Hello, ladies and gentlemen. Thank you for standing by for NIO's third quarter 2025 earnings conference call. At this time, all participants are in the listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Ray Chen, Head of Investor Relations and Corporate Finance of the company. Please go ahead, Ray. Good morning and good evening, everyone. Welcome to NIO's third 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 Chief Executive Officer, and Mr. Stanley Chu, 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 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 may include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to NIO's press release, which contains a reconciliation of unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr. William Li. William, please go ahead. [Foreign language] Hello everyone, and thank you for joining NIO's 2025 Q3 earnings call. [Foreign language] In Q3 2025, the company delivered 87,071 smart EVs, representing a year-over-year growth of 40.8%. [Foreign language] During the quarter, we launched two large three-row battery electric SUVs, the ONVO L90 and the NIO All-New ES8. Both models have received strong recognition from users for their comprehensive competitiveness and continue to see solid demand. In the meantime, Firefly continued to see steady market growth. By covering a broader range of price segments and meeting more diverse needs, the NIO, ONVO, and the Firefly brands are able to drive significant growth in deliveries. [Foreign language] In October, the company delivered 40,397 smart EVs, up 92.6% year-over-year, marking three consecutive months of record-high deliveries. For Q4, we expect total deliveries to be in the range of 120,000-125,000, a year-over-year increase of 60.1%-72%, achieving a new quarterly high. [Foreign language] On the financial front, thanks to the ongoing cost optimization, in Q3, the vehicle gross margin improved to 14.7%, and the gross margin of other sales was 7.8%, resulting in an overall gross margin of 13.9%, the highest in nearly three years. This reflects the company's strengthened product and service profitability. [Foreign language] Operational efficiency in R&D, sales, and general administration continued to improve. Non-GAAP operating loss was narrowed by 30% quarter-over-quarter. In Q3, the company's operating cash flow and free cash flow both turned positive. [Foreign language] NIO remains committed to a battery electric vehicle roadmap featuring chargeable, swappable, and upgradable batteries. Leveraging the company's full-stack R&D capabilities in 12 key tech areas, the three brands are able to precisely meet users' needs across multiple market segments, and the competitiveness of our new products under all three brands has been well received. [Foreign language] The NIO brand recently introduced three color themes for the ET9 Horizon Edition. The Horizon Edition is a special collection reserved for NIO's most prominent flagship models. The distinctive design, advanced technology, executive excellence, and exclusive services make the ET9 Horizon Edition a standout in the market. The All-New ES8, an all-around tech flagship SUV, was launched and started delivery at NIO Day in September. Leveraging the unrivaled space and driving experiences made possible by its all-electric technology, the All-New ES8 has remained a top seller in the premium large three-row SUV segment, surpassing 10,000 deliveries within just 41 days, the fastest for a BEV priced above RMB 400,000. In November, the ES6, another all-around SUV in NIO's lineup, celebrated its 300,000 unit delivery milestone, topping the sales chart of China's BEV models priced over RMB 300,000. [Foreign language] Within the ONVO brand, the L90 delivered over 33,000 units in three months since its launch in late July, leading the large battery electric SUV segment for three consecutive months. The L60 also delivered strong performance, maintaining a top two position in the battery electric SUV segment, with MSRP above RMB 200,000 during the first three quarters. With exceptional product experiences and word of mouth, the ONVO brand increasingly becomes the preferred choice for families. [Foreign language] Since delivery began, Firefly has led the high-end small EV market in sales volume, establishing itself as a benchmark in the market. With creative launches of special editions, it continues to strengthen its appeal among users who value quality and individuality. This dynamic small car is already making its way into global markets and will expand into more countries and regions across Europe and Asia. [Foreign language] In smart driving, the NIO World Model (NWM) is the first world model that not only understands and predicts the real world but also operates with a closed-loop training system. Actually, the industry trend is increasingly shifting toward a world model roadmap. Next, we will gradually roll out upgrades on NWM for vehicles equipped with NIO's NX9031 and NVIDIA's All-NX smart driving chips, further enhancing urban and highway NOP plus, parking, and smart safety performance. The upgrades will also enable execution of OpenCell commands. For the ONVO smart driving, the Coconut 2.1.0 scheduled for release at year-end will upgrade its model-based end-to-end solution for urban and highway NOA, as well as parking, delivering a more seamless driving experience. [Foreign language] Our sales and service network currently includes 172 NIO Houses, 395 NIO Spaces, 422 ONVO stores, as well as 405 service centers and 70 delivery centers. [Foreign language] Our global charging and swapping network now operates 3,641 power swap stations, providing users with more than 92 million swaps. Besides, NIO has built over 27,000 power chargers and destination chargers. [Foreign language] On September 17, NIO completed a total of $1.16 billion in equity financing on both the U.S. and Hong Kong stock exchanges, further strengthening its balance sheet