Hello, ladies and gentlemen. Thank you for standing by for NIO Incorporated's first quarter 2026 earnings conference call. At this time, all participants are in a 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 and Corporate Finance of the company. Please go ahead, Rui. Good morning, and good evening, everyone. Welcome to NIO's first quarter 2026 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 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 the 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 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. [Non-English content] Hello, everyone, and thank you for joining NIO Inc.'s 2026 Q1 earnings call. [Non-English content] In Q1 2026, the company delivered a total of 83,465 smart EVs, representing a year-over-year increase of 98.3%. Breaking it down by brand, the NIO brand delivered 58,543 vehicles, maintaining its leadership in China's BEV segment priced above RMB 300,000. The ONVO brand delivered 13,339 vehicles, continuing to unlock its growth potential. The Firefly brand delivered 11,583 vehicles, ranking number one in China's high-end small car segment. [Non-English content] In April, the company delivered 29,356 vehicles, up 22.8% year-over-year. Starting Q2, the three brands have entered an intensive product launch and delivery cycle, which is expected to support continued rapid delivery growth. We expect the total deliveries in Q2 to range between 11,000 and 11,500 units, representing year-over-year growth of 52.7%-59.6%. [Non-English content] On the financial side, the company's gross margin was 19% in Q1. Driven by a higher contribution from higher margin products, vehicle margin came in at 18.8%, improving quarter-over-quarter for the fourth consecutive quarter. Margin for other sales, mainly services and community-related businesses, reached 20.6%, the highest level in the past four years, with both business scale and profitability achieving improvement. [Non-English content] In Q1, the company maintained positive non-GAAP operating profit and positive operating cash flow, where cash reserves further increased to RMB 48.2 billion. [Non-English content] NIO has remained committed to the BEV roadmap while continuously strengthening its systemic innovation capabilities. Over the years, the company has built distinctive competitiveness across technology, products, services, and user community operations. Supported by these capabilities, the products and overall experiences of NIO, ONVO and the Firefly have gained broad recognition among their respective target users. [Non-English content] For the NIO brand, since delivery began in late September 2025, the all-new ES8 reached its 100,000th delivery milestone in just 215 days, setting a new delivery record among passenger vehicles priced above RMB 400,000 in China. As of April this year, the all-new ES8 had remained number one in both the large SUV segment and the passenger vehicle segment priced above RMB 400,000 for five consecutive months, regardless of powertrain type. In early April, the 2026 ES6, EC6, ET5 and ET5T were launched and delivered, further addressing evolving user needs through enhanced product offerings. On April 9, we officially unveiled the NIO ES9, our flagship executive SUV. The ES9 integrates multiple industry first technologies and class leading features, redefining the standards of executive flagship SUVs and leading the segment into the BEV era. The ES9 will officially launch and begin deliveries on May 27, and we are confident that the ES9 will set a new benchmark in the flagship executive SUV market, priced above RMB 500,000. [Non-English content] For the ONVO brand, the L90 continued its strong market momentum in Q1 2026, ranking number one in the large SUV segment priced between RMB 200,000 and RMB 300,000. This year, ONVO will achieve comprehensive upgrades in both products as well as core technologies. The 2026 L90 has already been officially launched and delivered. The upgraded L90 now features NIO's in-house developed NX9031 smart driving chip, NIO World Model, and the SkyOS full-domain operating system. On May 15, the ONVO L80, a flagship large five-seat SUV with an innovative frunk and trunk layout, was officially launched and delivered. The L80 is a breakthrough product in the large five-seat SUV market, and currently offers the largest cargo capacity among five-seat SUVs in China. Through innovative space and scenario based lifestyle solutions, the L80 supports a wide range of scenarios for large five-seat SUV users. The new L60 will make its debut in late May. The updated model will feature upgrades in exterior design and smart features, further enhancing its competitiveness. [Non-English content] For the Firefly brand, the refreshed model has already started deliveries in Q2, bringing comprehensive upgrades in powertrain performance and smart experiences. Going forward, Firefly will continue to introduce limited edition models to further strengthen its distinctive brand identity. [Non-English content] On smart driving: earlier this year, we officially rolled out a major new version of NIO World Model, or NWM. Powered by the advanced architecture featuring the World model and closed-loop reinforcement learning, the new version significantly