我们在三季度我们也在从各方面吧去进行了一些充分的准备啊。那四季度的话，因为我们有两个工厂开始去生产，那我们新桥的这个F2的工厂的话呢，从这个三季度吧，一直都在进行这个调试和这个大规模量产的准备啊，我们还是非常有信心的，因为它初期的工作会非常的单一，就是生产ET5啊，这整个工厂就是在生产ET5，所以它的生产的复杂性也会低很多，相对来说的话。所以总体上来讲，当可以展望四季度，我们当然毫无疑问，我们会克服困难去有创记录的这样一个交付的一个记录啊，我相信我们每个月都会打破记录啊，这是毫无疑问的啊。这个压力很大，但是我们还是有信心的。第一个问题啊，翻译一下。 Thanks for your question. Previously I've also mentioned that we will try our best to meet the delivery target for this year. Of course, this means that the Q4 is going to witness a lot of pressure and the challenges on our delivery and the supply. We have already started to make the preparations for the delivery, starting from the Q3. We believe starting from the Q4, we're going to have the two factories are running to make sure we can support the delivery demands. Actually, starting from the Q3, we have already kicked off the tooling and the preparations for the mass production of the ET5 at large scale in the factory two in the new park. At the beginning, we believe the production capacity of the factory two is relatively lower compared with the factory one, because the factory two will only need to manufacture one product. That is ET5. We believe in the Q4 we are going to break records every month, and we are confident to achieve the record-breaking target for the Q4. We have been making active preparations to meet this target as well. 第二个问题，当然大家也知道，我们很早就不去发布这个订单的数字，因为确实每家公司关于订单的定义都特别不一样。但我们能说的是，不管是ET7还是ES7，确实我们订单还是非常充足的，特别是ES7，最近的表现是超过我们自己的预期的。当然ET5毫无疑问要等比较长的时间。总体上来讲，我们近期的问题确实还主要是供应链端的一个产能的问题。我们现在总体的产能也不是问题了，主要还是供应链端一些产能的问题。总体上来讲的话，需求的话，我们现在还是非常有信心的。 Actually we haven't disclosed, yes, regarding the specific order information, we believe we haven't disclosed this information for a long time, because different companies have different definitions and understandings regarding the orders. But what I can say now is that we have a sufficient order backlog regarding the ES7 and the ET7. Actually, for the ES7, we believe the order performance is actually much better than our expectation. For the ET5, the waiting time is much longer. Recently, we believe that the bottleneck or the constraint is not about the demand, is mainly about the production capacity of the supply chain, of course of our own production capacity. We believe that we have already made sufficient preparations, but the main constraint will be in the supply chain. For the third question about the gross profit margin of Q3 and second half year. The company has taken multiple measures to improve our gross margin profits, and we raised the selling prices of certain vehicle models like ES8, ES6, EC6 and ET7. Most of the positive impacts will be reflected in Q3. Most of ES7 starting to be delivered in Q3, our first edition with higher price and margins. We expect a slight increase of vehicle margin in Q3. In short term, we are still facing great uncertainty and challenges regarding the battery cost, which will have the net negative impact to our gross margin. Thank you. Thank you. The next question comes from Jeff Chung from Citi. Please go ahead. 还是想问一下产能，简单来说，ET5今年十二月的单月产能，我们觉得可以到达什么水平？然后，除此之外，就是说十月、十一月、十二月，你觉得ET5是一个线性还是非线性的爬坡？首先就是关于ET5的这个小问题，然后第二就是说还是想具体问得细一点，关于这个产能的这个爬坡，因为我们给了这个三万多的三季度的指引，就是在最好的情况下意味着九月份的环比是15个点的环比，对吧？然后，那如果要达到全年十五万台的话，那就是说十月、十一月、十二月每个月都要30个点的环比。就我想问就是说，除了ET5之外，在我们这个综合的这个产能下，我们是应该这么拍吗？还是就是说，可能这个十月、十一月会要温柔一点，这个可能就在十来个点左右，那十二月就是比较是这个产能扩张的会很快。就是想问一下这个节奏，这是我第一个问题。 So, my first question is about the ET5 production capacity. How many ET5 we can produce in December? What is the pace of the ET5 ramp up from October to December? This is the first question. The second question is about the overall production ramp up from September to December. Our Q3 guidance implied the September runway should be accelerated by 15%, month-on-month. In order to meet our full year's target, the October to December month-on-month runway has to be at least a 30% month-on-month every month. Should we expect a straight line ramp up or an accelerating pace that December or November's portion could be more critical rather compared to October? Thank you. 