Hello ladies and gentlemen. Thank you for standing by for NIO Incorporated's fourth quarter and full year 2023 earnings conference call. At this time, all participants are in listen-only mode. 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. Please go ahead, Rui. Good morning and good evening, everyone. Welcome to NIO's fourth quarter and full year 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted 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; and Mr. Stanley Qu, Senior VP of Finance. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the view expressed today. 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 include discussion of the 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 2023 Q4 and full year earnings call. In Q4 of 2023, NIO delivered a total of 50,045 premium smart EVs, up 25% year-over-year. In 2023, NIO's cumulative delivery reached 160,038 units, representing a growth of 30.7% from 2022. In January and February of 2024, due to the seasonality of industry and the Chinese New Year, NIO delivered 18,187 vehicles. On March 7th, NIO will start to deliver the 2024 models featuring enhanced performance and experience. With that, NIO sales will gradually bounce back, and the total delivery in Q1 is expected to be between 31,000-33,000 units. In terms of NIO's financial performance, with continuous improvements on the BOM cost, the vehicle gross margin increased to 11.9% in Q4. Now, I would like to share with you the recent highlights of our products, R&D, and operations. On December 23rd, NIO Day 2023 was held in Xi'an, Shaanxi Province, where the smart electric executive flagship NIO ET9 was unveiled. ET9 embodies NIO's full-stack capabilities and global leading technologies featuring core technologies such as in-house developed AD chip NX9031, all-domain 900-volt architecture, SkyRide chassis system, and flagship safety and security. ET9 defines the technology standard for the next-generation premium smart EV. The delivery will start in Q1 2025. In the meantime, NIO will soon start to deliver its 2024 models with configuration and performance upgrades, including the brand-new center computing cluster ADAM, which brings the computing power to a new level. Enabled by the industry's highest computing power, NIO's software release has become faster, making our products more competitive. With respect to NIO-assisted and intelligent driving or NAD, NIO's collective intelligence capability has seen rapid growth, with the total validated urban mileage increasing 100-fold in five months. As of the end of January, Navigate on Pilot Plus was validated and made available more than 1 million kilometers of roads in China, including 650,000 kilometers of complicated urban driving scenarios in 606 cities. In Q2, the NOP Plus for urban roads is expected to be released to all NT2 users, which will make this OTA update the largest public release of its kind in China. Through computing sharing across different domains on the center computing cluster, NomiGPT, or multimodal large vision model will be released soon, making the cockpit smarter and more secure. In addition, NIO's mass market brand will make its debut in Q2. The first product will be launched in Q3, with mass delivery to start in Q4. As for the BaaS and the service network, so far, NIO has 148 NIO Houses and 352 NIO Spaces, as well as 314 service centers and 62 delivery centers. About the charging and swapping network, to date, NIO has 2,419 Power S wap Stations worldwide, providing over 39.5 million swaps cumulatively. It also has installed over 10,000 Power Chargers and 11,600 Destination Chargers. During the Chinese New Year, on the busiest day, NIO completed 19,199 swaps. One of the stations on the highway provided 195 swaps. Battery swap has become the most reliable solution for NIO users. Following the battery swap cooperation with Changan and Geely, another two strategic cooperation agreements were signed with JAC and Chery in January. NIO will roll out comprehensive and in-depth cooperation on battery swap with these partners. Moreover, NIO has partnered with multiple energy companies such as Anhui Energy Group and China Southern Power Grid to jointly build swap stations. The value of battery swap has been appreciated by more people, making a holistic chargeable, swappable, and upgradable solution a well-recognized core advantage of NIO. In 2024, NIO plans to build 1,000 new battery swap stations and 20,000 chargers, bringing the total to over 3,310 swap stations and 41,000 chargers by the end of 2024. Regarding the capital market, in December, NIO received $2.2 billion strategic investment from Abu Dhabi investor CYVN Holdings. The investment has further strengthened NIO's balance sheet, laying a solid foundation for NIO's investment into the next-generation core technologies and products. Shouldering the corporate social responsibility and supporting global sustainable development, NIO always stayed true to its foundation vision of Blue Sky Coming. In general, NIO was selected by Corporate Knights into the 2024 Global 100 Most Sustainable Companies, making it to the list for the second time in a row. NIO was placed 15th among more than 6,000 companies worldwide, up 29 spots from last year. As competition intensified in 2024, we see both challenges and opportunities. With faster deployment of charging and swapping facilities and a change in consumer behavior, the premium BEV segment to which NIO brands belong will soon arrive at an inflection point of growth. In the second half, a new brand for the mass market will also become our growth level. In 2024, we will continue to focus on the corporate top priorities, level up system capabilities, strengthen cost mindset and cost management so as to bring our A-game to the next phase of competition. As always, thank you for support. With that, I will now turn the call over to Steven Feng for financial details. Over to you, Steven. Thank you, William. I will now go over our key financial results for the fourth quarter of 2023. To be mindful of the length of this call, I will refer to RMB only in my discussion today. I encourage listeners to refer to our earnings press release, which is posted online for additional details. Let me start with revenue. For the fourth quarter of 2023, total revenues reached RMB 17.1 billion, up 6.5% year-over-year and down 10.3% quarter-to-quarter. 