enhanced the full-scenario Navigate on Pilot experience. Within one quarter of the rollout, urban NOP mileage increased by 92% quarter-over-quarter, while the proportion of smart driving usage time increased by 116%. So far, the smart driving system powered by NWM has been introduced across all NIO products. In June, both NIO and ONVO users will receive the next major NWM upgrade, bringing noticeable improvements across driving, parking, and active safety scenarios. [Non-English content] In terms of sales and service networks, the company now operates 168 NIO Houses, 389 NIO Spaces, 430 ONVO stores, as well as 408 service centers and 90 delivery centers. We continue to optimize our sales and service network layout through the highly coordinated Sky Store model, expanding market coverage while strengthening local presence and increasing network density. [Non-English content] As of now, the company has 3,916 Power Swap Stations worldwide, along with more than 28,000 Power Charger and destination charging. On May 10th, the NIO ES9 successfully completed the 10,000 km challenge in just 94 hours, 19 minutes and 11 seconds, setting a new record among BEVs in China. This further demonstrated the reliability, efficiency, and convenience of battery swap. [Non-English content] On May 20th, the company released its 2025 Environmental, Social and Governance report and announced its greenhouse gas emissions reduction target, aiming to reduce the carbon footprint per vehicle by 43% by 2035 from the 2023 baseline. By delivering the high performance smart EVs and exceptional user experiences, we aim to build a sustainable and brighter future together with our users and partners. [Non-English content] After 11 years of long-term investment and persistence, the company has built whole full stack technology capabilities around the core technologies of smart EVs. At the same time, we have gradually established a systemic innovation capability spanning R&D, supply chain, manufacturing, quality, power services and user services. These capabilities not only enable us to continuously launch innovative products and lead industry development, but also serve as the core foundation for our continued brand development and long term competitiveness. Today, NIO, ONVO and Firefly have each established clear market positioning with their core products steadily increasing market share in their respective segments. We are confident in achieving our business targets for the year and delivering sustainable growth beyond 2026. [Non-English content] Thank you for your support. With that, I will now turn the call over to Stanley for Q1 financial details. Over to you, Stanley. Thank you, William. Let's now review our key financial results for the first quarter of 2026. Our total revenues reached RMB 25.5 billion, up 112.2% year-over-year, and down 26.3% quarter-over-quarter. Vehicle sales were RMB 22.8 billion, up 129.2% year-over-year, and down 27.9% quarter-over-quarter. The year-over-year growth was mainly due to increased deliveries and a higher average selling price, driven by positive product mix effect. The quarter-over-quarter decrease was mainly due to fewer deliveries. Other sales were RMB 2.7 billion, up 31.2% year-over-year, and down 9.7% quarter-over-quarter. The year-over-year growth was driven by increased sales of parts, accessories, and after-sales vehicle services, and provision of power solutions, along with a rise in sales of auto financing services. The quarter-over-quarter decrease was due to decreasing revenues from technical R&D services and used car sales. Looking at margins, vehicle margin was 18.8% compared with 10.2% in Q1 last year and 18.1% last quarter. The year-over-year and quarter-over-quarter improvements were driven by a more favorable product mix. Other sales margin reached a record high of 20.6% in recent four years, reflecting the continuing profitability improvements in our user-based driven service and community-related businesses. With the improvements in both vehicle and other sales margin, overall gross margin increased to 19%, compared with 7.6% in Q1 last year and 17.5% last quarter. Turning to OpEx. R&D expenses were RMB 1.9 billion, decreased 40.7% year-over-year and 7% quarter-over-quarter. The year-over-year decrease was mainly driven by lower personnel costs in R&D functions due to organizational optimization, reduced design and development costs from different development stages, and improved operational efficiency. The quarter-over-quarter decrease was also mainly due to lower design and development costs from different development stages and improved operational efficiencies. SG&A expenses were RMB 3.5 billion, decreased 20.5% year-over-year and 1.1% quarter-over-quarter. The year-over-year decrease was mainly driven by lower personnel costs and related expenses in marketing and other supporting functions due to organizational optimization, as well as reduced sales and marketing activities. The quarter-over-quarter SG&A expenses stayed stable. Loss from operations was RMB 0.3 billion, compared with loss from operations of RMB 6.4 billion in Q1 last year, and profit from operations of RMB 0.8 billion last quarter. Excluding share-based compensation expenses, adjusted profit from operations was RMB 66.8 million. Net loss was RMB 0.3 billion, compared with net loss of RMB 6.8 billion in Q1 last year and net profit of RMB 0.3 billion last quarter. Excluding share-based compensation expenses, adjusted net profit was RMB 43.5 million. Furthermore, we generated positive operating cash flow this quarter and ended the quarter with RMB 48.2 billion in total cash and cash equivalents, with restricted cash, short-term investments, and long-term time deposits. That wraps up our prepared remarks. For more information and the details of our unaudited first quarter 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, please. 