and providing ample resources for its long-term commitments to R&D and user services. [Foreign language] On November 23, the 2025 NIO Cup Formula Student Electric China successfully concluded in Hefei. NIO has been supporting this competition since 2015, helping cultivate tens of thousands of young professionals for the industry. [Foreign language] Today also marks the company's 11th anniversary. Over the past 11 years, we have remained committed to in-house R&D in core smart EV technologies, continued investing in charging and swapping infrastructure, built a multi-brand sales and service system, and created a vibrant community for over 900,000 users to share joy and grow together. [Foreign language] These advantages have been increasingly recognized by our users. This year, our new products across three brands have performed strongly in their respective market segments, marking the beginning of a new phase of rapid growth. At the same time, through the sales business unit mechanism, we have comprehensively optimized our organization and enhanced operational efficiency, consistently improving our business results. [Foreign language] Rooted deep and growing beyond, looking ahead, we will continue to provide more competitive technology, products, and services to deliver better user experience and greater user value. As the company evolves into a user enterprise leading in technology and experience, we aim to shape a sustainable and brighter future with more users. [Foreign language] Thank you for your support. With that, I will now turn the call over to Stanley for Q3 financial details. Over to you, Stanley. Thank you, William. Let's now review our key financial results for the third quarter of 2025. Our total revenues reached RMB 21.8 billion, increased 16.7% year-over-year and 14.7% quarter-over-quarter. Vehicle sales were RMB 19.2 billion, up 15% year-over-year and 19% quarter-over-quarter. The year-over-year growth was mainly due to higher deliveries, partially offset by a lower average selling price from product mix changes. The quarter-over-quarter increase was mainly from higher deliveries. Other sales were RMB 6.2 billion, up 31.2% year-over-year and down 9.8% quarter-over-quarter. The year-over-year growth was driven by increased sales of used cars, technical R&D services, and sales of car accessories and after-sales vehicle services. While the quarter-over-quarter decrease was mainly due to the decrease in revenues from used cars, technical R&D services partially offset by the increase in parts accessories and after-sales vehicle services and provision of power solutions. Looking at margins, vehicle margin was 14.7%, compared with 13.1% in Q3 last year and 10.3% last quarter. The year-over-year and quarter-over-quarter increase were mainly due to the decreased material cost per unit, primarily driven by our comprehensive cost reduction efforts. Overall gross margin was 13.9% versus 10.7% in Q3 last year and 10% last quarter. The year-over-year increase mainly reflected higher vehicle margin and better profitability in sales of parts accessories and after-sales vehicle services, driven by cost reduction and efficiency improvements. The quarter-over-quarter increase was mainly attributable to higher vehicle margin. Turning to OPEX, R&D expenses were RMB 2.4 billion, decreased 28% year-over-year and 20.5% quarter-over-quarter. The decreases year-over-year and quarter-over-quarter were mainly driven by lower personnel costs in R&D functions due to organizational optimization and decreased design and development costs from different development stages. SG&A expenses were RMB 4.2 billion, up 1.8% year-over-year and 5.5% quarter-over-quarter. The year-over-year SG&A expenses stayed stable. The quarter-over-quarter increase was mainly driven by the increase in sales and marketing activities associated with new product launches. Loss from operations was RMB 3.5 billion, down 32.8% year-over-year and 28.3% quarter-over-quarter. Excluding share-based compensation expenses and organizational optimization charges, adjusted loss from operations was RMB 2.8 billion, representing a decrease of 39.5% year-over-year and 31.3% quarter-over-quarter. Net loss was RMB 3.5 billion, showing a decrease of 31.2% year-over-year and a decrease of 30.3% quarter-over-quarter. Excluding share-based compensation expenses and organizational optimization charges, adjusted net loss was RMB 2.7 billion, representing a decrease of 38% year-over-year and 33.7% quarter-over-quarter. Furthermore, we generated positive operating cash flow and positive free cash flow this quarter. Together with the $1.16 billion equity offering in September, we ended the quarter with RMB 36.7 billion in total cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits, laying a solid foundation for our future growth. That wraps up our prepared remarks. For more information and the details of our unaudited third quarter 2025 financial results, please refer to our earnings press release. Now I will turn the call over to the operator to start our Q&A session. Operator. 