Hello, ladies and gentlemen. Thank you for standing by for NIO Inc's first quarter 2025 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 first quarter 2025 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website. On today's call, we have Mr. William Li, Founder, Chairman of the Board, and CEO, and Ms. Stanley Qu, Chief Financial Officer. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the 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 views expressed today. Further information regarding risks and uncertainties is included in certain filings of the company with the U.S. Securities and Exchange Commission, the Stock Exchange of Hong Kong Ltd, and the Singapore Exchange Securities Trading Ltd. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that NIO's earnings press release and this conference call include discussions of unaudited 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 2025 Q1 earnings call. In Q1, the company delivered 42,094 smart EVs, up 4.1% year- over- year. This includes 27,313 deliveries from NIO and 14,781 deliveries from ONVO. Since Q2, the company's deliveries have picked up pace month over month, supported by a solid start of delivery 89 and five lines, and a growing demand for ONVO L60. In April and May, the total deliveries were 23,900 and 23,231. In late May, we successfully launched and delivered the new ES6, EC6, ET5, and ET5T. We expect total deliveries in Q2 to be between 72,000 and 75,000, representing 25.5%-30.7% growth year- over- year. On the financial side, the company continued the cost reduction efforts on all fronts, achieving year-over-year growth in both vehicle gross margin and overall gross margin. Now, I'd like to share some updates on our products, R&D, and operations. For the NIO brand, the deliveries of ET9, NIO's executive flagship sedan, surpassed BMW 7 Series and Audi A8L in China in the first four delivery months. This marks the first time that a Chinese brand has made a breakthrough in the premium executive segment, long led by BBA. On May 16, we launched the new ES6 and EC6 and started delivery on May 20. On May 25, the new ET5 and ET5T were launched, and the delivery started on May 27. These upgraded models deliver greater perceived value and product strength, along with major improvements in cost. For the NIO brand, for the ONVO brand, since April, ONVO has rolled out a series of operational and organizational adjustments, significantly improving the productivity and operational efficiency of the sales force. Such changes also shifted ONVO towards a positive cycle of brand awareness and product reputation. With that, ONVO's orders have been rising steadily since late April. ONVO's second product, L90, a smart large space flagship SUV, made its debut on the Shanghai Auto Show. With a class-leading space, ultra-low energy consumption, and extensive charging and swapping network, ONVO L90 has drawn strong interest from three-row SUV buyers. This model will be launched and delivered in Q3. The smart electric high-end small car brand, Firefly, has started product delivery in late April. Engineered for the five-star safety in China and Europe, and with a sought-for space, smart digital experience, and vivid driving dynamics, Firefly stands out in its segment. In terms of tech innovation, NIO's smart driving chip, NX9031, has been deployed in the flagship model, ET9, as well as the new ES6, EC6, ET5, and ET5T, and will be rolled out on more new models of NIO. These new models are also equipped with NIO's full-domain vehicle operating system, SkyOS, and the intelligent chassis system. Such innovations not only enhance the product competitiveness and also improve the vehicle cost structure. As for smart driving, the first NIO World Model-based version has been rolled out to vehicles on the Banyan platform since late May. The NIO World Model, or NWM, provides full upgrades in active safety, urban and highway driving, as well as parking, especially in key areas of active safety. NWM brings enhancements in handling driver emergencies, mitigating and preventing rear collisions, and recognizing general objects. Based on NWM's comprehensive understanding and reasoning of much model information in real time, Navigate on Pilot Plus, or NOP+, can guide cars through toll gates across China, with automatic navigation to frequent parking spots, as well as mapless and non-memory-based wayfinding in parking lots. NOP+ also delivers a seamless point-to-point smart driving experience. NIO's World Model will continue to iterate, bringing safer and smarter driving across all scenarios. So far, NIO operates 184 NIO Houses and 461 NIO Spaces, and ONVO has 445 stores in China. On the service side, the company operates 391 service centers and 66 delivery centers. We will continue to improve efficiency and resource allocation through better operations and performance evaluation across the sales network. As of now, the company has 3,408 Power Swap stations worldwide, including 989 stations on highways in China, and has provided over 75 million swaps to users. Besides, NIO has installed over 26,000 power chargers and destination chargers. To date, NIO's Power Swap network has achieved country-level coverage in Beijing, Shanghai, Jiangsu, Zhejiang, Guangdong, and Tianjin. Next, we will continue to expand the coverage through partnerships with site operations, great companies, and capital investors. In international expansion, NIO has partnered with more than 10 local partners in over 15 core markets worldwide and is onboarding more partners. In Q3, Firefly will roll out in various markets, delivering global user experience beyond expectations. On April 7, NIO completed a share offering in Hong Kong, raising over HKD 4 billion. This financial round was oversubscribed multiple times and has brought in a number of global long-term investors. 