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 your question. For the benefit of all participants on today's call, please limit yourself to two questions, and if you have additional questions, you can re-enter the queue. The first question today comes from Bin Wang with Deutsche Bank. Please go ahead. Thank you. Congratulations for the great result. I got two questions. The first one is about ES9. ES9 will launch next week. Can you share with the color for the order flow during the pre-sale period? Do you think the ES9 monthly volume in the next several months, what's the roughly monthly volume guidance? Can ES9 impact the ES8 order flow? That's my first question. Second question is about the gross margin. Can you provide a second quarter gross margin guidance given you have a better volume? Based on the cost increase such as memory. How to look for the gross margin in the next several quarters? Thank you. [Non-English content] Thank you for the question. Regarding your question on the ES9, we will officially launch and deliver the new ES9 on May 27th. Since the pre-launch of the ES9, its technology as well as its exterior and interior design are well recognized and well received by the market and our users. We started the test drive of ES9 from May 11th, and after the test drive, we also witnessed the growing momentum of the order intake on the model. [Non-English content] Of course, for us, we seldom disclose the specific order momentum or order intake for the new models. However, we do have confidence in its overall performance in the executive flagship SUV segment above RMB 500,000 in China, and we also believe that it is going to change the landscape of the battery electric vehicle segment above RMB 500,000. Overall speaking, we are confident in its competitiveness. [Non-English content] Since the pre-launch of the ES9, we actually didn't see that the launch of the ES9 diluting or cannibalizing the focus or even the attention to the ES8. Instead, it is generating positive impact on the attention and the order intake of the ES8. Especially after we had the pre-launch and also test drive started for the ES9, we have welcomed a lot of in store visits and traffic. Many of them maybe didn't know about the new brand or our products, and after they were in the store by experiencing and comparing between the ES9 and the ES8, some of them find that the dimensions and also the use cases of the ES9 may be a better match for them. In that case, we have actually witnessed an increase in the order intake of the ES8 after the pre-launch of the ES9. One week after the ES9 launch, actually the order intake for the ES8 increased by 30%. Since the test drive started from May 11th, within one week, the week-over-week ES8 order intake increased by 30%. [Non-English content] In the first 20 days of May, actually the order intake on the ES8 has created a new history high since October, which is the ES8 launch last year. As we have been digesting the order backlogs on the ES8, we have also maintained a pretty stable and strong order intake on the ES8 without compromising on the strong order intake for the ES9. By having this strong order performance for both models, we can see the positioning of these two products are quite distinguished or differentiated from each other. ES9 is more of a flagship executive SUV, while it is more competing with the conventional combustion engine executive flagship SUVs like BMW X7 or Mercedes GLS. For the ES8, it is more of an all-around SUV that is catering both business scenarios as well as family purposes. These two products are complementing each other, while price-wise, they are well differentiated. We are happy to see that both products are well received in their respective segments. [Non-English content] Thank you for the question. Regarding your question on the gross margin, in Q1, we have achieved the vehicle margin of 18.8%, achieving quite good increments from both year-over-year as well as quarter-over-quarter. In Q1, the increase in the vehicle margin is mainly because of the higher contribution by the higher margin models, especially the ES8 contributing 50% of the margin, where ES8 itself has over 20% vehicle margin in Q1. In the meantime, although there are rising cost pressure because of the rising material costs, however, our advanced inventories on such parts and components have partially offset such pressure in Q1. In terms of the Q2 and the full year, as you may have noticed that there is the rising material cost pressure facing by the entire industry, including the memory chips, battery materials like the lithium carbonate, as well as NCM, and