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 are on a speakerphone, please pick up the handset to ask a question. For the benefit of all the participants on today's call, please limit yourself to two questions. If you have additional questions, you can re-enter the queue. Our first question comes from the line of Tim Hsiao from Morgan Stanley. Please go ahead. Hi. Thanks for taking my question. This is Tim from Morgan Stanley. I have two questions. The first question is about the break-even target because we noticed that NIO's updated fourth quarter delivery guidance of 120,000-125,000 came in like around 20% lower than our previous target of 150,000. Just wondering if the revolving shortfall adversely affects the company's break-even target for fourth quarter. Considering the subseasonal demand and policy uncertainty, when could the company achieve previous monthly run rate of 50,000? That's my first question. [Foreign language] Thank you for the question. Actually, for the company, we still have the confidence in achieving quarterly break-even in Q4, and this is still our financial target towards the end of the year. In the meantime, we did see the impact coming from the phase-out and the termination of the trade-in and replacement subsidies since the middle of October. This is actually the challenge faced by the entire industry. In that case, in Q4 for the entire industry, we may not see the year-end sales spike that we normally expect towards the end of the year. As you are closely tracking the market and all the numbers, probably you have also foreseen that potential change towards the end of the year. In the meantime, as next year, the purchase tax exemptions on the new energy vehicles will be further reduced. For the new products like the ES8 with older backlogs that will continue towards the next year, car companies, including NIO, provide the guarantee for the purchasing tax exemptions to users waiting up for their cars next year. Yet no car company is going to provide the guarantee for the trade-in and replacement subsidy. In that case, the overall market demand has been affected because of the cancellation of the trade-in subsidy, especially for our company. Our ONVO L60 and the Almighty are majorly affected by this cancellation as they are of a relatively low-priced segment and are more sensitive to such changes. Yet we still have confidence in achieving Q4 break-even target. This is mainly because we do see a strong demand for our high-margin products like the all-new ES8. We still have an uncalled order backlog and also new order intake for that product. Overall speaking, the order intake on the Honda has been affected because of the cancellation of the trade-in subsidy, yet the overall impact on the gross profit is limited. In that case, we do have the confidence for the financial target. [Foreign language] In the meantime, in terms of the vehicle gross margin, in Q3 we have achieved a vehicle gross margin of 14.7%, better than we expected. In the meantime, we are also working with our supply chain partners on the continuous cost reduction and also commercial negotiation efforts towards Q4. With that, we foresee the vehicle gross margin in Q4 to be around 18%. For the ES8 in Q4, we also expect significant growth in sales and delivery volume with a very lucrative margin of over 20%. The overall gross profit for the entire company will be significantly improved from Q3. [Foreign language] In the meantime, we also see good financial performance of our non-car sales business, and we also expect such momentum to continue into Q4. We see improvement both in the sales revenue contributed by the non-vehicle business as well as the gross margin improvement of that part. With that, the gross profit, be it vehicle gross profit or the non-vehicle gross profit, we'll also see improvement from Q3 to Q4. [Foreign language] In terms of the expense and also cost control, since this year we've been taking a series of actions in improving our operational efficiency and also our expenses utilization, and we already see some good results from the Q3 financials. We will also continue such effort in Q4 in improving the SG&A expenses as well as the R&D expenses and their efficiency. Especially in Q4, we don't expect any major or high-profile marketing or campaigns. In that case, we will be controlling our expenses in Q4 with our SG&A as well as the R&D. [Foreign language] All sum up, our sales volume was affected by the phase-out of the trade-in and replacement subsidy, yet the gross profit is not majorly affected. In the meantime, we will continue our efforts in improving the efficiency and utilization of our investment and expenses. In that case, we expect also improved business results from Q4 and also have the confidence in achieving the quarterly break-even target. Thank you, Tim. Thank you so much, William, for all the details. My second question is about our volume targets together with the new model schedule. I think back to previous quarters, the management mentioned that we target like 50,000 monthly run rate in fourth quarter. If we are not going to achieve that, when can we achieve 50,000 monthly sales? Considering all the macro uncertainties, we need to consider moving up the launch schedule of the new models to first quarter or earlier to bolster the sales momentum into next year. That's my second question. Thank you. [Foreign language] Thank you for the question. As also previously mentioned in my remark, the guidance we provide for Q4 is 120,000-125,000 units. In terms of the adjustment on the guidance, as also explained, it's mainly because of the impact on the phase-out of the trade-in and replacement subsidy. With that, we will not be able to see the year-end sales spike driven by the seasonality towards the end of the year. Especially, this will affect the sales of our cars that have already experienced their new car hype stage. This is also the challenge faced by the entire industry. Based on our current product lineup and also launch cadence, we do expect that sometime next year, in the first half of next year, we will achieve 50,000 monthly delivery. This is based on the consideration that we will be launching three large models next year and also based on the continuous improvement in our sales capacity and also our sales and marketing efficiency. We do see the opportunity of achieving more than 50,000 units per month somewhere first half of next year. In the meantime, we will also not just randomly change our new car launch cadence or plan simply because of short-term or temporary policy changes or impact. We will still keep our original launch cadence. That is to launch two new models in Q2 next year and one new model Q3 next year. Thanks. Thank Thank you, William and Stan. Looking forward to the first break-even quarter and more to come. Thank you. Thank you, Tim. 