2025 is a happy year for products. As multiple core models are to be launched in the second half, the company's deliveries are set to accelerate from Q3, with stronger sales, lower supply chain costs, and better bond efficiency from new products and technologies. Both vehicle and overall gross margin will keep improving. In improving operational efficiency, since Q1, we've implemented strict investment and return reviews across R&D, supply chain, sales, and service functions under the SaaS business unit mechanism. We've set clear goals for operationals and ROI. We structured the organization and consolidated teams, prioritized high-value projects, and introduced plans to improve productivity and cost efficiency. These measures have taken hold in Q2, and we will continue through the year. With growing sales, improving margins, and better cost control, we are confident in improving the company's financial position starting Q2 and meeting our four-year business targets. Thank you for your support. With that, I will now turn the call over to Stanley for Q1 financial details. Over to Stanley. Thank you, William. Let's now review our key financial results for the first quarter of 2025. Our total revenues reached RMB 12 billion, increased 21.5% year-over-year, and decreased 38.9% quarter- over- quarter. Vehicle sales were RMB 9.9 billion, up 18.6% year- over- year and down 43.1% quarter- over- quarter. The year-over-year growth was mainly due to higher deliveries, partially offset by a lower average selling price from product make changes. The quarter-over-quarter decrease was mainly attributable to fewer deliveries impacted by seasonality. Other sales were RMB 2.1 billion, grew by 37.2% year- over- year, and decreased 5.9% quarter-over-quarter. The annual growth was from increased sales of parts, after-sales vehicle services, and provision of power solutions, along with a rise in sales of used cars and technical R&D services. The decrease quarter-over-quarter was due to decreased sales in technical R&D services and auto financing services. Looking at margins, vehicle margin was 10.2%, compared with 9.2% in Q1 last year and 13.1% last quarter. The year-over-year increase was mainly due to lower material cost per unit, partially offset by changes in product mix. The quarter-over-quarter decline was mainly due to the increased manufacturing cost per unit from lower production volume. Overall gross margin was 7.6%, compared with 4.9% in Q1 last year and 11.7% last quarter. The year-over-year increase was mainly driven by, first, higher sales of parts, accessories, after-sales vehicle services, and technical R&D services, which carry relatively higher margins; second, higher vehicle margin; and third, the reduced gross loss rates from power solutions as our user base grew. The decrease quarter-over-quarter was mainly attributable to lower vehicle margin. Turning to OpEx, R&D expenses were RMB 3.2 billion, increased 11.1% year-over-year, and decreased 12.5% quarter-over-quarter. The year-over-year increase was mainly due to the incremental design and development costs for the new products and technologies, as well as the increased personnel cost in R&D functions. The quarter-over-quarter decrease was mainly driven by decreased design and development costs resulting from different stages of development, partially offset by increased personnel costs. SG&A expenses were RMB 4.4 billion, up 46.8% year-over-year, and down 9.8% quarter-over-quarter. The year-over-year increase was mainly driven by the increase in personnel costs related to sales functions and the increase in sales and marketing activities. The quarter-over-quarter decrease was mainly due to the decrease in sales and marketing activities and professional services, partially offset by the incremental personnel costs. Loss from operations was RMB 6.4 billion, up 19% year-over-year and 6.4% quarter-over-quarter. Net loss was RMB 6.8 billion, showing an increase of 30.2% year-over-year and a decrease of 5.1% quarter-over-quarter. That wraps up our prepared remarks. For more information and details of our audited first quarter 2025 financial results, please refer to our earnings press release. Now, I will turn the call over to the operator to start our Q&A session. Thank you. 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. If you have additional questions, you can then re-enter the queue. Your first question comes from Tim Shwalje with Morgan Stanley. Please go ahead. Hi, William, Stanley, and [Chen]. Thanks for taking my question. This is Tim from Morgan Stanley. I actually have two questions. The first one is about the volume sales. Because if you look at the announcement, the NIO's second quarter volume guidance of 72,000-75,000 vehicles, I think that implies a more moderate sales increase despite the rest of launches of four new models. Looking forward, how could NIO give the salesman's day value defiance series an extra push in the following months to achieve our previous target of 30,000 monthly sales for the NIO's main brand by year-end? That's my first question. Thank you. [Foreign Language] Thank you for the question. As we have stated, our quarterly guidance for the delivery is 72,000-75,000 units. In that case, we expect to deliver around 25,000-28,000 units in June. In terms of the core volume driver for the NIO brand, as we have just recently upgraded and launched our all-new five five, and six six, these are our new EC6, ES6, ET5, and ET5T in late May. We have just started delivery of