90% of revenue comes from vehicle sales in Q4, which was RMB 15.4 billion, representing an increase of 4.6% year-over-year and a decrease of 11.3% quarter-to-quarter. The improvement year-over-year was driven by growing delivery volume despite the impact of lower average selling price resulting from product mix changes. The decrease quarter-over-quarter was mainly attributed to a decrease of 9.3% in delivery volume. Moving to other sales, other sales reached RMB 1.7 billion, growing 27.6% year-over-year and 0.4% quarter-over-quarter. The year-over-year increase was mainly due to increased sales in accessories and the provision of power solutions, which both grew with our user base. Let's have a look at the gross margin. Overall gross margin was 7.5% compared with 3.9% in the same period of last year and 8.0% in the last quarter. The increase year-over-year was mainly attributed to the increased vehicle margin. The slight decrease quarter-over-quarter was due to the decrease in margin from provision of power solutions as a result of expanding power network, even though vehicle margin was growing. A closer look at vehicle margin, which was up to 11.9% in this quarter compared with 6.8% in Q4 2022 and 11.0% in Q3 2023. The year-over-year increase was mainly due to the decreased material cost per unit in Q4 2023 and lower base in Q4 2022, which resulted from the inventory provisions, accelerated depreciation on production facilities, and the losses on purchase commitments for the previous generation of ES8, ES6, and EC6 recorded. Let me move on to the operating expenses. Our R&D expenses were RMB 4.0 billion, remained stable year-over-year, and increased 30.7% quarter-over-quarter. The increase was mainly driven by incremental design and development costs for new products and technologies and higher personnel costs in R&D functions. SG&A expenses were RMB 4.0 billion, increased 12.6% year-over-year and 10.1% quarter-over-quarter, which was mainly related to higher personnel costs in sales functions and increased sales and marketing activities. Let's move further to the bottom line, l oss from operations was RMB 6.6 billion, representing a decrease of 1.6% year-over-year and an increase of 36.8% quarter-over-quarter. Interest and investment income was RMB 1.4 billion, increased 288.7% year-over-year and 375% quarter-over-quarter. The increase was primarily attributed to the recycling of unrealized gain from other comprehensive income to investment income of RMB 977.3 million for the available-for-sale debt related to an upstream industry investment. Loss was RMB 5.4 billion, representing a decrease of 7.2% year-over-year and an increase of 17.8% quarter-over-quarter. Last but not least, our balance sheet is strengthened with RMB 57.3 billion in cash and cash equivalents, restricted cash, short-term investment, and long-term time deposits as of December 31st, 2023. For more information and details of our unaudited 2023 full-year financial results, please refer to our earnings press release. Now, this concludes our prepared remarks. I will now turn the call over to the operator to facilitate our Q&A session. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, please limit yourself to two questions. And if you have additional questions, you can re-enter the queue. Your first question comes from Tim Hsiao from Morgan Stanley. Please go ahead. Hi William and team, thank you for taking my questions. Thanks for taking my questions. I have two questions. The first one is about our upcoming mass market brand Alps. So is NIO still targeting to launch and deliver the first model under Alps in late Q3? And separately, as it's just less than two quarters away, could you share more information about the channel strategy, target numbers of stores, store types, and the scale of a charging network, etc.? So any additional color about Alps would be highly appreciated. So that's my first question. Thank you, Tim. [Foreign language] 我们目前的计划就是讲到了我们在Q2会发布这个Alps，就是我们的mass market这个brand的这个brand。然后在三季度的话呢，我们会这个开始发布第一款产品，然后四季度开始大批量交付。事实上，我们的这个第一款车在去年的Q4就已经这个VB车，就是四支车就已经下线了。那我们对这款产品是非常满意的。那么从这个开店的角度来讲的话呢，它肯定是一个单独的这个销售网络，但在售后方面的话呢，会用到一部分的NIO现有的这个售后的体系。那么在换电网络方面的话呢，我们的共享换电网络，就是大家也看到了我们和几家汽车集团，下一步还有更多的汽车公司来跟我们来共享这个换电网络。那么Alps会用到这个共享的换电网络，但这个共享的换电网络这个NIO的车也是能用的。那有一部分的换电站的话呢，是NIO是exclusive的，是独有的。所以长期来说的话呢，你可以理解这个跟那个cloud很像，有一部分的是私有云，但是大部分的话呢，是公有云，就是是共享的。 Thank you for the question. As I've mentioned in the prepared remark, in the second quarter of this year, we are going to unveil our second brand, the brand for the mass market. In the third quarter, we will launch the very first product of this new brand. The mass release and delivery will be starting from the fourth quarter of this year. Actually, the verification build, the VB build of this car already rolled off the line in Q4 last year, and we were pretty satisfied with the conditions of that build. In terms of the sales and the service network of this new brand, for the point of sales, it will have its separate and independent sales network. But in terms of the after-sales services and touchpoints, we can leverage the existing service resources of the new brand. In terms of the Power Swap network, we've previously mentioned that for the Power Swap network, we have a private network and a public network, similar to the cloud infrastructure and cloud service. For the private network, basically, it's the Power Swap stations and the facilities that are designated and exclusive to the new brand. But in addition to that, we have a public network where we will share the Power Swap ping resources with not only Alps, our second brand, as well as other car companies. As you also know that we've already signed the agreements with several car companies, and the more we'll join the public service facility as well. [Foreign language] 对，四代站。我们的第四代换电站就是可以这个兼容这些不同的品牌。那么兼容NIO和这个Alps都会兼容。那么我们在今年的4月份就开始布局。我们今年的1,000座站大部分都会是共享，都会是共享网络的。 