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 2026 outlook. Given there would be 5% of the purchase tax being levied on the EVs, how should we think about the company's preparation for such a policy change? Should we compensate for the customers for this amount and adjust it along the supply chain and internal cost control, or do we expect to let the consumers take the majority of their earnings? This is my first question. [Foreign language] Thank you for the question. As next year, the purchasing tax on the new energy vehicles will be halved. Actually, the impact on us is less major in comparison to other new energy vehicle models and also companies. As 80%-90% of our users choose to buy the car while subscribing to the battery, in that case, the price of the battery is excluded from the tax base. In that case, our tax exemption is still more advantageous than other companies and also non-swappable models. In the meantime, for the popular products like the all-new ES8 with a very long waiting time for the deliveries and pickup, we are also the first car company to announce the purchasing tax guarantee for our users who have to pick up their cars next year. We have made this purchasing tax guarantee already at the launch of the ES8. For other products and models, as their waiting time is not as long as the all-new ES8, so far we don't have the guarantee policy for other models. As for the specific measures that we are going to take in the face of the purchasing tax changes next year, it highly depends on the dynamics of the market, the landscape of the competition, and also the practices of other peers. We will keep flexibility in our measures and also policies. Currently, we don't have a very specific plan. [Foreign language] In the meantime, we also see that the entire industry, including the public and users, are gradually digesting the phase-out of the purchasing tax policies on the new energy vehicles. Especially right now, if you look at the smart EV industry in China, it is now less policy-driven as the actual user experience and also the cost advantage of battery electric vehicles are more evident and also becoming more attractive to the users. In the first 10 months of this year, the sales volume growth of the BEV actually increased significantly. This also gave us the confidence in continuing such momentum. There will be impact from the purchasing tax phase-out, but it will be very limited. Thanks. My second question is regarding the expense control. We have already seen quite some cost reduction, especially from the R&D in Q3. Per your guidance, Q4 should see further efficiency improvement there. Heading into 2026, should we expect the lower cost structure on the expense side to stay as a constant and new normal? I.e., should we expect like low RMB 2 billion something for the R&D per quarter and around RMB 4 billion or even lower than RMB 4 billion on the SG&A per quarter? quarters can support our company's competitiveness in models and key technology areas. Thank you for the question. As mentioned, in Q3, our R&D expenses is around RMB 2 billion on the non-GAAP basis. Also for Q4 and the next year, we expect our quarterly R&D expenses to be flat, also around RMB 2 billion per quarter. So far, we do not have any plan to dial back on the R&D expenses. In the meantime, we will focus more on improving the efficiency of our R&D activities, especially leveraging our sole business unit mechanism. We will make full use of the output of this RMB 2 billion R&D investment every quarter. Inside the company for the project initiation and approval, we have established the ROI evaluation mechanism. We also have the closed loop with the project review and also improvement. By continuing such efforts, we believe that at RMB 2 billion per quarter in R&D, we will be maintaining our existing product development as well as the key technology development without compromising on the competitiveness of the entire company. [Foreign language] In terms of the SG&A expenses and its percentage to the sales revenue, as in Q4, based on the sales volume guidance, we have lowered our volume from 50,000 units per month to we have lowered from that base. In that case, originally our target is to achieve 10% ratio between SG&A and the sales revenue, and now it's around 12%. In Q4, we will also be keeping that level. This is against the overall background of achieving the quarterly breaking even in Q4. In terms of the absolute amount, that's around RMB 4 billion per quarter, as you mentioned. Next year, we will focus on improving our efficiency in sales and also overall activities. Overall, we believe that 10% between SG&A to the total sales revenue should be a reasonable target for us to achieve. Thank you, Paul. Thank you, William and Stanley. Looking forward for more efficient operation going forward. Thank you. Your next question comes from Nick Lai with JP Morgan. Please go ahead. Yes, this is Nick from JPMorgan. Thank you for taking my question. The first question is actually question. Sorry to interrupt. Can you? I'm really sorry to interrupt, Nick. Your line is not that clear. Okay. Is it better right now? Hi, Nick. Go ahead. Yeah, Nick, go ahead, please. Okay. Can you hear me right now? Yeah. Thank you. My first question is really about the possibility into second into 2026. Based on what William's comment earlier, Yahoo Farm's second quarter will next year, we have a three-new model, and monthly sales likely hitting 50,000 units. Stanley also mentioned that expense ratio or expense should be content. With all this comment, is it fair to say that asset on four- 25 break even? Next year for the full year or at least in second half next year, likely means possibility should also be very strong. That's my first question. I.e., how should we think about the possibility in 2026? this year, BEV in the market above RMB 300,000 increased