these four new models. They are going to experience their first full delivery month in June. As you can tell from their MSRP, there is actually no major changes with the selling price of these four models. Yet considering that before the launch of these four models, to clean up the inventories, we had provided some promotions on these four models in the previous generation. With that, the actual price increase is around 10% from last generation to this generation. For the next step, we're going to stabilize on the prices of these four new models. Looking at the vehicle gross margin, actually the improvement is more than 10% from last generation to the model year 2025. Also, the bigger principle for us is to realize a good gross profit than simply looking at the vehicle sales volume. As we also look at our overall performance from the P&L perspective, in that case, we really need to strike a balance between the sales volume and also the selling prices of our product. In the meantime, we will keep improving our operational efficiency and systems. Going into the fourth quarter, we are going to introduce our all-new ES8, the next generation ES8, which is a highly competitive product. With that, we believe that in Q4 for the NIO Brand, the monthly delivery will be around 25,000 units. That's around 20% year-over-year growth from last year's Q4, which was around 20,000 units a month. In that case, while improving the sales volume, we are also going to improve our vehicle gross margin significantly for the NIO Brand to be above 20% in Q4. Thank you very much, William. Yep, my second question is about the cost reduction. Because we noticed that NIO has implemented a series of cost-cutting measures over the past six months. When are we going to see more meaningful contribution from such cost reduction effort? Could you please quantify and specify which categories we could probably see more significant improvement in the second half? That's my second question. Thank you. [Foreign language] Thank you for the question. As you've mentioned, since March, we have conducted a series of cost control and efficiency improvement measures. Here I would like to further elaborate on that from the following aspects. The first is regarding our short-term work. Basically, we review and sort out all the key matters, projects, and organizations, and look at the things that are not going to generate positive return on investment within the year, and we have made determined actions in terminating or postponing them for the short-term return. The second is regarding the efficiency improvement. This is also mentioned by William in his prepared remark. In terms of improving efficiency, we also conducted the actions in the following aspects. The first is from the R&D perspective. We have established a new mechanism called vehicle product line. With that, we have majorly merged the R&D resources of the NIO brand, our brand, and the Firefly brand to further improve the overall efficiency of our R&D activities. [Foreign language] The second is regarding the improvements in the industrialization cluster. We have optimized and restructured the logistics functions, quality functions, and also supply chain functions by streamlining the team and also merging repetitive roles. Certainly, we have also made improvements in the sales and the service side. For the non-frontline teams, we have also made major improvements and also consolidations on the teams, including their roles and also positions to better improve the efficiency and the productivity of the teams, especially the backend teams. With that, we are going to witness the savings from the operating spending perspective, and such saving will be reflected in our Q2's earnings and also the corresponding results. [Foreign language] More specifically on the tighter control over the spendings. Regarding the R&D spending, in Q2 our target is, after excluding the one-off impact, we would like to achieve a 15% improvement or actually R&D spend reduction. In Q4, as we also have the break-even target, we aim to control our R&D expenses to be within RMB 2 billion-RMB 2.5 billion per quarter. That represents a 20%-25% year-over-year decrease from last year. Regarding the SG&A expenses, as this is also relevant to the marketing activities and also the tightened competition in the market, as well as our sales performance. We will also manage the SG&A expenses in a very careful and prudent way, carefully balancing the return and also the investments on all these campaigns and activities. The target is to reduce the SG&A expenses quarter-over-quarter from Q2 this year. By Q4, considering the break-even target as well, our target is to control our mnon-GAAP SG&A expenses to be within 10% of the sales revenue. Thank you, Tim. Thank you. Thanks a lot. Your next question comes from Ming Hsun Lee with Bank of America. Please go ahead. Thank you, management. This is Ming. I also have two questions. My first question is related to your NIO World Model. After you launch the NIO World Model in May, what is the feedback from your users? Also, compared to your original rule-based autonomous driving solution, how more advanced is it after you launch your World Model? For your chip, because right now in certain models you are using your own design chip, you already save some cost. Do you also give up those benefits to the users? In the future, will ONVO also use the same chips? Thank you. That's my first question. [Foreign language] Thank you for the question. In late May, we have started to release and roll out our first smart driving version based on the NIO World Model (NWM) to the Banyan users. Those are the users who are running