蔚來 (NIO) 2018 Q3 法說會逐字稿

Thank you for standing by for NIO Incorporated's Earnings Conference Call for the Third Quarter of 2018.

感謝您出席蔚來汽車 2018 年第三季度財報電話會議。

(Operator Instructions)

（操作員說明）

Today's conference call is being recorded.

今天的電話會議正在錄音。

I will now turn the call over to your host, Ms. Jade Wei, Senior Director of Investment Relations of the Company.

現在我把電話轉給你們的東道主，公司投資關係高級總監魏潔女士。

Good evening and good morning everyone! Welcome to NIO's third quarter 2018 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.

大家晚上好，早上好！歡迎參加蔚來汽車 2018 年第三季度財報電話會議。公司的財務和經營業績已在今天早些時候的新聞稿中發布，並發佈在公司的投資者關係網站上。

In today's call, we have Mr. William Li, NIO's founder, Chairman and Chief Executive Officer; Mr. Louis Hsieh, our Chief Financial Officer and Mr. Nick Wang, our Vice President of Finance. Mr. Nick will begin with prepared remarks and William will join for the Q&A session.

今天的電話會議邀請到了蔚來創始人、董事長兼首席執行官李斌先生；我們的首席財務官Louis Hsieh先生和我們的財務副總裁Nick Wang先生。尼克先生將首先發表準備好的講話，威廉將參加問答環節。

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 Security 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.

在我們繼續之前，請注意今天的討論將包含根據 1995 年美國私人安全訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有的風險和不確定性。因此，公司的實際結果可能與今天表達的觀點存在重大差異。

Further information regarding risks and uncertainties is included in the filings of the Company with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law.

有關風險和不確定性的更多信息包含在公司向美國證券交易委員會提交的文件中。除適用法律要求外，公司不承擔更新任何前瞻性陳述的義務。

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 audited non-GAAP measures to comparable GAAP measures.

另請注意，蔚來的盈利新聞稿和本次電話會議包括對未經審計的 GAAP 財務信息以及未經審計的非 GAAP 財務指標的討論。請參閱蔚來的新聞稿，其中包含經審計的非公認會計原則措施與可比公認會計原則措施的調節表。

With that, I will now turn this call over to our CFO, Mr. Louis Hsieh.

現在，我將把這個電話轉給我們的首席財務官路易斯謝先生。

Thank you for joining our inaugural earnings conference call today. On behalf of William and the entire NIO team, we are excited to report our first quarter as a public company following the listing on the New York Stock Exchange on September 12. We would like to thank our employees, investors, and particularly our users, whose support has allowed us to continue our journey to fulfill our vision and to execute on our strategies.

感謝您今天參加我們的首次財報電話會議。我們代表 William 和整個 NIO 團隊，很高興地報告 9 月 12 日在紐約證券交易所上市後作為上市公司的第一季度業績。我們要感謝我們的員工、投資者，特別是我們的用戶，他們的支持使我們能夠繼續實現我們的願景並執行我們的戰略。

We are pleased to report a solid set of financial results for the quarter. The smooth ramp of our JAC/NIO manufacturing facility led to the production of over 4,200 ES8s and the brand new direct delivery system and procedures that we've created successfully delivered 3,268 vehicles in the third quarter. That generated revenues of over RMB1.4 billion, up substantially from the second quarter.

我們很高興報告本季度的一系列穩健的財務業績。我們的江淮/蔚來製造工廠的順利生產導致了超過 4,200 輛 ES8 的生產，並且我們創建的全新直接交付系統和程序在第三季度成功交付了 3,268 輛汽車。其營收超過 14 億元人民幣，較第二季度大幅增長。

Delivery of the ES8 in October reached 1,573, slightly below September number, due to the anticipated slow deliveries in early October when vehicle registration offices were closed for the seven-day golden week national holiday in China.

10 月份 ES8 的交付量達到 1,573 輛，略低於 9 月份的數量，原因是 10 月初中國黃金周 7 天假期期間車輛登記處關閉，預計交付緩慢。

We utilized the time during the slower holiday period to modify our production line in our JAC/NIO plant to prepare for the future launch of our ES6. We remain confident that our Q4 deliveries will be in the range of 6,700 to 7,000 vehicles, which leads to our reaffirmed guidance that the number of ES8 deliveries will reach 10,000 in the second half of 2018.