by 33% year-over-year. Range-extended actually declined by 10% year-over-year. Looking at the large three-row SUV market where both NIO and ONVO are present, pure electric sales in September ranked first for the first time, and in October continued to be first. In October, the upper limit number for pure electric large three-row SUVs exceeded 39,000, while range-extended was only 24,000. Maybe translate this first. Thank you for the question. Actually, for the full year, our business target is to achieve profit for the full year 2026 on the non-GAAP basis. We do see confidence in achieving this profitability target for next year non-GAAP, as we basically look at this from both market trend perspective as well as the relative competitiveness of our product and services. Here are some insights into the market and the trends over the past one year or so. We will be mainly looking at the penetration rate of the battery electric vehicle in the premium segment and also more specifically in the large three-row SUV market. In Q3, the sales volume of BEV increased by 26% quarter-over-quarter, while for REEV and PHEV, the sales volume only increased by 12% and 7%. Actually, decreased by 12% and 7% quarter-over-quarter. If we look at the entire new energy vehicle market, the penetration rate has reached 55% in Q3. This is majorly powered by the growth in the battery electric vehicle. In the first three quarters, the sales volume of BEV has increased by 33%, while for REEV, it's only 3%. More specifically, in October, the BEV sales volume increased by 13%, while for the REEV, it decreased by 13%. This is also showing how well received and adopted the BEV model is. More specifically, on the premium segment, priced above RMB 300,000, this is where our new brand and our products are in. For the BEV, it used to be at a relatively low penetration rate, but we do see a trend of improving that penetration. This also gives a huge opportunity for enlarging our penetration and market share in that segment. For this year, especially, we see the trend where the premium battery electric vehicle products are more and more received by the users. We have already seen the awareness and also the upside for such products. This has powered the increase in the penetration rate of this product. For last year, the penetration rate of the battery electric vehicle in the premium segment was only 12%, but in Q3 this year, it's already 18%. In the first three quarters, the penetration rate of BEV has increased by 33%, yet for the range extended vehicles, it actually decreased by 10%. More specifically, for the large three-row SUV segment, the sales volume of BEV took the first place for the first time in September, and it continued such momentum in October. In October, we see the total volume of BEV registration was around 39,000 units, while for REEV, that was only 24,000 units. [Foreign language] Regarding the sales volume and also for next year, as for the all-new L90 and also the new all-new ES8, next year we will still continue the buzz around these two products relatively new to the market. Plus, we are going to introduce another three new large models. We will be having five new large models available to the market next year from the new and all-new brand. If we look at the mid to large and also the large SUV segments where our new models will be targeting, in Q3, the sales volume of BEV models increased by 146%, while for REEV, it's only 19%. As I've mentioned, the overall penetration rate of BEV among the premium large vehicle models is still relatively low, which means that we do have huge opportunities and potential in this segment. Overall speaking, our product launch cadence is in line with the market shift and also the trend, especially considering our large models are also competitive in both products as well as the charging and swapping experience. [Foreign language] For these five large models, they will also contribute the major sales volume among all of our products. As they are high margin products, they will also contribute more significantly to the vehicle gross margin. With that, next year we expect the vehicle gross margin to be around 20%. That is the further improvement on top of our existing gross margin for Q3 and also outlook for Q4. This result will be dependent also on the continuous cost optimization efforts together with our supply chain partners. In terms of the expenses, as we have rolled out this sale business unit mechanism, we have tightened our control over expenses. We already see some good results, and we will continue such efforts next year in controlling the R&D and also SG&A expenses. For our large vehicle models, based on its strong market performance and demand, it already proves that with the right product definition and with our unique advantages in battery swap, we do can capture a decent market share in that segment. In the meantime, we also see a positive trend and huge potential for the battery electric vehicles to take up a higher market share and penetration among large models and premium models. Thirdly, we have confidence in achieving the product gross margin of 20%, plus our continuous efforts on the cost and expenses control. With all that combined, we think that achieving full year profitability on the non-GAAP basis for the year of 2026 is a reasonable target for the team. Thank you, Ning. Thank you for the answer. Certainly, an exciting outcome for next year. My second question is more about the choice between in-house chip against NVIDIA. Can you remind us what is our long-term strategy between in-sourcing and out-sourcing, and what is the pros and cons between these two strategies? [Foreign language] Thank you for the question. Our NX9031 is the first smart driving chip made also 5 nanometer process, and its tape-out mass production application on the car and also full stack operations were all earlier than the competitors of the similar performance in