on our second generation platform product. [Foreign language] Actually, in the previous versions, we have already released a series of active safety features based on our end-to-end architecture and solution. With that, we also see significant decrease in the accidents and also the avoidance of the accidents and better driving safety with our active safety features. For example, for the NIO World Model, we have also released the emergency safety pullover. This also is one of the first in the industry. Overall speaking, our vision for smart driving is to reduce traffic accidents. In that case, our active safety and our smart driving feature in general has been leading in the industry. [Foreign language] The second key vision of our smart driving is to relieve the driving pressure and stress. In that case, NWM-based version has also provided better experience across all scenarios. For example, we are also one of the first to release the point-to-point smart driving and also parking. Overall experience is better than our peers in the industry. With NWM, we have achieved better experience in highways and also urban expressways. Our original experience based on the previous version was already good. Right now, we have made the overall smart driving experience even more seamless. For example, automatic pass-through of the toll gates on highways. In terms of the smart driving in urban roads, we have also achieved very good point-to-point smart driving. That is basically smart driving from a parking lot to parking lot with high usability and good experience. Basically, we have achieved good smart driving experience across three key scenarios of our users. [Foreign language] For example, we have released this automatic wayfinding in the parking lots where our users can provide natural language comments to ask the car to navigate to a parking space across different floors or even regions within the parking lot. This is just one of the many new features that we are going to release based on the NWM-enabled smart driving features. With that, we also see the possibilities in improving the experience with the NWM. Overall speaking, this is a version that we have restructured the entire smart driving with our data close loop and also feature close loop. For the next step, we will keep improving and iterating this feature based on the feedback provided by our users to make the overall experience more seamless and also more useful. [Foreign language] That is the NWM-based smart driving version released to the Banyan system. In the meantime, as our third-generation platforms, Cedar and Cedar S on ET9 and also the new five five and the six six products, they are running on our in-house developed smart driving chip NX9031. The NWM-based version running on the NX9031 will be released in late June. That is our expected release date. That is around one month later than the release to Banyan platform, and the specific release date will also be dependent on the actual approving process and the reporting process. The R&D process is actually in good progress. [Foreign language] For the long term, ONVO products will also switch to the in-house developed smart driving chip. Next question is related to ONVO brand. After you have some measurement change, what is the strategy to enhance the volume sales of L60? Also, what is your expectation of L80 and L90? [Foreign language] Thank you for the question. In April, we have made major organizational and operational adjustments to ONVO, including the adjustments to the core management team, sales team, as well as the regional teams. As we were making major investments, the good sign is that we did not see major impact or negative impact on the sales volume of L60. Actually, in late April, we witnessed the growing order momentum of this product. In May, the monthly delivery of L60 is more than 40% higher than in April. These are the positive changes that we have seen. [Foreign language] If we look at the actual product performance and competitiveness in the market regarding L60 in the first four months of this year, among the battery electric vehicles priced between CNY 200,000-300,000, ONVO L60 has been the top three best-selling products in that segment. We also expect its performance to continue to pick up in May and June. This has also demonstrated the strong product performance and strength in the market. [Foreign language] However, the product competitiveness and performance is just one of the foundations. In the meantime, we also see the maturity with our sales and service network. ONVO now has more than 440 stores, and many of the stores, including the front line and the fellow teams, are also getting more mature and adapted to the job. In that case, for the next step, we will also, as they are making major contribution or growing contribution to the sales volume for the next step, we will also keep improving the operating efficiency and also productivity of the teams and stores. [Foreign language] The third key driver is regarding our battery swap and also battery charging and swapping network, mainly the battery swapping network. Right now, in China, more than 1,900 Power Swap stations are available for ONVO users with a lot more batteries available or circulating in the Power Swap systems for the ONVO users. In the meantime, we are rolling out this power-up county plan where we are increasing the county level coverage of our Power Swap network. So far in Beijing, Shanghai, Jiangsu, Zhejiang, Guangdong, and Tianjin, we already see the county level coverage of our Power Swap network. For the next step, we will continue to increase such coverage across more provinces and counties, which will be