Our fourth-generation Power Swap Station will have the compatibility for both new products as well as Alps products. We will start to build the fourth-generation swap stations from April this year. Previously, we've mentioned that in 2024, we are going to install another 1,000 swap stations. Most of these stations will be fourth-generation stations for the public network. Thank you, Tim. Thank you. Thank you really for sharing all the details. So my second question is now on the margin target. Because I recall that back to the quarter results, I think the management team mentioned that the vehicle gross profit margin for 2024, i.e., this year, would be around 15%-18%. And there could be additional like 0.5% margin uptake contributed by in-house production. So based on current market environment and competitive landscape, do you still maintain the same target this year, or look for any potential changes to the margin target? That's my second question. Thank you. Hi, Tim. About the margin, yes, for the whole year, I think we keep this 15%-18% target. But quarter by quarter, I think there will be some change. As you may know, we will upgrade all our NT2 product to 2024 version in March. And during the transition of old and new products, more promotions are offered for the old models, leading to the decrease of gross profit margin in Q1. But starting from Q2, along with the volume ramp-up of our 2024 version and also the further cost optimization activities, as you mentioned, we believe our vehicle margin can come back to an upward trend. And so starting from Q2, we are confident that 15%-18% vehicle margin can be achieved for new brands. From a long run, our target, our margin target for new brand will also be over 20%. Thank you, Tim. Great. Thank you very much. Thank you. Your next question comes from Bin Wang from Deutsche Bank. Please go ahead. Thank you. My first question is about the 2024 volume target. Some media report you target 200,000 units for the full year 2024, which means 25% growth. Can you confirm whether this is your target? That's number one question. Number two is about the second product from the new brand, mass market brand. In a recent interview, William actually mentioned they made a full-size SUV, Highlander. The The first one will be the second product, followed by MPV. Can I confirm this is your plan for the new brand in the next second and third products? Thank you. [Foreign language] 谢谢王斌。今年当然，这个确实市场竞争会比较激烈。我们产品的话呢，从产品的角度来讲，我们的这个2024款这个升级以后，我们的从性能的角度来讲，特别是智能化的算力，我们相信一定还是全球的领先的。那么今年的话呢，我们会着重在软件方面去交付这些功能，就是把硬件的这个能力能够充分发挥出来。就像我前面讲到的这个我们的领航辅助的功能，我们在二季度就会全面向用户推送，向我们的第二代车的用户推送。那么我们后续的还有依托于我们车上的这些算力，还有包括多模交互的这些大模型，NomiGPT，我相信会极大地增加我们现在产品的一些竞争力。那么从这个渠道的角度来讲呢，我们现有的这个接近500，就正好NIO Houses加NIO Spaces是500家，我们今年还会进一步地去做一些渠道的下沉。那么我们的团队在去年下半年增加以后呢，我们事实上也看到了这个他们的作用，因为他们很多开始成熟起来了，更加他们的销售的这个技巧对产品的了解也更加好了。所以如果我们去看今年的Q2，今年的2月份，我们事实上来讲，我们的表现应该是在这个纯电或者在新能源的车里面，我们总的来说横向去看的话，我们其实这个和Q1和1月份比的话呢，我们其实这个相对来说还是表现不错的。这个也证明了我们现在这样的一个销售能力的一个价值。结合这些吧，还有包括我们的换电站，我们今年的换电站的部署，这个除了是可以做共享，阿尔卑斯和NIO都能用以外，我们今年换电站的部署能够会更加地去从销售的角度出发，这个从提高销量的角度出发。因为我们已经有2,000多座站，我们的这个网络布局基本上已经形成了。所以结合这几点吧，我们对今年的销量这个还是非常有信心的。那我们当然Q1的销量我们给了这个指引31,000-33,000。那我们相信3月份以后这个随着天气变暖，这个市场的情况，我们相信还是会越来越好。那么今年我们还是有信心单月能回到20,000台的这样的一个水平，但我们希望能够尽快地到达这个水平。至于这个我们的第二品牌，先翻译一下。 Thank you for the question. Definitely, for this year, the competition is going to continue to be intense. But as we've also mentioned that we will be having our product for the 2024 model with enhanced performance, especially much better computing power. The computing power will continue to beat the global market. So this will help us to improve the overall competitiveness of our existing products. This year, we will focus on accelerating the software release so that we can release more new on the chip and computing power. And also, in the second quarter, we are going to release our NOP+ for urban roads to all the NT2 users. By doing this public release, we can also enhance the competitiveness of the product. Plus, we also have other new features like large language models, large vision models, and the NomiGPT, etc. In terms of our sales channels and the network, so far, we have around 500 NIO Houses and NIO Spaces. We will continue to enlarge the reach of our sales and service network to the lower-tier cities. In the meantime, from last year, we have enlarged our sales force. As the team is getting more matured and skillful with the sales and getting better understanding of our products, we also see this sales force start to kick in, especially in our delivery results for February. Inside of the BEV segment or the new energy vehicle market, our delivery results in February were actually pretty good, especially in comparison to our results in January. This has also reflected the effectiveness and the efficiency of our sales force and also sales channel enlargement. Thirdly, we will also continue to deploy our Power Swap network. As I've mentioned, we will deploy both public network and private networks for NIO and for Alps. And for our Power Swap network this year, we will mainly serve the purpose of boosting sales volume because we already have more than 2,000 swap stations. So we basically have established the initial network for the Power Swap services. And now we will focus more on boosting sales via installing these stations. So overall speaking, we are confident with our sales and the delivery results this year. As in our guidance, in the first quarter of this year, we are going to deliver around 31,000-33,000 units. In March, as weather gets better and the market gets more dynamic and vibrant, we are also confident that our sales volume will increase. For the midterm, we hope that our sales volume can still be back to around 20,000 units per month. We hope that this can happen sooner. [Foreign language] 关于我们的这个mass market的这个brand，这个其实我看也有一些媒体在进行了一些报道。我在这个跟媒体交流时也做了一些简单的交流。那我们第一款车，因为已经在做各种各样的测试嘛，确实也有一些这个谍照会被拍到，有一些测试的照片。那我们第一款车的话呢，是首先我们讲一下这个我们的第二品牌mass market的品牌，它肯定是专注家庭市场的。就我们会针对不同的size的家庭推出非常有竞争力的车型。那我们相信这个，因为我们比别的做家庭用车的做得要晚一些嘛，我们相信对用户的这个需求各方面的东西的研究肯定会是更加的深入一些。我们相信我们的产品是非常有竞争力的。然后当我们第一款车的话呢，这个是和现在在纯电方面这个目前销量最大的车型Model Y确实是直接竞争的这个产品，但它是能换电的。从目前来看的话，我们的成本和性能都非常有竞争力。那我们相信我们的成本能够比Tesla便宜大概10% 左右，也给我们的定价能够给到一个很好的一个空间。我们第二款车是针对大家庭的一款这个SUV。这款车其实研发进展也非常的顺利，我们已经进入到了开模的这个阶段，这个也是比较顺利的。我们明年就会能够推向市场。但第三款车我们肯定已经在开发的过程中了，今天还太早去说这个，这个还太早去说。那我们合适的时候跟大家交流。 