我們利用假期淡季的時間，對江淮/蔚來工廠的生產線進行了改造，為未來ES6的上市做準備。我們仍然有信心第四季度的交付量將在 6,700 至 7,000 輛之間，這導致我們重申了 ES8 交付量將在 2018 年下半年達到 10,000 輛的指導方針。

We expect to finish production of all founders' edition ES8s within the next few weeks and plan to deliver the vast majority of them by the end of the year, as vehicle registration procedures allow. We plan to start to deliver a small number of base-edition ES8s in the production order pool in early December. In the future, as our production continues to ramp, our target is to deliver ES8s to our users within two to three months after the production order deposits are received.

我們預計將在未來幾週內完成所有創始人版 ES8 的生產，併計劃在車輛登記程序允許的情況下在今年年底前交付其中的絕大多數。我們計劃在 12 月初開始在生產訂單池中交付少量基礎版 ES8。未來，隨著產量的不斷提升，我們的目標是在收到生產訂單定金後的兩到三個月內將ES8交付給用戶。

Our ES8s have been delivered to over 170 cities in China. With over 5,000 vehicles in operation, we have received valuable feedback from our users. Users have lauded the powerful, solid acceleration while also providing reliable braking and other safety features. Users have also noted that the spacious and comfortable interiors are with a well-thought-out design for families. Users that compare the driving performance of the ES8 to well-known, established premium brands such as Mercedes, BMW and Audi, or to Tesla's Model S and Model X, the only premium EV brand in China, and find the ES8 very competitive, or even better, in a variety of performance specifications while providing a much more luxurious and spacious interior and comfortable ride with customized entertainment system and applications for an enjoyable driving experience.

我們的ES8已交付中國170多個城市。我們有超過 5,000 輛車輛在運營，從用戶那裡收到了寶貴的反饋。用戶稱讚其強大、穩定的加速性能，同時還提供可靠的製動和其他安全功能。用戶還注意到，寬敞舒適的內飾是為家庭精心設計的。將ES8 的駕駛性能與梅賽德斯、寶馬和奧迪等知名高端品牌進行比較，或者與中國唯一的高端電動汽車品牌特斯拉的Model S 和Model X 進行比較，並認為ES8 非常有競爭力的用戶，或更好的是，在多種性能規格的同時，提供更加豪華、寬敞的內部空間和舒適的乘坐體驗，並配有定制的娛樂系統和應用程序，帶來愉快的駕駛體驗。

NOMI, the first voice-enabled deep learning AI digital system installed in a Chinese premium cars, has won the hearts of ES8 users. Users tell us NOMI acts as an intelligent and human-like companion that makes driving much more fun.

NOMI是中國高端汽車首款搭載語音的深度學習AI數字系統，贏得了ES8用戶的青睞。用戶告訴我們，NOMI 是一個智能且類人的伴侶，讓駕駛變得更加有趣。

Starting from this month, we are rolling out an upgrade to the ES8 software, version 1.1.0, the first over-the-air software upgrade in our history. Version 1.1.0 turns on a 360 degree camera view around the vehicle to assist in parking and provides a positive safety assistance functions such as Forward Collision Warning, FCW, and Lane Departure Warning, LDW, as well as improving many other functions to make driving safer and more pleasant.

從本月開始，我們將推出 ES8 軟件升級版本 1.1.0，這是我們歷史上首次無線軟件升級。 1.1.0版本開啟車輛周圍360度攝像頭視野輔助停車，並提供前向碰撞警告FCW、車道偏離警告LDW等積極的安全輔助功能，並改進了許多其他功能，讓駕駛更輕鬆。更安全、更愉快。

Thinking beyond the delivery of our vehicles, we continue to expand our service network and enhance our service capabilities.