actually even more important for the ONVO users and products. [Foreign language] In the meantime, in lower- tier cities like third or fourth- tier cities, we are also trying to use a Power Swap station as a window of opportunities or point of sales for the sales and operations, but of a lower fixed cost than a physical store. To put it simple, basically in some counties and also prefecture level cities, we do not need to open up the actual stores or showrooms. Instead, we can use a Power Swap station as a point of sales to present our product and provide experience and trust drive sessions for our users, supported and facilitated by the local sales team. This is actually a unique advantage of NIO as the entire company, especially to boost the sales in the lower tier cities. This will be very important and also a systematic approach to boost the sales of ONVO. [Foreign language] With that, we are confident that the monthly sales volume of ONVO L60 will be bouncing back to more than 10,000 units. In the meantime, the second product of ONVO, L90, will be released and delivered in Q3 this year. Since its debut at the Shanghai Auto Show, we have also brought the product to several cities for showcasing, and our users are actually looking forward to this product as L90 comes with a huge frunk. This has also solved one of the biggest pain points of a three-row SUV without enough space for storage and luggage. In the recent information released by the MIIT, ONVO L90 also boasts impressive energy consumption and energy efficiency within its class. Basically, we believe that L90 will be a game changer in the large space SUV or three-row SUV segment. In Q4, we will also release the L80 product. By the end of this year, there will be three products under the ONVO brand, and these three products will all be targeting family segments with high build qualities and experiences. This lineup will also provide better synergies. In that case, our target is to realize a monthly delivery of 25,000 units of these three products in Q4. Thank you, Ming. Thank you, William. Your next question comes from Ben Wang with Deutsche Bank. Please go ahead. [Foreign language] My first question is about the second quarter because you got a new first product after spending higher price and used the in-house semiconductor. In any chance, you got a further margin expansion in the second quarter for vehicle margin, which will help the overall gross margin back to double digit. [Foreign language] [Foreign language] [Foreign language] Thank you for the question. As in Q2, we have completed the product transition for the NIO brand. We have successfully launched and started to deliver our new ET5, ET5T, EC6, and ES6. With that, we also witnessed the increase in the average selling price of the new models. Also, as the new models are equipped with the in-house developed chip, this can also contribute around RMB 10,000 saving and cost reduction per unit. With that, in Q2, the vehicle gross margin of the NIO brand will be improved to around 15%. For the ONVO brand, as in the second quarter, it will still only have one product, L60, as the L90 will be released in Q3. As we expect the growing volume for the L60, we also expect certain improvements regarding the manufacturing cost driven by the volume increase. As it is only contributed by one model, the improvements from the manufacturing cost perspective will be limited. The major gross margin driver for the ONVO brand will still be happening in Q3, driven by the launch of the new model. With that, we believe that the overall gross margin in Q2 will be coming back to double digit. That is our target. [Foreign language] A little bit more information on the NIO products. As our core volume products five five and six six were having the vertical product transition during April and May, with that to clean up the inventories for the previous generations, we offered promotions with that. The actual vehicle margin for that generation was relatively low. Starting June, as we are rolling out and delivering new products, we also witnessed better or improved margin on this product. For ES6, the vehicle gross margin will be around 20%. EC6 is slightly higher than the ES6. Also, for the ET5 and ET5 Touring, we also expect improved vehicle gross margin. Overall speaking, for the NIO brand, the vehicle margin improvement is on the right track. [Foreign language] My question is about the number four quarter breakeven assumptions. Basically, you just guide that NIO brand will reach 25,000 monthly in the number four quarter this year. Similarly, ONVO brand will also have 25,000. If NIO can sell 130,000 in the number four quarter, we have [RMB] 250,000. Roughly, we can reach 35 billion top line. If we assume we got 18% gross margin, we can reach roughly 6 billion gross profit. You just mentioned you further you guide the R&D space will decline to 2.5 billion. You also actually guide that the same space will be around 10% of the top line. Overall, the total OpEx will be around 6 billion. Can I assume this is roughly the assumption to reach a breakeven in number four quarter? Thank you. [Foreign language] Thank you for the question. Actually, the equation you have mentioned is more or less our operational target internally as well. Regarding the monthly sales volume, slightly over 50,000 units a month, vehicle gross margin 17%-18% combined margin, SG&A expenses within 10% of the sales revenues, and for the R&D expenses also achieving that level of management and control. With that, we are able or we have the confidence of achieving the breakeven as we see also our peers who achieve the profitability running on the similar scale and also