For your second question about our mass market brand, some media has already captured some of our publicly tested vehicles on the roads and also reported some sneak peeks of our very first product. For our second brand, as we've previously introduced, its overall positioning is to target at the family-oriented users, basically families of different sizes. Or for family of different sizes, we are going to launch different sizes of vehicles, but all with strong product competitiveness. As we started relatively late in the family-oriented segment, we do can leverage such opportunities to better look into the real demands of the target users and launch competitive products accordingly. The first product of our mass market brand will have head-on competition with the most popular model of Tesla, that is Model Y, but our car will support battery swap. In terms of the cost and performance, we believe that this model will be highly competitive. In terms of the BOM cost, it will be roughly 10% lower than that of Model Y, which also gives us better flexibility for the product pricing. The second model of our mass market brand will be a SUV model for the large family. The R&D is in good progress. We have already kicked off the tooling for the second model, and this car will be launched in 2025. The third model is also on the way. We have already started product definition and R&D, but it's too early to share the information, and we will disclose more information when it's appropriate. Thank you, Bin Wang. Thank you very much. Thank you. Your next question comes from Yuq ian Ding from HSBC. Please go ahead. Thanks team. Yuq ian here. I got two questions. The first is we want to understand what's management priority or strategy between pricing and volume. We noticed that the company acted quite restrained in pricing amid universal price action from peers. Has that been what we have been seeing, the sticker price rather stable? So does that read as more profitability as a priority over volume for this year, or it's a rope-a-dope tactic before our new mass market brand coming into the market? That's the first one. Yeah. [Foreign language] 谢谢你，Tim。对，这个因为NIO从今年下半年开始我们就要同时销售两个品牌。当然从战略的角度来讲，NIO的brand的话，我们不会去出比ET5更便宜的车。那我们包括正在规划中的车型，我们肯定都还是focus在premium的brand。那它是以毛利这个为取向的，所以我们肯定是要追求毛利总额的。那所以我们在价格和量方面的话，我们会更加去keep这个毛利，所以我们不会用价格战的方式去这个去换量。这个我们这不是我们的重点。当然从这个第二品牌的角度来讲呢，它确实是针对家庭市场。那么这个市场竞争也肯定会更激烈。那我们的第二品牌能够leverage我们在smart和这个electric方面的这种的研发和一些基础设施的投资。那么当然它肯定是比从零开始做肯定要有更大的优势。那么我们的第二品牌会量的这种追求会这个会为优先。它肯定是在一开始我们肯定不是以毛利率为这个追求的，我们肯定是以量去追求的。那么肯定是量要量的优先级要更高一些。那么所以从总的来说的话呢，这两个brand会有不同的一个策略。我们相信这样一个组合对于整个公司的长期的经营来讲也是一个更好的一个策略。 Thank you for the question. Starting the second half of this year, NIO Group will sell two brands simultaneously. Strategy-wise, we have also differentiated for these two brands. For the new brand, for now, we will not sell any products that will be cheaper than the existing ET5. Even for the products in our pipeline, they will be targeting at the premium segment, which means that our products for the new brand will be more gross margin-oriented. We will be carrying more on the gross profit of our product than the volume. We will not cut the prices or enter the price war. We will not realize higher volume at the cost of our compromised margin or gross profit. For the second brand, the brand for the mass market, it is targeted at the mass market and also for the family-oriented users where the competition is also more intense. But luckily, it can leverage the existing electrification and smart technologies and infrastructures already developed by NIO. So it has certain advantages than starting a completely new brand from the ground up. For this second brand, we will be focusing more on the volume. So the volume is prioritized over the gross margin of the products. That's the overall strategy for these two brands. We believe that with this combined brand portfolio, it will also help us to realize a healthier long-term sustainable development and operations. Thank you. Got it. My second question is the recent two sessions could talk about supporting SOEs to move more aggressively on the EV without constraining on the profitability. So it looks like another pressure and making the industry harder and harder to consolidate. So thanks for the strong color on the new mass market brand and value proposition. I guess this is us changing the way of asking. Other than the strong product, are we aggressive enough on the pricing? You talked about the volume priority. But if the pressure is going to be overhang for longer, are we ready for being aggressive on the pricing for longer? [Foreign language] 当然我们在中国的话，我们当然会面临各种企业的竞争。我们会面临像Tesla的竞争，我们会面临这个像这个新创公司的竞争，也会面临一些民营企业的竞争，合资企业的竞争。当然也会有一些国有企业的竞争。中国是一个非常开放的汽车市场，这个竞争肯定对用户是有好处的。对于企业来讲，当然会艰难一点，但最终我相信这个当然最后赢的肯定都是综合能力更全的、更从用户的体验出发的这样的一些企业。我们对我们赢的这个长期的竞争肯定是有信心的。当然除了竞争以外，我们认为合作也很重要。就像我们跟长安有这个我们第一个这个换电的合作的这个伙伴就是长安，对吧？就是说我们和吉利，还有和奇瑞，这个和这个江淮都有合作。我们和中国石化在换电站方面我们也有合作。我们跟中国石油，我们跟这个南网这个在这个换电站和储能方面都有合作。所以其实从NIO来讲的话呢，我们也是非常善于合作的公司。所以overall来讲的话，我想竞争肯定是永远会存在。但另外一方面的话，我们也会就我们的这个行业的一个合理性的角度来讲，在从一个商业合理性的角度来讲去开展对外的合作。 It's true that doing business in China, it's inevitable that we will face competitions coming from all types of car companies, including companies like Tesla, many startups from China, private companies, well-established ones in China, and also joint ventures and state-owned enterprises. Overall speaking, China's automotive market is a highly open market, and such competition can actually benefit or bring benefits to the end users. However, it can be more difficult and challenging for car companies. But we believe that by the end of the day, those companies with good overall capabilities and competence, as well as those companies who care about the experience of the end users, will survive from the fierce competition. And we are confident that we will withstand such competition from all the competitors. But in the meantime, we also see cooperations out of the competition. For example, we have announced Power Swap cooperation with many car companies. Changan Automobile is the first car company to partner with NIO in Power Swap. Later, we also collaborated with Geely Holding, JAC Group, and Chery on the battery swap. We also have partnerships with energy companies like Sinopec and PetroChina for the construction of Power Swap Stations, as well as with China Southern Power Grid on the energy storage, as well as Power Swap Stations. So in general, NIO is pretty good at partnering up with the peers in the industry. Since the competition is inevitable, we would like to look at how we can navigate through the intense competition from the reasonableness of the business perspective. Got it. Thank you. Thank you. Thank you. Your next question comes from Ming Hsun Lee from Bank of America. Please go ahead. Hi. Thank you, William and the IR team. So I also have two questions. So first question is regarding the overseas market. Do you expect NIO to enter the new countries this year? Will you cooperate with more local distributors in other overseas markets, or you will maintain the direct sales business model? Also, do you have any overseas sales target for this year? Thank you. That's my first question. [Foreign language] 谢谢明。