also copper and aluminum raw materials. Starting Q2 and beyond, on average, the cost impact per unit is around more than RMB 10,000. For the full year, the company still aims to achieve a vehicle margin of around 17%-18%. [Non-English content] To achieve a Q2 and a full year vehicle margin of 17%-18%, we will be taking these several actions. The first is to further increase the product mix of products with higher prices and also higher margin contributions, like the ES8 and ES9. For other products with moderate margin, we will also maintain a stable pricing and also promotional policies. We will not compromise on the margin performance of such cars for the sake of a volume contribution. Thirdly, we will also work closely with our supply chain partners to promote on the engineering improvement, efficiency improvement, as well as commercial negotiations to together mitigate the cost pressure. With that, we will target for a Q2 and full year vehicle margin of around 17%-18%. [Non-English content] Thank you very much. The next question comes from Tim Hsiao with Morgan Stanley. Please go ahead. Hi, this is Tim Hsiao from Morgan Stanley. Thanks for taking my questions and congratulations on another solid quarter. I have two questions. The first question is about the vehicle sales, because we noticed that sales of the ES8 and ES9 series large SUV are expected to likely more than triple year-over-year this year, while the rest of the lineup is likely to see a roughly 20% year-over-year decline under our 40%-50% full year volume guidance. Once the growth of the ES8 and ES9 series is fully unfolded, and the groups total volume might approach like a 500,000 units target, how does NIO plan to reboost the growth of the subsequent models, for example like a ES5, ES6, ES7 series, which are likely to face greater competition in the market? That's my first question. [Non-English content] Thank you for the question. As you can see, the overall volume growth this year is mainly driven by the models with high price and also high margin. They are playing an important role in supporting both our volume growth as well as our vehicle margin improvement. For the ES8, we will maintain its stable and strong market performance, while very soon we are going to start to deliver the ES9, and later we will also introduce the five-seater of the ES8 as they were all playing such a role. For the ONVO brand, we have L90 and L80 continue to lead the market share and sales in the price segment between RMB 200,000- RMB 300,000. Also starting next year, our entire product portfolio will enter into a new phase of development, where we are going to upgrade our ET5, ET5T, ES6 and EC6 also to the latest technology platform and digital architecture, while the ONVO brand next year will also have new products. In general, we are going to maintain a pace of around seven to five new or relatively new products every year. Of course, with the launch of such new products, we don't pursue absolute increase in the volume of the cars. Instead, we would like to achieve a leading market share in each of their respective segments. [Non-English content] We also believe that our existing product portfolio and offering can support and sustain our competition and competitiveness in the market. In the first four months, the total sales of the company actually helped the passenger vehicle market in Shanghai. We've achieved 8% of the market share among Shanghai's passenger vehicle market. As we continue to expand our channels and the network coverage, as we continue to deploy Power Swap Stations and facilities, as the users in the lower tier cities open up their mind for the battery electric vehicle product, we believe that our existing product lines, as well as our upcoming products, will help us to achieve a reasonable market share within the passenger vehicle market in China. Thank you, William. Thank you. My second question is about the profit and OpEx, because NIO has posted two consecutive non-GAAP profitable quarters. Do you anticipate maintaining the quarterly non-GAAP profit target throughout 2026? In the meantime, can the current OpEx parameters, i.e., SG&A ratio below 10% and the quarterly R&D spendings at RMB 2 billion-RMB 2.5 billion, be adequate to support robust business growth moving forward? When is the next R&D investment upcycle expected to begin? That's my second question. Thank you. [Non-English content] Thank you for the question. For the full year 2026, our financial target is to achieve positive non-GAAP operating profit. In terms of the OpEx guidance for the R&D expenses, we target to maintain our non-GAAP R&D investment or expenses to be around RMB 2 billion-RMB 2.5 billion per quarter. For this level of spending, we believe that it will be enough to sustain and support our investments into the key technologies such as chips, operating systems and etc., to make sure that we have strong competitiveness and also technical leadership. Secondly, such investment will also support the launch and the rollout of new models every year as introduced by William. In the meantime, as we keep the expenses flat, we are also putting efforts in improving the overall efficiency and utilization of such resources. Last year we rolled out the CBU mechanism, where