除了車輛交付之外，我們還繼續擴大服務網絡並增強服務能力。

As of today, we have 12 NIO house open in 10 cities, including Shanghai, Beijing, Guangzhou, Nanjing, Hangzhou, Shenzhen, Suzhou, Chengdu, Xi'an, and Hefei. We also have another nine pop-up NIO Houses open in large cities where we see increasing demand for the ES8 and brand recognition of NIO.

截至目前，我們已在上海、北京、廣州、南京、杭州、深圳、蘇州、成都、西安、合肥等10個城市開設了12家NIO House。我們還在大城市開設了另外九家蔚來快閃店，我們看到這些城市對 ES8 的需求和蔚來的品牌認知度不斷增加。

We currently have 38 service centers across 20 cities, mainly in authorized service centers. Our "worry-free" services are highly praised by our users with over 90% of the ES8 users purchasing the worry-free service packages. Our service teams are working diligently to make great service a hallmark of NIO's brand and users' experience.

目前我們在20個城市擁有38個服務中心，主要是授權服務中心。我們的“無憂”服務深受用戶好評，90%以上的ES8用戶購買了無憂服務套餐。我們的服務團隊正在努力工作，使優質服務成為蔚來品牌和用戶體驗的標誌。

The third quarter was also critical to monitor our users utilize our full range of power solutions, including NIO Home Chargers, NIO APP power maps, power trucks, power swaps and one-click power services. More than 70% of the ES8 owners thus far have installed home chargers in their own parking spaces, which gives them the most convenient and cost-effective charging solution. We have 295 power trucks covering 21 cities and swap stations within 16 cities at the end of September. That is in addition to a growing infrastructure of public chargers across the country and the NIO APP has the location information for more than 130,000 public charging piles.

第三季度對於監控我們的用戶使用我們的全系列電力解決方案也至關重要，包括蔚來家用充電器、蔚來APP電力地圖、電力卡車、電力交換和一鍵電力服務。截至目前，已有超過70%的ES8車主在自家停車位安裝了家用充電器，這為他們提供了最便捷、最具成本效益的充電解決方案。截至9月底，我們擁有295輛動力卡車，覆蓋21個城市，並在16個城市內擁有換電站。除此之外，全國公共充電基礎設施不斷完善，蔚來APP擁有超過13萬個公共充電樁的位置信息。

All of these resources are accessible using the NIO APP, which provides users with one-click service to these charging solutions. The total number of one-click services just exceeded 10,000 last week, demonstrating that our charging capabilities are well-supported by flexible infrastructure, investment, data-driven optimization and solid execution.

所有這些資源都可以通過蔚來APP訪問，該APP為用戶提供了這些充電解決方案的一鍵服務。上週一鍵服務總數剛剛突破10,000個，這表明我們的充電能力有靈活的基礎設施、投資、數據驅動的優化和紮實的執行力支撐。

Speaking of growing user community, we engaged with our growing user community through offline and online platforms.

說到不斷增長的用戶社區，我們通過線下和線上平台與不斷增長的用戶社區進行互動。

Our NIO APP has over 626,000 active users in total and more than 170,000 active daily users by the end of October.

截至10月底，蔚來APP總活躍用戶超過62.6萬，日活躍用戶超過17萬。

We are pleased with the way our brand and our vision of a joyful lifestyle have been received by our users, and we're excited to continue to grow the NIO community.

我們對用戶接受我們的品牌和快樂生活方式的願景感到滿意，我們很高興能夠繼續發展蔚來社區。

We have built a strong team to support our future growth. Our focus remains to deliver vehicles of the highest quality, to further improve the user experience and to prepare a successful launch of our ES6.

我們建立了一支強大的團隊來支持我們未來的發展。我們的重點仍然是提供最高質量的車輛，進一步改善用戶體驗並為 ES6 的成功發布做好準備。

I will now turn the call over to our vice president of finance, Mr. Nick Wang, to provide the financial details for the quarter.

我現在將把電話轉給我們的財務副總裁 Nick Wang 先生，以提供本季度的財務詳細信息。

Thank you, Louis. Speaking as one member of the NIO family, I echo Louis's sentiments and am very excited about our prospects for the future. Our solid third quarter results get us off to a strong start following the first full quarter of production and deliveries.