从这个全球市场来讲，我们当然首先肯定是要专注中国市场，这个因为这个是最大的市场，也是竞争最激烈的。那么但是我们当然不会停止对这个国际市场的这个探索。那我们在欧洲五个国家，那么这个我们会把这五个国家的这个市场把它经营好，进一步做经济化的经营。那么我们今年还会进入一些这个新的国家，比如说这个UAE。那么因为阿布扎比的这个投资机构也投资我们了，我们在这边呢，我们会有一些市场的销售方面的一些市场的这样的一些进入的计划。那么其他的国家我们会会会从今天来讲，我们会去看。那么从接下来来讲的话呢，对于我们来说，战略上确实也会有一些会更加灵活一些，有两个方面的这个变化。一个的话呢，是因为我们会有面向大众市场的新的品牌、新的产品。我们明年还会有更便宜的这个十几万人民币的这样的一个新的brand。那也就是说，我们的这个产品这个它整个的市场的覆盖会更多，会更大一些。 有了，其实其他的市场上会比较小一些。那从我们的第二品牌和第三品牌来讲的话呢，这肯定会这个更有机会一些，面向的市场肯定会更大一些。这是第一个变化。我们会基于这个去去去制定我们一个全球的市场的计划。那么第二个来讲的话呢，我们当然在中国，包括我们已经进入了欧洲的几个国家，目前我们都是直销的方式。那么在中国毫无疑问，我们都会用直销直营的方式。但在全球市场的话呢，海外市场的话呢，我们肯定会要尊重这个各个地方的这样的一些经营的这样本地的这样的一些特这个特殊的这样的一些情况。我们是会用更灵活和更加这个投资回报的角度来讲，会更快的这样的一些方式去这个去更开放的一个方式，我们去跟本地的一些公司去进行合作。那么所以我们不排除各种各样的合作的这样的这个可能性，所以会更加灵活和更加开放一些。 Thank you for the question. Regarding the global market or international markets, at the moment, we will still primarily focus on the Chinese market as it is the largest and also the most competitive market for the automotive industry. But in the meantime, we will not stop our exploration into the international markets. So far, we have already entered five European countries, and we will keep refining our operations and management in these five European countries. And this year, we are also planning to enter into several new countries. For example, UAE, as we are invested by the Abu Dhabi's strategic investors. So we are also preparing for the market entry and the sales and the service in that market. For the other countries, we are more waiting to see the development of the conditions. And strategic-wise, we will also become more flexible because there are two major changes. The first change is that as we will soon have our mass market brand, and the next year, we are going to announce our third brand, the price will be below RMB 200,000, which means that with all three brands combined, we will be able to cover larger markets with more segments. Because NIO, as a brand, primarily focused on the premium segments, basically China, U.S., and Europe, these three continents contribute 90% of the sales of the premium segment. But for our second and third brands, as they are more affordable, they will be standing a bigger chance of tapping into a more diversified markets and in more regions. So our global market entry will also take these three brands into consideration. And the second change is regarding our strategy entering into each market. At the moment, in China and in 5 European countries, we adopt the direct selling model. In China, we will continue to have the direct sales with direct touchpoints with users. For the other markets outside of China, we need to respect the local conditions and also the special characteristics of each market. In that case, we will keep our strategy very flexible and very open. We will look at which way will bring us quicker return on investment. We don't exclude any possibilities of cooperating with local partners for the market entry. In general, we will have a very flexible and a very open strategy towards markets outside of China. Thank you, William. My second question is regarding the battery technology. Recently, some auto brands started to launch 5C 800-volt charging battery and the system. When do you expect that the NIO brand and also probably your second brand will start to provide this spec? And if after you have a fast charging battery, will you switch to expand more charging stations instead of battery swap stations in 2025? Thank you, William. [Foreign language] 对，就是从电池的技术的角度来讲呢，我们当然这个从超充、提高充电的速度，还有快换，对吧？这一直是我们的一个这个这个一直的一个战略。所以我们在充电桩方面，我们其实也是在中国部署充电桩最积极的这个汽车品牌。我们80%的这个这个电量都是服务别的品牌的。其实我们我们的充电业务基本上是break even的。所以总的来说的话呢，我们还会持续的去做这个布局。那我们640千瓦的这个超快充桩最近也会在开始安装。所以在这方面的话，毫无疑问，我们当然会跟进这个这个行业的这个技术趋势。当然你不管怎么快，肯定都不如换电。这个换电，我看有的媒体说这个相当于20C，所以这个我我我当然这个是一个比喻了。那这个肯定从一个体验的角度来讲，换电肯定是最好的体验。所以我们一直叫可充可换可升级。那我们也会强调可升级，这个其实对用户利益是更好的。但从一个方向的角度来讲呢，我们不光是关注这个电池的能量密度，就像我们这个近期要交付了150度电。那我们关注这个快充，对吧？就是这个5C，我们其实我们的这个ET9就会搭载这个5C这个超充的这个电池。更重要的是，我们会关注更加关注电池的寿命。我们认为这其实是真正对用户来说是重要的。那如果我们去看行业现在的现状的话呢，是提供的这个质量保证的话，都是8年十几万公里，然后这个70%的这样一个质量标准，SOH剩70%。如果我们稍微往长一点看的话，因为这个车是一个15年的产品，那这肯定是不足够的。因为现在大部分的车是没到这个年龄，还没到8年。其实如果我们再稍稍往远一点的看的话，那这其实马上就是一个问题。所以我们认为长寿命这件事情，特别是日历寿命，那是电池最重要最重要的一件事。我们在过去几年解决了电池的安全性问题，解决了电池的这个充电的效率的问题，我们充换电网络解决了电池家电的便利性问题。那我们接下来主要要解决的就是电池寿命的问题。我们在这方面其实在过去几年做了非常多的研究，最近我们跟市场也会做一些交流。所以真正重要的事情现在其实已经越来越明确了，就是电池的寿命，特别是日历寿命，是整个智能电动汽车行业、电动汽车行业，包括增程，也包括插混这样的一些行业要面对的一个问题。你怎么能让用户在8年后要花这个，如果想获得一块健康的电池，要花十几万人民币，一块40度的这个电池包，还要花八九万人民币。我觉得这个这个稍微，因为汽车行业汽车产品是15年的一个产品，你是必须对这样的事情是有解决方案的，而且是一个ultimate的一个方案。所以这也是为什么未来从一开始是有换电，有整个的这样的一个思路。所以最近我们会跟市场会跟有有这方面的一些交流。 Thank you for the question. In terms of the battery technologies, actually NIO has been having this longstanding strategy of studying the ultra-fast charging as well as ultra-quick battery swapping. In terms of charging, actually NIO is the most active brand in terms of deploying public chargers for the users in China. And as of now, 80% of our electricities were charged for the non-NIO users than for the NIO users. For the NIO Powers charging business by itself, it is already breaking even. And we will continue to deploy the chargers for the users. Very soon, we are going to install and launch our 640 kW Power Chargers. So definitely, we will follow the latest technologies in the charging industry. In the meantime, we also need to emphasize on how fast the Power Swap can be, because no matter how quick you are on the charging rate, it can never outrun the Power Swap. Some media has used the analogy where Power Swap is as fast as 20C, as fast as charging at 20C in comparison to 5C on a common charger. Not to mention that battery swap also has the best experience for the users. In NIO's holistic solution, in