under that mechanism we are now using less money to yield more R&D results. As mentioned, the productivity or the yield of RMB 2 billion R&D investment as of today is equivalent to maybe the results of RMB 3.5 billion R&D investment in the past years. For the entire company, we've been staying with the battery electric vehicle roadmap, which can make us more focused than spreading our efforts for range extended vehicles or PHEV. In that case, we can be more efficient in making our investments, which is different from some of our peers where they have to split their efforts for different powertrain systems. [Non-English content] Regarding the SG&A expenses, in general, we hope that the SG&A as a percentage of the revenue is around 10%, but it can be different from quarter to quarter. For example, in Q2, we have a quite intensive product launch and delivery cycle, where the corresponding marketing and the launch expenses are actually higher than the previous quarter. The absolute amount in Q2 had a surge, especially the selling expenses in Q2 surged a lot from the Q1 baseline. In Q3 and Q4, as most of the new products will be already in the market by then, the absolute amount in the second half will also be relatively lower. There will be also differences from quarter to quarter. Thank you, Tim. Thank you, Stanley. Thank you, William. Thank you. The next question comes from Paul Gong with UBS. Please go ahead. Thanks, everyone. Thanks for taking my questions and congrats on this quarter. I have two questions. The first question is regarding the competition in the nine series or large SUV segments. I think the success of the ES8 since late last year has attracted competitors launching the large SUVs, as we see in this Beijing Auto Show. Quite a few of them are even priced with very aggressive pricing. How do you think about the competition in this segment? What is the moat for NIO? How can NIO stay ahead in this segment as the sales leader champion in this high-end large SUV segment? That is my first question. [Non-English content] Thank you for the question. It's true that the NIO ES8 has created many records. It has achieved 100,000 delivery milestone in just 215 days, which is the fastest among all the cars priced above RMB 400,000 in China. For five consecutive months, it has been the sales champion in the price segment above RMB 400,000 as well as in the large SUV segment, regardless of the powertrain types. Looking at the sales of the large three-row SUV priced above RMB 400,000, ES8 has achieved a 49.7% market share. The reason for its success is because itself is the embodiment of our 11 years of systematic capability and innovation development. [Non-English content] In terms of such systemic capabilities and innovation, it includes our in-house capabilities for full stack technologies, as well as our capabilities for the innovative supply chain. The reason I would like to highlight the innovative supply chain is that on the ES9, we have applied a lot of industry first technologies, where we need to work hard with our supply chain partners to mass produce and make these advanced technologies happen. We also have leading capabilities for the advanced manufacturing life cycle quality, which is well recognized by many authorities in the automotive industry. We also have our smart power systems, our charging and swapping network, and also we have established a nationwide premium and holistic car user scenarios and holistic experience for our users. With these six system capabilities established in the past 11 years, we now are establishing ourselves as a premium brand and also leading in the premium segment. [Non-English content] In addition to these systemic capabilities, we also have spotted two findings among NIO users who have chosen our products. The first is that the competition landscape of China's new energy vehicle market is now transitioning from a chaotic brand competition with a more clarified competition where the clarity has been introduced to the overall brand and competition landscape for the new energy vehicle market in China, where among all these competitors, NIO is widely recognized as a premium brand and also well accepted by the public as a premium brand. Among many users, they have already established a consensus where NIO will be the next car after Mercedes, BMW, and Audi. In Q1, the NIO brand has the average selling price of RMB 390,000. That is around RMB 50,000 higher than that of BMW and 50% higher than that of Audi. These are lively examples. In cities like Shanghai or around the Yangtze River Delta area or in the first tier cities in China, actually our market share has already surpassed the market share of the ICE models from all those traditional luxury brands. In general, in the Chinese market, NIO has already established or is starting to establish itself as a well-recognized premium brand. [Non-English content] For the ONVO brand, its average selling price is around RMB 240,000, which is also comparable with many Tier 2 luxury brands. Now ONVO is also the go-to option for many families pursuing high quality and also premium car usage experience. For Firefly, it has achieved 2/3 of the market share in the high-end small car market. Its average selling price is around 