谢谢 Jeff。这个当然大家都是专家了，这个产能的爬坡，它确实是有一个爬升的过程，特别是新产品的上市，那当然前面会少一些，然后逐步地会加速到一个稳定的水平。那我们当然这个从 ET5 来讲的话，我们认为十二月份单月交付过万，从我们来讲，我们各方面的准备工作都是非常充分的，那我们内部的目标肯定是比一万这个数字还要高的，单独到十二月份去看的话。那当然这个后边十月份、十一月份、十二月份的话，我们肯定还是会，前面我也讲了，每个月都会打破纪录，那也就意味着它还是一个逐月上涨的关系。这个十二月份当然毫无疑问是最高峰，但是我们十月份的话，那不管是我们 ET7 还是 ES7 的产能的情况，这个供应链产能的情况，我们认为也会达到缓解。那 ET5 的话呢，爬坡，这个开始爬坡，那所以后边三个月的话呢，肯定是一个月比一个月高的。就总体上来讲，我们当然很难去预测，因为大家也都非常清楚，现在这个整个的各方面的限制因素都非常的多，有很多不是我们公司能控制的事情。但我想强调的是，过去几年，我们确实整个都面临的是这么一个情况，我们也大概清楚在这样的情况下，我们怎么样去能够去有更多的产出。所以总体来讲，我们对于四季度的产能的情况 特别是供应链板块的情况，我们还是有一定的这个可见度的，所以信心还是有的。 好，叶，请。 Thank you, Jeff. Yes. Actually I think for the production capacity ramp up everyone understands this will need some time, and there is a process, especially when it comes to new product production ramp up. At the beginning it will start at a relatively low volume as then it can accelerate to a stable level. We have already made sufficient preparations for the mass production of the ET5, and we believe the ET5 will have the opportunity to surpass 10,000 units in one month. If we look at December, of course, our internal target for ET5 should be higher than this for the one in November and December, we believe we are going to break the delivery record month-over-month. Especially we are going to see the peak at December. Previously I have also mentioned in October the supply chain bottleneck will be resolved for the ES7 and ET7, and around that time we will also ramp up the production of the ET5. It means that we're going to see the delivery volume to gradually ramp up. At this moment, we cannot predict with certainty because there are many factors outside of our control. In the past few years, we have experienced many challenges and extreme situations. In the past, we have accumulated a lot of experience, so our team knows how to handle those challenges and ramp up over productions amid those challenges. We believe in the Q4, of course, we're going to experience many pressure in terms of the supply chain and production, but we are confident to make sure we can meet the target we set for ourselves. 对，谢谢，谢谢李总。我就问一个小问题，就是如果十二月是一万台的话，那因为两天之后就锁单了嘛，那可不就是说，我现在订车的话，我基本上明年六月份才能拿到车，这个你可以再评论一下吧。谢谢。So my question is if the production capacity can reach ten thousand units a month. OK，您说吧，李总。 那个，我们因为锁单，因为有订单的用户，他有各种各样的情况，他有一个锁单的节奏，所以锁单的话确实是决定这个最后到底什么时候交付。当然如果你想早提车的话，就早锁单，这肯定是有好处的啊。 Of course, for the reservation orders, there are some fluctuations and uncertainties, but for the production order confirmation, this is the starting point for us to make the arrangements of the actual production of ET5. If you would like to get your ET5 earlier, of course you should place your orders as soon as possible. 好，谢谢。我今天晚上下一个单，看看两天之后什么时候可以去取到车。好，谢谢李总。 好，谢谢，谢谢。 The next question comes from Edison Yu from Deutsche Bank. Please go ahead. Hey, thanks for taking the question. First one, we noticed that William visited the US last month, and we're wondering what kind of, you know, decisions or perhaps considerations were taken while he was there. Perhaps earlier entry into the US? The second question is, the original plan was to introduce a solid hybrid battery pack, I believe in the Q4. is there any updates to this? Is it still on track? 我很快翻译一下。第一个问题是我们看到William上个月出了美国，你们可以分享一下就是这个visit有什么新的消息吗？还有第二个问题是，本来未来想交付一个新的电池在第四季度，这有什么update？谢谢。 谢谢Edison。对，那我们当然大家也知道，NIO从一开始就是一个global startup，我们在2015年就设立了硅谷的研发中心，那我们因为疫情的原因，好几年没到美国的办公室了，我们这边还有几百名的同事，所以这个确实是，在这段时间在美国，然后去欧洲的话，我们要去见见我们的同事，了解一下我们同事的工作的情况。当然美国市场的准备，我们是很早就在思考这件事情，我们一直都在进行各方面的充分的论证，什么样的产品合适，什么样的用户体验是有竞争力的，应该是什么样的商业模式。那在过去的五年中，我们都一直在研究这件事情，从2017年开始，我们实际上在研究这件事情。