addition to chargeable and swappable, we also have upgradable, which is also very important, especially to serve the interests of our users. Very soon, we are going to have our 150 kWh battery. We also have a 5C charging rate that will become available on our first model from the third generation products, ET9. But in addition to looking at the battery capacity and the charging rate, what really matters is the lifetime of the battery. For that, we think that it's very important, because at the moment, the industry average warranty duration is around eight years or 100,000 kilometers something, or when the battery hits 70% state of health. But if you look at the vehicle, it has a lifecycle of around 15 years. For most of the electric vehicles running on the street, they haven't really hit the end of life of their batteries yet. But as car companies, we really need to consider about the 15-year lifecycle of your products, including cars, including batteries. That's why the calendar lifetime of the batteries becomes more important for the car companies. Over the past several years, we have tackled the difficulties on the battery safety, efficiency of charging, and also the accessibilities of the charging and swapping facilities. From this year, we will focus on the long-life batteries. We have already done some research and studies on the technologies, and recently, we are going to share more information with the industry. What we believe is that with a longer battery life, especially longer calendar life, it will help not only the battery electric vehicles, but also PHEVs and the EREVs, or the new energy vehicles in general. Because after eight years, when the battery hits its end of warranty life, you cannot ask the user to pay another RMB 100,000 to upgrade the battery or to buy a new battery. Even for a smaller battery pack of only 40 kWh capacity, you cannot ask them to pay RMB 80,000 or RMB 90,000 for a brand new battery. So as a car company, we need to look after both battery and cars across or throughout its lifecycle. In that case, we need to provide the ultimate battery solution to the industry. Thank you, William. Thank you. Your next question comes from Paul Gong from UBS. Please go ahead. Hi. Thanks for taking my question. My first question is regarding your R&D budget for 2024. How much do you plan to spend into R&D for this year? And if you can, would you please give a rough breakdown of how much of this would go to the new models and how much go to the Alps, and how much go to the third brand, and how much go to the autonomous driving software and some key components, etc.? Yeah. So regarding the R&D spending plan for 2024. Hi, Paul. This is Stanley. Regarding your question about the R&D expenses expectation for 2024, generally, the scale of R&D expenses will be consistent with 2023. On average, the quarterly spending for R&D will also be around RMB 3 billion. Yeah, that's a general guidance for R&D. [Foreign language] 对。在划分方面的话，我们当然主要的还是我们一些基础的这样的一些研发或共用的吧，就是smart electric，这个其实是可以共用的。Vehicle的话呢，其实NIO、ONVO、这个Firefly也有很多地方是能共用的，但它们的差异化肯定会大一些。那么我们去年在9月21号我们的NIO IN上，我们沟通了我们的12个全栈。那我们当然还是按照这12个领域去进行投入。总的来说，大体上有一个概念，就是我们70%的这样的一些人员都是跟这个smart technology相关的。这个一个大概的一个比例可以跟大家说一下。 In terms of how to allocate the R&D expenses this year, we will mostly allocate our resources on the fundamental technologies as well as the technologies that can be shared across all three brands. We have mainly focused on the smart and electric technologies, which can already be shared across NIO, Alps, and also Firefly, which is our third brand. Last year, in September, we have announced our 12 full-stack technologies at the NIO IN Tech Day. Basically, our R&D investments will be dedicated into these 12 main areas. In terms of the personnel structure, around 70% of our R&D people are focusing on the smart technologies where relevant areas. Yeah, sure. My second question is regarding the cost of Alps. Just now, I think you mentioned that the cost is going to be about 10% lower than Tesla. Can we give a little bit more color, given this is actually a pretty impressive number when you consider Tesla is building almost 1 million cars in China a year, of which like 700,000 is already like Model Y? On what volume scale are you based on to assume the Alps costs? And what are the key advantages you have adopted for this cost advantage compared to Tesla? [Foreign language] 当然这个因为Tesla的毛利率也是公开的信息嘛，我们当然容易去做这样的一些比较啊。那所以我再强调，这Tesla的这个Tesla的这个毛利率也是一个公开的信息嘛，当然我们也容易去做这样的一些对比。那当然中国的这个从供应链的角度来讲的话，大家都知道中国是全球最大的这个这个这个汽车市场，也是最大的这个智能电动汽车的市场。我们当然利用中国的这个供应链的优势，结合我们自己在研发方面的过去这么多年的投入，因为研发我们在研发方面当然很重要的一个领域，就是如何通过研发去降低我们的这个这个BOM或者降低我们的这个制造的成本。那综合下来讲的话呢，我们对于从目前我们的评估来讲，我们不需要特别大的量啊，我们一个合理的一个一个量，这个就能达到刚才说的我说的这样的一个成本的水平。这个合理的量你们也知道，一座工厂如果1万辆一个月的生产，就算一个合理的工厂的一个在中国就可以算一个还比较健康的一个量。所以我们不需要到100万辆这样的规模才能达到这样的成本。 Thank you for the question. Actually, for Tesla, as they also public their gross margin details on the products, so it's easy for us to make a comparison. In terms of what advantages we can take for the Alps and its cost structure, actually China is the largest automotive market. It is also the biggest market for the smart electric vehicles with already well-established supply chain. So we can already leverage the advantages of the domestic supply chains here in China. Not to mention that in the past several years, we have made investments and also achieved accumulations on the R&D activities. And R&D is one of the key drivers of improving the cost structure and reducing the BOM cost of the product. In that case, we already have a pretty good foundation. With that, we don't need to really realize a very huge volume to realize that level of cost structure. In China, for the manufacturing facility, a reasonable volume will be around 10,000 units per month. We don't need to really go to the level of 1 million to realize that level of BOM cost. The cost is compared to Tesla China or Tesla Global of the 10%? Sorry, just a quick follow-up. [Foreign language] 当然我们并没有细致的Tesla China的，我们当然是说它整体的。 