50% higher than other small car competitors. In terms of its design, safety, and also build quality, it is providing our users with sufficient value and also creating sufficient user value for them. For the entire company, be it the NIO brand or ONVO brand or the Firefly brand, we are positioning ourselves as premium in general, and this is also a consensus among our users. [Non-English content] Also in addition, for the NIO, ONVO, and the Firefly brand, we have been insisting on the original design, we have been making long-term dedication and a commitment to our products. We also have the corporate missions and values where our users find themselves, can really identify with and resonate with all this mindset and mentality. Many users actually pursue beyond simple functions or configurations. They are more seeking for the emotion, connection, and resonance. We also have the community to create them such emotion experience. When it comes to competition, such emotion touchpoints can really create us a unique competitive edge where we don't need to be overaggressive with the prices. Not to mention that when the entire industry is under heavy cost pressure, a low price point may not generate you scale effect or economies of scale. In that case, a low price may not necessarily translate into an advantage, especially for the rising raw material costs on the memory chips, batteries, copper, aluminum. There is no economy of scale for such components, which means that a higher volume does not translate into a good margin performance of the car. In that case, for us, we will insist on our premium brand positioning and insist on providing our users good emotional experience. Thanks, and well understood. My second question is regarding the potential indirect price risk under the challenge of the raw material cost inflation. Just now, Stanley mentioned cost inflates by about more than RMB 10,000. I think it's not only your challenge, but it's an even bigger challenge for your competitors who price their products at a cheaper price level. Under this competition and the cost inflation challenge, do you think there is any opportunity to cut some of the incentives, and indirectly raise a little bit of pricing for the industry and for yourself? [Non-English content] Thank you for the question. It's true that the entire industry is facing the cost pressure, mainly driven by the raw material costs as well as the prices of the semiconductors, especially the memory chips. As mentioned by Stanley, the cost impact is over RMB 10,000 per car for our company. Our overall strategy is still to stabilize our prices, while in the meantime, we are also dialing back on some discounts and promotions. Facing the same pressure, different companies may have different coping mechanisms. For us, it's about stabilizing the prices while maintaining and improving our overall competitiveness on the products and the services than just sacrificing on the margin for the sake of the volume. Our strategy is to maintain a reasonable volume increase, while keep improving our margin and the EBIT performance as those are our key business targets. Overall speaking, different companies have different coping mechanisms and strategies. For us, we will be insisting on our philosophy and to mitigate the impact. [Non-English content] In the meantime, on the supply chain, since last year, we've been promoting some new models, working with our partners. One is transparent supply chain, and another is a mechanism or a principle called primary and preferred partners. In general, we work closely with our partners to identify costs and processes that are not creating user value, and we work with them to lower such costs or optimize such processes. In general, we believe that on the supply side, there should be around 5%- 10% opportunities driven by such optimization. For this year on the supply chain, we will be focusing on doing meticulous operations and management together with our partners to identify opportunities that can offset or mitigate the impact on the rising raw material cost. Thank you, Paul. Thank you very much. That's quite helpful. Thank you. The next question comes from Nick Lai with JPMorgan. Please go ahead. Okay, thank you William [Foreign language]. Thank you for taking my question. This is Nick from JPMorgan. Two simple questions. The first question is, can you give us a quick recap and quick update of our ADAS strategy? You mentioned earlier in the call that our own in-house chips [audio distortion] for now. I wonder how fast our in-house chip will be deployed to the rest of the world and how this ADAS strategy is gonna be make up for the much more competitive competitors. At the same time, I'm aware that our in-house chip [category] has placed RMB 2 billion for [fund raising] in the first quarter. How will that help financing in R&D? Thank you that's the first question. [Non-English content] Thank you for the question. For NIO's in-house developed intelligent driving chip NX9031, it is the world's first automotive-grade chip of a 5 nm process. It comes with the industry leading capabilities in inference, data bandwidth, ISP performance as well as the interchip communications. It was first mass produced on the NIO ET9 in last March. To date, we