我们应该说是，我们现在越来越清晰了，那我们会按照我们比较清晰的这样一个计划在进行各方面的准备。大家知道美国市场是一个竞争非常激烈的市场，那它的法规体系，它的这个和中国、欧洲也有比较大的区别。那我们当然要准备，所以我们在这件事情上，我们是长期的思考，周密的准备，保持耐心。但是毫无疑问，肯定是离这个越来越近了。当然具体的时间的话，我们今天还太早去说。但总体来说肯定是越来越近了。第一，我们进入美国市场。 NIO is a global setup from day one. Actually we set up the San Jose R&D center back in 2015. Because of the COVID-19 situation, I haven't been able to visit our colleagues in the U.S. for several years. We actually have hundreds of colleagues here based in the U.S., and we also have colleagues based in Europe. This time I would like to visit our colleagues here in the U.S. I will also go to Europe to visit our colleagues over there. For the U.S. market entry, we have been making preparations for a long time. We have been thinking about the U.S. market entry strategy back in 2017, and this has been in planning for almost 5 years already. We have been thinking about what kind of a product should be the best product for the U.S. market, what kind of user experience we should provide, and what should be the right business model for the U.S. market. We believe right now we have a much clearer plan regarding the U.S. market entry, and we have been making comprehensive preparations based on our plan and the strategy for the U.S. market. U.S. market is quite different from the China market and also the European market. The U.S. market is very competitive, and the regulatory environment is also quite different from China and Europe. We have been making long term thinking and preparations about the U.S. market entry, and we believe that the right strategy for us is to make comprehensive preparations and be patient. Of course, there isn't much details we can disclose at this moment, but we believe we have a clear strategy for the U.S. market entry and we just need to be patient for the execution. 第二个问题的话，一百五十度电池包，这个我们，因为这确实是一个全新的技术，从能量密度的角度来讲提升非常的多，我们的验证肯定是要非常充分的。那我们和我们的合作伙伴，还在进行各方面的准备工作、生产准备的工作。目前的话，计划的话，确实是有所delay，我们目前的话，从方向上来讲的话，往后要delay几个月的时间吧。确实，遗憾今年的四季度的话，我们应该是没法提供这个服务，主要我们在评估整个的这个项目的进展吧。但我们大概有几个月的delay的时间吧，目前来看的话。 For the 150 kWh semi-solid state battery pack. This battery pack offers a very high power density, and we are making comprehensive evaluations of this semi-solid battery pack. We are making preparations for the production of this battery pack together with our partners. According to our current evaluation, we believe, probably we are not going to provide this service to our users in the Q4. According to the current evaluation, this battery pack will be delayed for several months. Of course, we have been working with our partners to evaluate the progress, and this is the current situation, and we will try to work with our partners to improve the situation. 感谢。 The next question comes from Paul Gong from UBS. Please go ahead. 谢谢，谢谢给我问题的机会。就我第一个问题来说的话，就想问一下这个订单的这么一个情况，但我不是说问订单的一个数目，而是就是说我们留意到好像就有些人他下订单并不是他自己要买车，而是希望就说占一个位，排队，然后之后转让给别人，就这样有可能造成就是订单这边比真实的那个需求可能来得更强一些。不知道就说管理层有没有留意到这样的一个问题，是否会担心这样的订单的情况会给我们的一个生产造成一些误导，我们之后的排产造成一些误导。那然后第二个问题来说的话，可能还是想跟进一下，就是下一步的思考吧，因为第二品牌、第三品牌，不管是Alps还是这个Firefly，就感觉就是现在管理层对这个以后的品牌的一个矩阵好像有了更多的一些准备和思考，甚至都有一些供应链的下订单的锁定的那样情况呢，就又过去了大约两个季度了，就不知道管理层有没有更多的一些信息可以在这里分享一下。 So two questions for me. The first one is have you realized that there might be some orders that has been placed by certain people who is not really intending to get the vehicle, but just to jump the queue and try to sell the order to someone else for profit, which might inflate the order and give some misleading information for your production plan. How do you prepare for that? My second question is regarding your secondary and tertiary brands preparation, Alps and Firefly. We notice that there are some orders has been entered with some suppliers, especially from the batteries and other components. Are there more color management can share compared to let's say two quarters ago? 