Okay. Thank you very much. That's quite helpful. Yeah. Yeah. To translate for that, we didn't really look at the Tesla China specifically. We are comparing with Tesla Global. Thank you very much. That's quite helpful. Thank you. Thank you. Thank you, Paul. Thank you. Your next question comes from Xing Chang from CICC. Please go ahead. Okay. Thank you for taking my questions. I have two quick follow-up questions. The first is also about the charging and also battery swap network. We can see that our network is still our construction programs of the charging network is still the fastest in China. But at the same time, we see many other companies that still are also accelerating their construction of the especially the fast charging network. So how do we think that we can maintain our first mover advantage? And also, how do we look at the relationship between fast charging and also battery swap? [Foreign language] 对。从这个充电的角度来讲，这当然大家都去建设挺好的。我们也在建设，我们也看到我们一些同行在建设，当然也有一些独立的公司在建设。我们也接近了，比如说100万跟第三方装。这当然充电桩肯定越多，这个对电动车的使用效率肯定是越高的。当然换电的话呢，我们肯定是最多的了。那虽然也有一些这个同行在建设换电站，但是和我们的差距还是差得非常大。我们已经有这个网络效应的优势。所以现在大部分正已经在做换电的这些汽车公司，也在很serious地考虑加入我们的网络。这个就跟在cloud领域发生的故事一样，最终的话都是头部这些公司自有的网络开放给这个整个行业。所以我们其实在换电这个领域也看到这样的trend。所以我一直觉得它和cloud是almost cloud infrastructure是一样的一个发展的一个轨迹。那么充电和换电的关系，我们从来都是没把它对立起来的。因为充电在很多场景下，它当然有它的这个好处，比如说加充这永远都是最好的体验。那如果你加少量的电，你当然超充也很好。那如果你非常在乎时间，那你当然换电永远是最好的体验。那就像我们今年在春节的时候，接近90%的我们的用户在高速上当然就用我们换电的服务，除非这边没有这个换电站。那所以这个解决的是不同的问题。那么换电当然另外有些好处是充电永远不可能具备的，比如说储能，那么比如说这个不需要下车，对吧，自动全自动的这样的体验，特别是可升级的这样的一些体验。那么这个我们现在新的用户里面，90%多的用户都是用我们标准续航的电池包，只有7%、8%的用户是用长续航的电池包。在我们的换电站像今天这么多之前，那是50比50的比例。所以这个能节约很多用户的这个资金和节约社会的资源。因为他们平时在上海，比如这样的大城市，他开500公里续航的标准续航电池包就可以了。如果他需要出远门，他可以租100度电池包。像我们今年春节期间就提供了很多这样灵活升级的服务。我们当然即将还会交付150度电池包，就满足那么1%、2%的这样的场景的需求。我们认为这是一个非常好的一个方案。那么还有一些的话呢，换电的话和一直用超充比，对电池的寿命当然毫无疑问是最好的一个方案。这个做一个不太恰当的一个比喻，做一个比较形象一点的比喻，就像这个细嚼慢咽肯定是对身体是更好的，这个一直狼吞虎咽肯定是要对胃肯定没有那么的好。所以anyway，就是说这个其实换电对于维护电池的寿命，延长电池的寿命，通过运营手段去延长电池的寿命，是非常好的一个终极解决方案。所以其实换电有很多的这个好处，它其实和充电不是对立的。它有很多是natural的，它的一些优势是充电是不管是怎么样的充电都是没法具备的。 Thank you for the questions. As we are very happy to see that many other car companies, including peers as well as other third-party companies, are also dedicating their resources into installing chargers in China. As the more chargers we have publicly, the better the charging experience and the charging efficiency will be. So we are also dedicating or actually, we are also installing a lot of chargers. But in addition to that, we also have many power swapping facilities. We are the car company with the most Power Swap Stations. Some companies in the industry are also installing Power Swap Stations, but so far we are still the single largest swap station operators. With that, we have already established a very good network effect where we can further leverage on that. Overall speaking, many other car companies who are serious about the battery swap or who are interested in battery swap now choose to join our battery swapping network and alliance because they can also rely on our network effect. But another thing is that the charging and swapping, these two are never in conflict with each other. Of course, for the charging, there are some special benefits. For example, if you have chargers at home, you can always enjoy the best charging experience. Or if you are on the go and you only need to charge for 20% or 30% SOC, you can also choose faster charger. But if you need to have a full charge in a very short time frame, Power Swap is still the best option for you. Like during the Spring Festival, over 90% of our users traveling on highways choose to do the Power Swap than doing the charging. So that's the special benefit of Power Swap. Not to mention that the battery swap station itself is a natural energy storage system. When users are doing Power Swap, they don't need to get off the car. The entire process is fully automated. Not to mention that we also have a battery upgrade that is enabled by the swappabilities of the battery. For example, 8% of them chose a 100 kWh battery pack. That is our long-range battery pack. But before we had this many Power Swap stations in China, 50% of our users actually chose a 100 kWh battery pack. By having more users choosing standard-range battery packs, the benefit is that if you're only driving the car in Shanghai for the daily commute, you can be having a sufficient range with 75 kWh. But when you need to have a weekend getaway where you need to travel for a long distance during the holidays, like during the Spring Festival, you can use the flexible battery upgrade to upgrade to a 100 kWh battery. For example, during the Spring Festival, many of our users have chosen to upgrade their batteries flexibly. Very soon, we will launch a 150 kWh battery pack, which will fulfill a very rare need, maybe only 1%-2% of the use cases where users need to travel much longer. Another benefit of a Power Swap is regarding how it can benefit the management of the battery life. Because I can use the analogy: if you eat too fast, it can damage your stomach than eating in a very slow manner. It's similar to the Power Swap because if you always use supercharging, such quick charge may damage the battery life of your battery. But with battery swap, we can balance out the battery life. Not to mention that we can also use other operating approaches and mechanisms to further enhance the battery life. So overall speaking, we don't think battery swap and charging are conflicting with each other, and these two actually come hand in hand. Thank you, Xing Chang. Okay. Thank you. My second question is regarding the lower-tier cities market. And we see that in 2023, our sales proportion in first-tier cities has been increased a little bit percent. So also our sales proportion in especially third-tier and below cities is still less than 20%. So compared to BMW, which that will be exceeding 40%. So in terms of marketing and other aspects, so do we have some methods to break through further to the lower-tier cities? [Foreign language] 对。这其实是我们在24年要着重解决的一个问题。事实上，我们从23年下半年开始已经在三四线城市去进行投入。我们目前如果去看的话，我们确实一线城市，特别是长三角，占我们的销售比例还是非常高的。那么长三角就占我们50%以上的这个销售量。那如果把一线城市全部算下来的话，可能占我们七八十%左右，70%以上的一个销售量。那么我们确实要解决这个渠道，这个高效的渠道的下沉的问题。我们有一些方法都在试。那另外一方面的话呢，我们也认识到基础设施对于这种在三四线甚至更下沉的市场的这个销量的这个重要性。所以我们今年呢，有相当一部分的充换的基础设施，我们会部署在这样的一些下沉市场。那增加我们在这些地方的这个用户的体验的竞争力。那总的来说，这是我们24年非常重要的一个机会，也是我们非常重要的一个非常大的一个挑战。我们要找到一些更高效的方法在下沉市场能够增加我们的这个销量。 