the industry. We also see how this in-house developed chip is contributing to both performance improvement as well as the cost structure optimization. For the long term, we will continue our investments and also efforts in the chip-related technologies. In the meantime, maybe you have also noticed that recently we have announced a partnership where we are going to share our chip solution and the technologies to more industry players, both from the automotive industry as well as from the non-automotive industry, as we do see a good potential of applying this high computing power reasoning chip on different types of devices, for example, on robots. We will work with our tech partners together to explore more use cases and also application scenarios of our chip. Thank you. Very clear. Thank you. Thank you, Nick. Thank you. Your next question comes from Ben Wang from Deutsche Bank. Please go ahead. Thank you. The first question is about the margin in the third quarter. It clearly has a big margin jump by 4.4%, but it just explains because of cost reduction is not just enough. You say because of the mix because L90 has been volume contribution more than 20,000 units. Can you break down about the margin driver? How much came from the margin from the all-new L90? How much from the cost reduction? Really, cost reduction was the key item you actually got a cost job in the number three quarter. Thank you. can look at it offline later. This is roughly the composition. Thank you for the question. As you've mentioned, our vehicle gross margin result in Q3 and the improvement from the previous quarter is majorly driven by two factors. The first is the cost reduction contributed by the supply chain driven by the increase in our sales volume. The second factor is the sales and delivery of the L90, which is a high margin product that we have started to deliver from Q3. In comparison to Q2, we have delivered more than 20,000 L90, contributing better margin performance than the L60 in the previous quarters. These are two major drivers of the gross margin improvement in Q3. As for the specific breakdowns, I will also share more information offline with you. [Foreign language] Here I can share with you some of the vehicle margin performance model by model. For the new ES8, as mentioned by William, the vehicle margin is 20%. Of course, we did not start the delivery of ES8 until late Q3, so its actual contribution in the volume side is relatively small. For the ET5, ET5T, their vehicle gross margin is between 15%-20%. For ES6 and EC6, their vehicle gross margin is over 20% and even reaching 25%. As these are already products being in the market for a while, we have already worn off the new car bust on these models. For the L90, its vehicle margin is around 15%-20%. Overall speaking, for the new models plus the all-new L90, they do have a pretty good vehicle margin performance. Thank you. My second question about your latest chip joint venture with Accelra. This is maybe major shareholder with 36.4% stake in the company. My question is number one, why are you choosing this partner, Accelra, from Chongqing? Why not somebody else? Secondly, what's the business model about this joint venture? Is it just a sales company? Actually, you really made a joint venture to make a chip by themselves. Meanwhile, do you actually get any license fee ink already from this joint venture? Because this seems to be with Saleo Chips. Thank you. [Foreign Language] Thank you for the question. Yes, some media has covered the establishment of this chip joint venture. We are leveraging our partners of this joint venture to sell our chip and our IC design capabilities to other clients and potential users. This is not an exclusive partnership. We still have the possibility and the opportunities to sell our chip solution and product to other partners and companies from our side. That is one part of the way to sell that solution. We can also leverage our partners' resources to provide our chip solution to other car companies or other clients, and they will be acting as a Tier 1 providing such a solution. In the meantime, as mentioned, we also see opportunities of applying such chip in the non-automotive industry. That is also a pretty common practice for the car companies to share their technologies across different industries. For our partners, they do have mature experience and also skills in the industry, in the chip design industry. They also have their own client and also network connections. They also have some chip products that can be complemented to our chip across different scenarios. Overall speaking, we believe that this is a win-win partnership. Thank you, Longby. Thank you. Your next question comes from Jeff with Citi. Please go ahead. Hi, this is Jeff from Citi. My first question is on the 4Q ASP. It looks like the RMB 34 billion revenue guidance should match with vehicle ASP up 12% Q1Q at RMB 246,000. If the GV margin reaches 18%, that is around RMB 6 billion gross profit, right? This is my first question. My second question is the first quarter because we recognize the 4Q guidance suggests a revenue up 56% Q1Q, right? The GV margin reached 18%. Having said that, entering into the first quarter next year, our volume is not going to drop back to the third quarter level, right? Secondly, it looks like our high margin products at Q1Q volume into the first quarter is going to be stable. Therefore, the product mix should further improve into 1Q on a Q1Q basis. My second question is, would the first quarter vehicle margin also stay closer to the 18% level? Because the high margin products contribute more to the mix. Thank you. Hi, Jeff. [Foreign language] Thank you for the question. Regarding the average selling price, it will increase in Q4. This is mainly driven by the sales of the high margin products, the ES8. As for the full year, our volume guidance for the ES8 is around 40,000 units, and most of this sales will be