the similar numbers. [Foreign language] Back in 2021, when we just had one NIO brand, we also managed to achieve a vehicle gross margin of over 20%. Back then, we have not started the major investment in the R&D or the multi-brand strategy. As starting recent years, we have witnessed quarter-over-quarter losses, mainly because of our intensive investment into the R&D of the new products and technologies, multi-brand strategy, and also the network development, especially infrastructure network. Starting Q2 this year, we are also starting off a year of a harvest or a period of harvest where we are going to see the tangible results starting Q2 and then towards Q4 this year, the results from our brand development, product development network, and also network development, as well as the cost reductions and efficiency improvement. With that, I think your equation or your assumption is kind of also a guidance for us to achieve our operational target and also profitability in Q4 this year, and we are confident in that. Thank you, Ben. Thank you very much. Thank you. Your next question comes from Paul Gong with UBS. Please go ahead. Hi, William. Thanks for taking my question. My first question is regarding the market feedback after the delivery of the 5 Series and 6 Series. I have seen some positive comments, but also have seen some disappointment among some of the car buyers saying it is still using like 400 volts battery instead of like the 900 volts like the ET9. Do you have any plan to switch into the 900 volts battery system at certain points? What other feedback have you received from the car buyers? That's my first question. Thank you. [Foreign language] Thank you for the question. Since the launch of our new ES6, EC6, ET5, and ET5T in late May, we have received quite a lot of market feedback and mostly positive, as people do see significant improvement in the product competitiveness, especially for the chip technologies, SkyOS vehicle operating system, and also active safety features we have debuted on the ET9 are also now available on the 5 and the 6 Series models. [Foreign language] Regarding the high voltage platform for the five five and the six six, they are still running on the 400 volts. The overall feedback is also okay, as we not only have improved the energy efficiency of these four models for extended driving range than the previous generation, we also have our Power Swap network that can ensure a good experience for our users. Especially, we have this chargeable, swappable, and upgradable network enabled by the Power Swap. We also provided the flexible battery upgrade vouchers to our users for the new five five and the six six models. In that case, they have the flexibility to upgrade to 100 kWh battery for longer range. If they would like to have an even longer range, they can also choose to upgrade to 150 kWh battery with more than 1,000 km driving range. Overall speaking, with improved energy efficiency and also chargeable, swappable network, the feedback on the high voltage system is fine. For the short term, we do not have planned to upgrade these four models to the 900 volt architecture platform. Thank you, Paul. Yeah, thank you. My second question is regarding the channel network. Right now, you have the NIO and the ONVO two networks, and Firefly is sold within the NIO system. Just now, you have mentioned that there is some innovative and NIO exclusive solutions by devolution with a battery swap station and to do the product demo and show up. Do you foresee at certain points that you could further reform the channels and by devolution with synergies between the two networks and perhaps some cross-sell or certain like merger of the network? How do you think about the channel management? [Foreign language] Thank you for the questions. Regarding the point of sales for the ONVO and the NIO brands, we will still keep them separated. In the mid and the back end, we are leveraging the synergies and also better integrate between these two brands, both in the headquarters and also in the regions. Actually, in many regions, the general managers of those regions are taking the concurrent roles to manage the sales of both NIO and the ONVO brands. Overall speaking, we will better integrate these two brands from the mid and the back end perspective for better efficiency and synergies. In the meantime, we will also need to strike a balance between efficiency and the brand differentiations. The longer term is to further integrate and leverage the synergies, but we will not be combining the point of sales. [Foreign language] Regarding using Power Swap stations as a point of sales, we are doing some demonstrations and the pilot runs in certain regions where we will not open the stores, but use the Power Swap stations as a window to reach out to our users and demonstrate our products and services. In that case, we will have the sales team and the fellows on site, but they will promote the product without having the stores. This is actually a unique selling point or a unique advantage of the NIO company by leveraging the Power Swap stations. Especially for the ONVO users, in our survey, we have found that around 60% of ONVO users actually think Power Swap station or the capability of doing Power Swap is the top purchasing reason for them to buy the ONVO products. This is also another demonstration of the significant value of a Power Swap for the ONVO products and ONVO sales. The same actually happens to the NIO brand, as there is a small county in Shandong called Xingfu County, and in that place. [Foreign language] Actually, it's a town. There is a town in Shandong called Xingfu Town. In that place, we have no stores