have already shipped more than 250,000 pieces of these chips to our products. The chip solution itself is already pretty mature. Earlier, we have also introduced this chip to the ONVO NIO products starting with L90S. By introducing this to the ONVO brand, we can also merge the autonomous driving or ADAS software baseline, improving the overall R&D efficiency, as well as enhance their data closed loop capabilities. [Non-English content] In the second half of this year, we believe that more than 80% or 85% of our cars will be equipped with our in-house developed smart driving chip. In terms of our AD solution and AD roadmap, as you see that starting this year, we are moving to the architecture featuring our NIO World Model plus the closed loop reinforcement learning, it has great potential for the continuous development and iterations as well as good efficiency, because we are only using 20% of the cloud computing power in comparison to our competitors or peers to achieve the same level or even better smart driving experience and performance. With this major version and upgrade, our users actually all speak highly of the smart driving experience. Later this year we will have another two major upgrades. We are quite confident with the overall AD performance as well as its growth potential. In terms of the business model for the ADAS, we will continue our subscription services and the business model on the ADAS, as it will also become a very important revenue driver among our other sales revenue, mainly based on the services and also community related businesses. Right now we are offering free subscriptions to some early users or new users, but for the used cars, they will have to pay for the ADAS subscription. For the long term, we see the potential in that. In terms of our AD solution, we have already completed the entire chain from the chip to the model and architecture to the closed-loop data as well as the business model. In terms of the Shenji and the recent financing, of course, a smooth financing driven by the Shenji chip business can also give us more resources and the flexibility in developing our upcoming chip products, especially chips that are more affordable. Thank you, Nick. Next question comes from Xueqing Zhang with CICC. Please go ahead. Hi. Thank you for taking my question. Congratulations on our robust profit in the first quarter. My first question is about ONVO. We see that L80 has officially launched this month. How do you see from the market feedback on the orders? We see competition currently. How will the L80 overcome the new vehicle effect? Which means we see some new models have quite large orders in the beginning, but later they will encounter a sharp decrease. What's our expect on the L80's sustainable monthly sales performance? For the overall ONVO brand, what's our strategy to be employed to enhance the brand awareness for ONVO in total? Thank you for the question. For the ONVO L80, we believe it's a defining and also revolutionary product in the large five-seater SUV segment. In general, the market size for the five seat SUV is three times of that for the three-row SUV segment, which means that for the L80, it is being able to tap into a greater and broader market than the L90. Since the official launch of the ONVO L80 on April 29th, we actually have received the positive feedback both from the media as well as from the users who test drove the vehicles, and its order intake is also meeting our expectations. Regarding the target users of the ONVO L80, actually, the car can cater to a pretty wide range of user groups, including young couples with one kid, families with pets, or families with kids that are already grown up. For the ONVO L80, we believe that its core competitiveness still is powered by the technology as well as its overall product performance, including how it has reimagined the space and as well as all this lifestyle and scenario based solutions. We believe that the ONVO L80 will drive the entire large five-seater SUV segment into the BEV era, just like how L90 and the ES8 did with the large three-row SUV segment. [Non-English content] Right now for the ONVO brand, the major challenge is still because of its overall brand awareness. Since after all, ONVO has just started its delivery for around 20 months. We've also done this study on the ONVO's awareness. Its current awareness is basically on par with the awareness of a new brand in the year of 2020. To raise its brand awareness, we are also taking different approaches so that more people will be able to know about the brand. For example, we have collaborated and invited some celebrities to promote our products and events, where many of the celebrities have good reach among the target users of ONVO. We are also asking our frontline colleagues and teams to really go into the fields to go door to door to promote our products and invite users for the test drives. It takes a lot of effort, but it is also taking effect. Overall speaking, it takes time to really establish and build the brand awareness on the ONVO. The good thing is that once the public or the users know about the brand, we have a pretty efficient conversion from knowing about the brand all the way to the order placement. Thank you. Thank you. My