happening in Q4. It is also contributing to the improvement of the average selling price from Q3 to Q4. Regarding your second question on the gross margin outlook for Q1 next year, normally Q1 is a low season of the automotive industry. Overall speaking, the sales volume in Q1 will not be as good or as high as we normally expect for Q3 and Q4 in the previous years. [Foreign language] As also mentioned, in Q4 this year, we may not see the common sales spikes fueled by the seasonality. In that case, even if we are going to encounter the low season Q1 next year, the actual impact or the decrease from Q4 this year to Q1 next year will not be that significant in comparison to the previous years. Not to mention that we also have the ES8 order backlog that will last on to the next year. This will also help to offset the seasonality impact in Q1 next year. Overall speaking, our operations and also volume forecast for Q1 next year will not be as good as in Q4 this year, but will also not be as low as in Q1 this year. Overall speaking, the vehicle gross margin falls into the same trend. It will be lower than the margin outlook we have for Q4 this year, but will be better than Q1 last year. Thank you, Jeff. Thank you. Thank you. Your next question comes from Ming Hsun Lee with Bank of America. Please go ahead. Hello, William. This is Ming. My first question is regarding your overseas plan because I think in the past few years you have built several sales channels in Europe. Could you give us more of your strategy for overseas expansion for the next few years? Thank you. That is my first question. ONVO will enter after the product is ready, and finally NIO. So this order will be reversed. Thank you for the question. We entered into Europe in 2021, and from 2021 to 2024 in the past several years, we've been doing direct-to-customers or direct-to-users, the direct selling model for the European markets. Yet in the meantime, with all the external factors such as the tariff in the EU, we also started to realize that for a broader market entrance, we do need to rely on and leverage more on the partners' support and resources. That is why starting this year, we have started to look for local partners for our market entry. Right now, we already have identified high-quality partners in more than 10 countries and regions. The Firefly will be the first brand where we introduce to the overseas markets, leveraging our partners' resources and the network. The product will become available not only in Europe, Asia, but also in the Middle East and also South America. Overall speaking, for the global market expansion, we are switching our business model from the direct selling business model to a more partnership-based and also local partners-supported business model. Also, for the Firefly and its product, it's actually a very good product suitable for broader markets, and its European version and right-hand drive version are already developed, ready for the global market entry. We do have confidence in the global expansion of the Firefly product. In the meantime, we are also developing the ONVO product for the global markets. It is also a brand with a reasonable price range and product lineup for the global market expansion. As for the new brand, as it targets the premium segment, it does take patience and time to establish brand awareness on the new product. In that case, we are also more patient and also more long-term for the global market expansion of the new brand. Overall speaking, in China, we started with the new brand, the premium one, and then we have the ONVO brand and the Firefly. For the global market expansion, we will take the opposite way where we will start with the Firefly. When ONVO has the product ready for the global markets, we will then push out ONVO and then NIO. Thank you, William. My second question is regarding the expansion of more mass market opportunity. Since ONVO is very successful in L90 and also recently your L60, volume sales also continue to grow. In the future, do you expect to launch more products under the ONVO brand and to have more business opportunity for the segment at RMB 200,000 or even below? Yeah, thank you. [Foreign language] Thank you for the question. For the ONVO brand, it is defined as a family-oriented brand for the mass market. Just like Toyota and Volkswagen, for the long term, we do need to create a wide and broad product bandwidth to cater to more needs and also to cover more press and market segments. For the long term, for the ONVO brand, our price bandwidth will be ranging from RMB 100,000-300,000. Within that range, we are going to offer more diverse products and also options for our users to choose from. We started with L60, priced around RMB 200,000. For the L90, the fully loaded one has a price point of around or close to RMB 300,000. The next year for the L80, it will also be between RMB 200,000-300,000. That is already a price segment captured by the existing three products. In the meantime, we are also developing a new product platform where we are targeting the price range below RMB 200,000. We believe that with this diversified product and price lineup, plus a more mature power swap network, we are able to achieve a reasonable market share in the price range from RMB 100,000-RMB 300,000. This is also the single largest price segment and the market in China's passenger vehicle market with a total volume of 15 million. In such a large market, there is no reason for us to not launch enough products to capture a sufficient market share. Thank you, William. That's all my questions. Thank you. Thank you. Your next question comes from Jim Chang with CICC. Please go ahead. Hi. Thank you for taking my question. I have only one question, a follow-up question in regards to the R&D expense. We have already seen our R&D expense in third quarter further decrease a lot to our previously guided level. The industry is increasing investment in intelligence