謝謝你，路易斯。作為蔚來大家庭的一員，我贊同路易斯的觀點，並對我們的未來前景感到非常興奮。繼第一個完整季度的生產和交付之後，我們穩健的第三季度業績使我們有了一個良好的開端。

I will now go over some of our financial results for the third quarter of 2018. To be mindful of the length of this call, I will address financial highlights here and encourage listeners to refer to our earnings press release which is posted online for additional details.

我現在將回顧一下我們 2018 年第三季度的一些財務業績。為了注意本次電話會議的長度，我將在此介紹財務要點，並鼓勵聽眾參閱我們在線發布的收益新聞稿以了解更多詳細信息。

Our total revenues in the third quarter were RMB 1.47 billion or $214 million, representing an increase of 3,095.3% from the second quarter of 2018.

我們第三季度的總收入為 14.7 億元人民幣（2.14 億美元），較 2018 年第二季度增長 3,095.3%。

Our total revenues are made of two parts; vehicle sales and other sales.

我們的總收入由兩部分組成；車輛銷售和其他銷售。

Vehicle sales were RMB 1.43 billion or $207.8 million, representing an increase of 3,113.8% from the second quarter of 2018. The increase over the second quarter of 2018 was attributed to an accelerated delivery of the ES8 in the third quarter.

汽車銷售額為14.3億元人民幣（2.078億美元），較2018年第二季度增長3,113.8%。較2018年第二季度的增長歸因於ES8在第三季度的加速交付。

Remember that we only started making deliveries of the ES8 in the last three days of June, so our second quarter sales figures reflect the sales from June 28th through June 30th.

請記住，我們在 6 月的最後三天才開始交付 ES8，因此我們的第二季度銷售數據反映的是 6 月 28 日至 6 月 30 日的銷售情況。

Other sales were RMB 42.7 million or $6.2 million, representing an increase of 2,581.8% from the second quarter of 2018. The increase over the second quarter of 2018 was mainly attributed to increased revenues recognized from the home charters installed in the third quarter.

其他銷售額為人民幣4,​​270 萬元或620 萬美元，較2018 年第二季度增長2,581.8%。較2018 年第二季度的增長主要歸因於第三季度安裝的家庭包機確認的收入增加。

Cost of sales was RMB 1.6 billion or $230.9 million, representing an increase of 696.2% from the second quarter of 2018. The increase over the second quarter of 2018 was mainly driven by the delivery volume of the ES8.

銷售成本為16億元人民幣（2.309億美元），較2018年第二季度增長696.2%。較2018年第二季度的增長主要由ES8的交付量推動。

Our gross margin was negative 7.9%, compared with negative of 333.1% in the second quarter of 2018, mainly driven by the larger scale of production and deliveries of the ES8. We expect gross margins to turn positive in the quarters ahead as production and deliveries increase.

我們的毛利率為負7.9%，而2018年第二季度為負333.1%，主要是由於ES8的生產和交付規模更大。我們預計，隨著產量和交付量的增加，未來幾個季度的毛利率將轉正。

Research and development expenses were RMB 1.02 billion or $149 million, representing an increase of 37% from the third quarter of 2017 and an increase of 33.7% from the second quarter of 2018.

研發費用為人民幣10.2億元或1.49億美元，較2017年第三季度增長37%，較2018年第二季度增長33.7%。

The increase was primarily attributed to three items Number one, increased share-based compensation expenses recognized related to stock options granted to the Company's employees. Number two, an increased number of personnel related to product and software development teams and Number three, increased development expenses of the ES6, the five-seater premium electric SUV, which is expected to be launched by the end of 2018.

這一增長主要歸因於三個項目：第一，與授予公司員工的股票期權相關的股權激勵費用增加。第二，增加了產品和軟件開發團隊相關人員的數量；第三，增加了預計將於 2018 年底推出的五座高端電動 SUV ES6 的開發費用。

If we exclude share-based compensation expenses, R&D expenses were RMB 947.3 million or $137.9 million.

如果剔除股權激勵費用，研發費用為 9.473 億元人民幣或 1.379 億美元。

Our selling, general, and administrative expenses were RMB 1.7 billion or $243.2 million, representing an increase of 208.9% from the third quarter of 2017 and an increase of 74.6% from the second quarter of 2018.