Thank you. Thank you for the question. It's true that in 2024, we need to solve the problem regarding enlarging our reach in the lower-tier cities and also boost the sales in those cities. We have realized the significance of this, and we have already started to take actions in the second half of 2023 by enlarging our reach into the lower-tier cities. Right now, if you look at our sales volume distribution, basically more than 50% of our sales volume is contributed by the sales in the Yangtze River Delta areas. And if we look at all the tier one cities, more than 70% of the sales actually happen in the first-tier cities. It's very important for us to find the right approach to penetrate into the lower-tier cities and enlarge our channel reach in these cities. On the other hand, we have also realized that the infrastructure, like the charging and the swapping facilities, are also playing a very important role in boosting the sales in these lower-tier cities. This year, we will also focus on installing more chargers and swap stations in the third or fourth-tier cities so that we can enhance the overall user experience and competitiveness in those areas. This is an opportunity as well as a challenge for us in 2024. We need to find the efficient approach to tap into the lower-tier cities and to improve the sales volume in those areas. Thank you. Yeah. Fine. Thank you, William, for answering all of my questions. Thank you. Your next question comes from Tina Hou from Goldman Sachs. Please go ahead. Thanks for taking my question. The first question is regarding your sales network and sales team expansion plan this year. Just wondering, for both the NIO brand and for the Alps brand, how many new stores do you expect to open this year, and how many new salespeople do you expect to hire for each of these brands? Hi, Tina? Yes. Hi, Tina. Can you repeat your question, please? Oh, sorry. So my first question is regarding your sales network and sales team expansion. So could you share, for 2024, how many stores do you plan to open for both NIO and the Alps brand, and also how many salespeople do you expect to hire for these brands? [Foreign language] 从NIO的角度来讲的话呢，我们还会在跟就因为我们现在已经有这个500加起来有500个店了，所以事实上来讲，我们现在更多的是在提高这个店效，所以包括去取代一些低效的店。所以在这方面的话呢，这个店的扩展不是我们的首要任务。我们的人员的话呢，现在我们也已经有5,000多人，所以人员扩展也不是我们的优先任务。现在重要的还是提高这个经营的这个效率，这是我们的首要的工作。当然，我们还会做一些扩展，但是不会是我们最主要的一个动作。当然，这个我们的第二品牌的肯定是毫无疑问是这个因为它是一个全新的渠道，我们已经在锁定了这个足够多的资源。在我们肯定不会给那么长时间太前置期去开店，但我们已经有足够多的资源。所以今年从总的来说的话呢，我们目标是不低于200家的这个网络，在这个新的品牌方面。当然，人的话呢，因为相对来说，因为它今年只有一款车，所以它的这个销售效率肯定会高一些。我们现在也是通过NIO的体系，我们会提前储备一些销售人员。那么在这个Alps上市以后，在我们的第一款产品上市以后，能够迅速地去这个具备非常成熟的一个销售体系的人员。这方面我们比从零开始肯定是要方便一些。所以这个总的来说，我们觉得人的问题在招聘他们、培训他们，在这方面不会是一个主要的问题。我们还是要看看到时候的一个销售的一个这个效率，这个是在一个合理的水平吧。 Thank you for your questions. For NIO as the brand, actually, we have already opened 500 NIO Houses and NIO Spaces in China. So for this year, our priority is not on opening up more stores or spaces for the new brand. Instead, we will focus on improving the efficiency of each point of sale, including phasing out some low-efficiency locations and replace them with stores and locations of higher efficiencies. And in terms of the sales force for the new brand, so far we already have more than 5,000 people on the team. And enlarging the team will not be the focus either. Instead, we will focus on the efficiency of the overall operations of the team. So enlarging the sales team or increasing the number of sales stores for NIO will not be the priority for the current year. When it comes to our new brand, the second brand, the approach will be different. We have already secured some locations and resources for the new brand. We will not have a very long lead time to prepare for the store opening. Basically, when we launch the brand, we also hope that we can open no less than 200 points of sales for the second brand. In terms of people, it's the same logic as we can leverage the existing training system of NIO to train the team, to make the entire sales team prepared for the launch of the very first model. We will focus on the efficiency of such a sales team. Not to mention that for Alps, they will start with only one product. The efficiency of the sales should be relatively easy to manage and improve. This is also another advantage of starting a brand based on existing resources and the network of NIO than starting everything from ground up. Thank you, Tina. Thank you very much, William. Can I just have a follow-up? Would the Alps store location resemble that of NIO's location? [Foreign language] 这个还是Alps会根据它自己的目标用户群去这个布局这个销售网络。和NIO这个它不是一个不会follow同样的一个地址。它会是独立的选址的原则，因为它的目标用户群，包括它的价位，还是会不太一样的。 As Alps, our second brand is targeting at different types of user groups with different price segments and range, which means that this brand will also have its own principle and logic for the store locations and network development. So for Alps, they will select their own stores and locations and also deploy the network according to their own demand. [Foreign language] 当然，它的这个效率也肯定会更高一些，因为相对来说它不会像NIO这样需要去建立NIO Houses这样的这个销售网络。它的这个它更像类似于Tesla这样的，会更加的这个以效率优先一些。 Of course, the sales network of Alps will also be more efficient as Alps does not need to have the full-fledged sales stores like NIO House. Its point of sales will be more efficiency-oriented, similar to the sales stores of Tesla. Thank you. My second question is, could you give us some CapEx guidance for 2024 and then the breakdown between vehicle CapEx and also your charging swapping infrastructure CapEx? Hi, Tina. Yes, sure. We will control our CapEx investment in 2024. We already canceled a delayed project with a payback period longer than 2-3 years. Generally, the CapEx in this year will be significantly lower than 2023. Regarding the deployment of our Power Swap station network, we will fully leverage the resources of our business partner for the further expansion, as mentioned William in previous statements. Yeah. That means we. Great. Thank you so much. Yeah, utilize our own resource to build the network. Yeah. Thank you. So will not utilize your own resource? Yeah, for the Power Swap network station network, we minimize to use our own. Thank you. Yeah, that's very clear and helpful. Thank you. Okay. Thank you. Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks. Thank you again for joining us today. If you have further questions, please feel free to contact NIO's investor relations team through the contact information on our website. This concludes the conference call. You may now disconnect the line. Thank you.