and also AI-related other areas. How do we allocate our limited R&D expense and how we balance the short-term R&D efficiency and also long-term R&D goals? [Foreign language] Thank you for the question. Actually, this year, our major focus in the R&D activities is to improve the efficiency and also to identify the priority of different R&D activities and the projects. In that regard, the CBU mechanism has played a very important role in helping to make full use of the R&D investment and expenses. In the meantime, we will also make sure that we will not lose our long-term competitiveness, as that is a baseline that we will not cross. With the CBU, we actually are pleased to see that even if we are doubling back on the R&D expenses in the recent quarters, yet we still maintained the R&D capabilities and competitiveness in the 12 full-stack capabilities for the smart EV. We are also confident to continue that competitiveness. In the past several years, we've made major investments in developing the fundamental technologies for the core EV products, including our chips, operating systems, intelligent chassis, and also 900-volt high-voltage architecture. As the foundation is already laid for the future products and the technology platforms, the follow-up iterations won't be as costly as developing the foundation and also the fundamental technologies, as the future iterations will also get more efficient in utilizing limited R&D resources. [Foreign language] Also regarding the AI technology and its applications like the smart driving and also our AI companion Nomi, as well as the internal management and efficiency tools, we will continue our R&D intensity and also efforts, but we'll achieve that in a more efficient way. In terms of using algorithms and the data, we actually have identified some good practices and approaches that can be more efficient than simply putting up investments or resources for the sake of achieving high computing power or data performance. We have identified some approaches with higher return on the investment. Actually, in the AI industry, the success of DeepSeek has also proven that you do not need to make a costly investment into developing a good large language model performance. It is the same practice for us. Not to mention that we can also leverage our collective artificial intelligence equipped on all the vehicles and also our data closed loop. With that, to achieve the same level of computing performance, we actually do not need to use that much computing power as our competitors or other peers are doing. Overall speaking, in terms of the R&D, we have been putting more focus on the return on investment evaluation, as well as doing a better priority for our R&D activities. Yes, thank you. Good, thank you. Yeah, thank you. Thank you. Your next question comes from the line of Yuqian Ding with HSBC. Please go ahead. Thanks, Ding. I got two questions. First one is, could you share the cost benefit when we hit the volume threshold? The current run rate is 500,000 now, and it's only going to get higher next year. What benefit can we get, let's say, battery and other critical components that have high weight in the BOM structure? [Foreign language] Thank you for the question. As mentioned, when the sales volume reach a certain level of scale, we will actually see how the economy of scale is contributing to the improvement in the financial performance, and it's mainly contributed where it's mainly from two perspectives. The first is regarding stronger bargaining power along the supply chain. This can also help improve the vehicle cost structure as you already see in our Q3 and Q4 vehicle margin guidance. For the next year, we don't have a clear picture regarding how much it will be contributed by the economy of scale from the supply side. Yet, as mentioned by William, our gross margin target for next year is 20%. That will actually partially be driven by the economy of scale on the supply side. The second is regarding the improvement in the manufacturing efficiency and also cost optimization driven by the manufacturing. As we improve our sales volume, the overall amortized manufacturing cost per unit will be gradually optimized. That will also contribute to the improvement in the cost structure of our products. Thank you, Stanley. The second question is regarding next year's new model. Could you help us to put in context the potential higher scale and also the mixed impact? We talked about the bigger vehicle has better margin, but we also talked about the ONVO L90 still 15%-20%. L80 will be below L90 in terms of the pricing, presumably. Will there be dilution or joint ONVO scale outweigh that? level compared to lower-priced models should still have a relatively good gross margin level, which will help us achieve an overall 20% gross margin next year. Thank you for the question. As mentioned, the three new large SUV models that we're going to introduce next year, they are all positioned at the higher end of the price spectrum of their respective segment. We haven't finalized the prices for these new models yet, yet we already expect more significant margin contribution by these three models. Not to mention that these three large models, they are further synergized with the current all-new ES8 and L90 from the cost structure. This year and next year for the cost optimization and the cost saving opportunities that we've identified on the ES8 and L90 can also be carried over to these three new models. With five large models combined, we expect them to contribute to the good product performance as well as on the margin levels, overall speaking, achieving 20% of vehicle margin. Thank you. [Foreign language] 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 any further questions, please feel free to contact our investor relations team through the contact information on the website. This concludes the conference call. You may now disconnect your line. Thank you.