second question is regarding to the other sales. We have seen that the gross profit margin of other sales has a significant improvement in the first quarter to above 20%, which I think is a historical high. Could you quantify the main drivers behind this margin growth? Is there any one-off effect? Provide us maybe some outlook on the trend this year. [Non-English content] Thank you for the questions. Regarding other sales, it mainly includes after-sales services, service and maintenance, accessory e-shop, power services, and also NIO Life merchandise. We've been witnessing significant improvement in the after-sales performance and also financial since Q4 last year. In Q1 this year, we have achieved over 20% other sales margin. With this result, there was no one-off impact. The key drivers of the improvement in other sales margins, mainly because first of all, NIO the entire company has been committed to establishing these brand connections with our users and to deliver holistic experiences throughout the life cycle of the products that can go beyond their expectations. With that, we have a very strong user stickiness and also a strong willingness to pay for these premium services. For example, after sales services, the accessory e-shop, and the NIO Life products all have actually are popular among our users, and they also generate good results. Secondly, we've been improving the overall efficiency of such services, especially power services for the operating CapEx, where operating cost per station, we've actually achieved quite significant improvement. Thirdly, we are also leveraging our energy and power services by doing off-peak charging and also grid interactions and also electricity trading to be able to also generate good results. [Non-English content] With that, we believe that our other sales, mainly our services and community-related businesses, are also embracing an inflection point and entering into a new phase of development. For the full year 2026, we have the target for a 20% other sales margin. [Non-English content] Going into a longer term, as we continue to increase our user base and also the efficiency of such services, we believe that the profitability of other sales, as mentioned, services and the community related businesses, will also continue to improve. In the long run, in addition to the new car sales, other sales will also become a very important and the key driver for our sustainable growth. Thank you, Xueqing. Thank you. The next question comes from Yuqian Ding with HSBC. Please go ahead. Thank you. Yuqian here. Conscious of the time, I've just got one question. Regarding the second half, could you talk a bit more about the new car plan other than the current new models ramp up into second half? What's the biggest expectation in second half? Could you share the ES7's timeline and position among the current big-sized premium SUV pack you have? Thank you. [Non-English content] Thank you for the question. In the second half of this year, the major new product we are going to launch will be the five-seater version of the all new ES8. In addition to that, our primary focus in the second half will be dedicated to selling cars and also serving our users well. Thank you, Yuqian. Operator, next in the line, please. The next question comes from Joey Yang with Bank of America. Please go ahead. Thank you management for taking my questions. I also have one question on your Battery Swap Station. Can you talk about what are the target number of your Battery Swap Stations and also the targeted utilization rate by end of this year? When will the Battery Swap Business achieve profitability on a standalone basis? Thank you. [Non-English content] Thank you for the question. For our Power Swap Stations, at its peak, mainly during the holidays or busy hours, on average, each station can deliver around 45 swaps per day. On the average days, it's around 30 swaps per day. For the short term, our focus will still be on rolling out and expanding our power swap network. This year, our target is to build a total of more than 1,000 Power Swap Stations. Especially starting Q3, we will be able to roll out our fifth generation Power Swap Station at the scale. In the meantime, we are continuously improving the operational efficiency of our Power Swap Stations. For the short term, we will still need to make up front investment and early deployment of Power Swap Stations. For the short term, the profitability of the power swap network is not our primary focus. I would like to mention that for the services and community related businesses, basically other sales, it has already achieved profit. The power swap business is also included in that part of the profit, which means that we will have resources to sustain the continuous expansion of our swap station network. Thank you, Joey. Thank you very much. That is very helpful. Thank you. There are no further questions. I'd like to turn the call back over to the company for closing remarks. Thank you again for joining us today. If you have further questions, please feel free to contact NIO's IR team through the contact information on the website. This concludes the conference call. You may now disconnect your line. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.