or showrooms, but only several Power Swap stations. In that place, we have more than 1,000 NIO users. This is also a lively case showing how Power Swap station can contribute to the sales volume. In that case, we are doing a series of systematic measures and also designs centering on using Power Swap as a point of sales. Thank you, Paul. Thank you very much, William. That's quite helpful. Your next question comes from Yuqian Ding with HSBC. Please go ahead. Yeah, thank you, [Jing]. I got two questions. The first is continuous on ONVO model. The two new models are actually at a higher pricing point. What was the key selling point against the current backdrop that seems to be a little bit of a consumption downgrade this year? And roughly, what's the mix between 60, 80, and 90 expectations, especially by the end of the fourth quarter? [Foreign language] Thank you for the question. ONVO L90 is a smart large space flagship SUV. It's a three-row SUV, and L80 is a large five-seater SUV, and both models are mainly for the family users. [Foreign language] Overall speaking, for the ONVO's products, it is based out on NIO's technology and innovation with a targeted design for the family users. [Foreign language] With that, we actually studied the mainstream family users in the Chinese market, and we have developed a value equation for the product definition and also development of the ONVO brand. With that, our design and also functionalities of the product will mainly serve the value creation for the family users. [Foreign language] As we have debuted the L90 at the Shanghai Auto Show, we have demonstrated how large the space is with this model, especially with its big frunk. With six occupants on board, the car is still enough to accommodate 10 suitcases. Actually, this is an unprecedented functionality for a three-row SUV, be it running on batteries or ICE or range extender. This is actually a product innovation driven by our tech innovation and space innovation. [Foreign language] In the recent information released by the MIIT, people are also impressed by the low energy consumption and the energy efficiency of the L90, because it is such a big three-row SUV, and running on a 85 kWh battery, the car still manages to achieve 600 km driving range. This is actually an impressive result achieved on this model, and also a very important advantage for the family users, considering the overall driving range and also the cost of their ownership. [Foreign language] Actually driven by the tech innovation and also the lowering lithium price or in general battery costs, we are seeing a turning point for the growth of the mid and the large SUV, battery electric SUV. If you look at the first four months of this year regarding the growth rate in the mid to large and also large SUV segments, the growth rate for the BEV models is actually 63% year-over-year. For the range extended version, it is only 1%. For PHEV, it is also roughly 60%. With this as a backdrop, we believe that L80 and L90 will be two game changers in this segment, and we have confidence for that as we are creating better experience and also more user value through our tech innovation and the product innovation. Plus, we have our nationwide available Power Swap network to help relieve the range anxiety of our users. With that, we believe that this year we'll also witness the turning point for the growth of mid and large battery electric SUV segment. Thank you, Yuqian. Thank you, William. Sorry, go ahead, please. Yeah, sorry. [crosstalk] Yeah, please. [crosstalk] While the company is heading towards the fourth quarter break-even target, we're also conscious that the earning ratio is also running high. Could you share a little bit more about the cash flow improvement and the cash management? [Foreign language] Thank you for the question. In Q1 this year, we've seen the lower range of our cash position. This is partially due to the seasonality of the car sales, as in Q4 last year, our sales volume was 72,000 units, while in Q1 it's 42,000 units. That has actually caused the outflow of the working capital of more than RMB 10 billion. In the meantime, we also have some capital expenses, as well as the one-off expenses, for example, the put option for our convertible bonds, which is around RMB 2.7 billion. In the meantime, we are also raising funds. In late March, we have completed the fundraising through our Hong Kong Stock Exchange and raising around HKD 4.03 billion. Yet this part of the fundraising was not recognized until early April, so it was actually not recognized in our Q1 financial results. As we have shared, starting April, we are seeing our sales volume pick up the pace. With that, this will also help bring our operating cash flow to the normal track. [Foreign language] As we have mentioned, our volume guidance for Q2 is between 72,000- 75,000 units. This will help further improve our operating cash flow. In Q3 and Q4, we have higher expectations and targets for the sales volume, which will help our operating cash flow to continue to grow and improve in Q4 this year. For the full year, we also see the possibility of achieving positive free cash flow. [Foreign language] In the meantime, we will continue our cost reduction and efficiency improvement efforts to have a tighter control over our OpEx and CapEx to make sure that our expenses are necessary. [Foreign language] Thank you. The next question comes from Xing Cha ng with CICC. Please go ahead. Thank you for taking my question. I only have one question about the overseas market strategy or target, and especially for the Firefly Global expansion. Regarding the overseas market, I think that last year we have already