好，第一个问题，当这个确实如果这个需求满足得慢的话，会有你刚才说的这种情况，就是可能会有一些订单会被转让。但总体上来讲的话，我们对订单转让还是有我们自己的一个相对比较严格的一个规定的。那我不认为这是一个普遍的现象吧，那不排除少数的情况，很少数的情况，但总体占的比例应该是非常非常低的。那因为我们也跟我们这个跟进的方式也有关系。大家知道我们如果有预定的话，我们会有Fellow去进行跟进。那总体上来讲，我们认为这种去买来准备就下订准备转让的这种情况，在我们整个订单里应该就这个比例，这种需求的，这种比例应该是比较很低的，我不会认为是一个主要的一个情况。那这第一个问题，你分析。 Thanks for your question. Regarding the first question, of course, if we cannot meet the user demands in a timely manner, then probably some users may transfer their orders to others. We have a very strict policy regarding the order transfer, so we believe there will be very few cases for the order transfer, and the percentage of order transfer will be quite low. This is probably also because of our follow-up mechanism. If you place a reservation order for now, then our Fellow will follow up with you regarding the specific orders, and then this can be converted to the actual production orders. In our current order backlog, we believe that the percentage of users who are only placing the orders to make sure they can transfer the orders to others in the future to make a profit. This percentage should be quite low because of all those different mechanisms we have in place. 第二个问题，当我们的针对大众市场的品牌，这个我们以前也交流过了，信息交流得比较充分。那这个目前的话，整体的研发的进展都还是按照我们的时间表在进行。那当然在这个大众市场品牌方面的话呢，我们因为它会用到我们最新的这个NT3的这个整个的智能平台，所以它会根据我们跟着我们NT3的这个智能平台一起去推向市场。所以这个也是，这是我们的一个关于大众市场的这个品牌的一些新的这样的一些进展。当然大家有确实这个有一些媒体，包括可能供应链端，这个大概大家也在考虑，大家有一些信息吧，information说我们可能还有一个第三品牌，我们确实在过去的一两年时间里面，我们认识认知到两件事情，第一个的话呢，就是如果想实现这个加快像从这个油车向这个电车的这个转变的话，我们确实需要去有更多的产品去服务更多的这个更广泛的用户，这个更多价格区间的产品去服务更广泛的用户。那么这是我们认知到的一件事情。我们也看到了，其实在过去的一年里边，中国的这种包括这种入门级的，包括大众市场的这个需求增长得是非常非常的迅速的，这个中国的这个电动车的渗透率的增长，也是因为这样的一个trend。但另外一方面，我们也看到了一些非常有意思的一些包括商业模式和用户体验创新的一些机会。大家应该知道NIO比较擅长的是把用户的这个利益，用户的体验和这个技术的创新去进行这个结合。我们看到了这样的一个机会，我们进行了充分的验证以后，我们认为我们有机会用一些更创新的，像包括商业模式，包括技术方面的创新，去服务更广泛的用户。这是我们的一些现在可以交流的一些思考吧。当然这个更细节的信息，我们需要在合适的时候再去做，跟大家进行更充分的交流。好，谢谢。 For the mass market brand, previously we have already discussed about our plans for the mass market brand. Currently the R&D progress is on track. Our plan for the mass market, the product is to follow the schedule and the cadence of our latest technology platform. That is the new technology platform 3.0. We're going to launch the mass market product based on the new technology platform 3.0. Yes, probably from the media and the supply chain, there have been some discussions about the third brand of NIO. Actually, in the past, we have recognized that if we want to accelerate the conversion from the ICE to EV, we will need to provide more products to cater to different user in different segments. We believe in the past year, we have witnessed a tremendous growth in terms of the EV demand at the entry-level market segment, which has also been driving the EV penetration here in the China market. We have realized there's some interesting opportunities for the business model innovations, and I believe, NIO is very good at combining the innovative technologies with the user experience and provide very innovative experience to our users. We have identifying some opportunities for us to make innovative technologies and blend it together with our business models to provide services to the users and provide different kind of products to a wider range of user groups and the communities. At this moment, we cannot disclose much information about this. What I can say is we do believe that there are some opportunities for us to explore. Thank you so much. This concludes our question and answer session. I'll now hand the call back to Ms. Eve Tang for closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact NIO's investor relations team through the contact information provided on our website. This concludes the conference call. You may now disconnect your line. Thank you.