achieved sales volume of several thousand units, especially in the European market. In this year, from the beginning, we see that several brands in the European market, they expand a lot and grow rapidly. Also considering the potential adjustment of the tariff policies, will the European market or overseas expansion become a strategic priority for 2024 and what's our overseas sales target for this year? We also see that we have mentioned the Firefly Global expansion, so please share more details, including the timing or also region priority and also the pricing strategy. Yeah. [Foreign language] As mentioned, starting this year, we have started to change our global expansion strategy. Before, in Europe, we mainly relied on our own sales and service network via the direct sales model. Starting this year, we started to switch to look for local partners for each country. As I've mentioned, we have already partnered with more than 10 partners in more than 15 markets, and we are bringing more partners on board for more or for broader market entry. Regarding the overall global expansion and the strategy, we actually have a pretty long-term view for our international development. For the Firefly brand, it will be rolled out to several European countries as well as several other countries this year. Regarding the products from the ONVO and the NIO brands, depending on the demands of the markets, we will also see if there are good products for some countries and regions worldwide. Overall speaking, we do not have a very aggressive volume assumption or target for the global market because we mainly look at this from a very long-term perspective. Thank you, Xing Chang. The next question comes from Tina Hou with Goldman Sachs. Please go ahead. Thanks, management, for taking my questions. I have two questions. The first one is, as we are targeting to reach the more than 50,000 monthly volume at the fourth quarter of this year, how are we planning our production capacity? What kind of production capacity do we have now? What level will we reach by fourth quarter? Are we adding new lines or adding double shift to achieve that? [Foreign language] Thank you for the question. Our current production capacity will be enough to support our delivery assumptions for Q4 this year. We are preparing our third factory, and it will be put in operations starting September this year. For certain production lines in some factories, we also have the flexibility to arrange double shifts. In that case, production capacity will not be a problem for us. Thank you. My second question is regarding our working capital, our cash conversion cycle, because we have observed that both if we look at full year 2024 versus 2023, the account payable days, account receivable, as well as inventory days have actually gotten longer. If we look at 1Q 2025 versus 1Q 2024, these days also got longer on a year-over-year basis. Going forward, I think for the full year of 2025 and maybe longer term, how should we think about these cash conversion cycles? What is the optimal days for these working capitals? Thanks. [Foreign language] Thank you for the question. As you have mentioned, two key parameters: inventory level and also the account payable. Regarding the inventory level, as we see growing intensity in terms of the market competition, we are also switching our sales model from OTD, that's order to delivery model, to more inventory-based. In that case, this is also a better practice to cater to the demands of the consumers, where many of them would like to pick up their cars as soon as possible. As now we are switching to the inventory-based sales model, we also are seeing higher inventory levels regarding the vehicles as well as the production materials in comparison to the OTD mode. If we would like to continue to keep up the sales volume against the growing fierce competition, we will also see the growing level of the inventory, but we will have a very strict and tight control over the inventories of both vehicles and the materials. Basically, the reasonable inventory level of vehicles will be around one third to half of the monthly sales volume of each brand. [Foreign language] Regarding your second question on the second parameter on the account payable, actually the payment duration we set for our suppliers has always been the same, that's around 90 days. Due to the accounting and also financial releases quarter-over-quarter, there are certain fluctuations that are also mainly related to the use of the check for the payment. Within the 90-day payment duration, we normally will pay half in cash to our suppliers and another half in check. Depending on the supply of the goods and also the urgency of the supply or the types of suppliers, they will also have a variety of terms and conditions for the payment. Certain receive 100% payment only, 100% payment in check, and certain will only receive or allow for 100% payment in cash within 60 days. The payment terms and conditions also vary from supplier to supplier, but the overall duration is consistent. As we see growing sales volume, in that case, we will also see growth in the purchasing value of these commodities and goods from our suppliers multiplied by the volume and also the duration. We will also see the rising level with our account payable. Overall speaking, that's actually normal as it's relevant to the volume, the sales volume of the product. Thank you, Tina. Thank you. That's very clear. Thanks, William and Stanley. 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 our IR team through the contact information on the website. This concludes the conference call. You may now disconnect the line. Thank you.