我們的銷售、一般和管理費用為 17 億元人民幣（2.432 億美元），較 2017 年第三季度增長 208.9%，較 2018 年第二季度增長 74.6%。

The increase in SG&A expenses over the second quarter of 2018 was also primarily attributed to three items Number one, increased share-based compensation expenses, Number two, an increased number of personnel related to user development and service related teams. And Number three increased selling expenses for test drives and other promotional events.

2018 年第二季度 SG&A 費用的增加也主要歸因於三個項目：第一，股權激勵費用增加；第二，與用戶開發和服務相關團隊相關的人員數量增加。第三，增加了試駕和其他促銷活動的銷售費用。

Excluding share-based compensation expenses non-GAAP, SG&A expenses were RMB 1.3 billion or $192.5 million.

不包括非公認會計原則的股權激勵費用，銷售、管理及行政費用為 13 億元人民幣（1.925 億美元）。

Loss from operations was RMB 2.8 billion or $409.1 million, representing an increase of 118.2% from the third quarter of 2017, and an increase of 49.9% from the second quarter of 2018. Excluding share-based compensation expenses non-GAAP, adjusted loss from operations was RMB 2.3 billion or $346.2 million.

運營虧損為 28 億元人民幣（4.091 億美元），較 2017 年第三季度增長 118.2%，較 2018 年第二季度增長 49.9%。不計非公認會計準則的股權激勵費用，調整後虧損營業額為23億元人民幣（3.462 億美元）。

Operating margin was negative 191.2%, compared with the negative of 4,076.8% in the second quarter of 2018. Excluding the share-based compensation expenses non-GAAP adjusted operating margin was negative 161.8%, compared with a negative of 3,938.9% in the second quarter of 2018.

營業利潤率為負 191.2%，而 2018 年第二季度為負 4,076.8%。若不包括股權激勵費用，非 GAAP 調整後營業利潤為負 161.8%，而第二季度為負 3,938.9% 2018 年。

Share-based compensation expenses were RMB 432.2 million or $62.9 million, representing an increase of 2,380.6% from the third quarter of 2017 and an increase of 581.2% from the second quarter of 2018.

股權激勵費用為人民幣4.322億元或6,290萬美元，較2017年第三季度增長2,380.6%，較2018年第二季度增長581.2%。

The increase in share-based compensation expenses was primarily attributed to increased share-based compensation expenses recognized because of a successful completion of our IPO. We recognized the SBC expenses related to the stock options granted to the Company's non-US employees whose grants included the condition of an IPO, which was a significant one-time non-cash charge and won't recur in the future at the similar level.

股權激勵費用的增加主要是由於我們成功完成首次公開募股而確認的股權激勵費用增加。我們確認了與向公司非美國員工授予的股票期權相關的 SBC 費用，這些員工的授予包括 IPO 的條件，這是一項重大的一次性非現金費用，並且將來不會以類似水平重複出現。

Net loss was RMB 2.8 billion or $409.2 million, representing an increase of 116.1% from the third quarter of 2017 and an increase of 56.6% from the second quarter of 2018. Excluding share-based compensation expenses non-GAAP and adjusted net loss was RMB 2.4 billion or $346.3 million, in the third quarter of 2018.

淨虧損為人民幣 28 億元或 4.092 億美元，較 2017 年第三季度增長 116.1%，較 2018 年第二季度增長 56.6%。不計非公認會計原則的股權激勵費用和調整後淨虧損為人民幣2018 年第三季度為24 億美元或3.463 億美元。

Net loss attributable to NIO's ordinary shareholders was RMB 9.8 billion or $1.4 billion. Accretion on convertible redeemable preferred shares and accretion on redeemable non-controlling interests to redemption value were RMB 6.9 billion or $1 billion, and RMB 31.4 million or $4.6 million, respectively in the third quarter of 2018.

蔚來普通股股東應占淨虧損為 98 億元人民幣（14 億美元）。 2018年第三季度，可轉換可贖回優先股的增值和可贖回非控股權益的贖回價值增值分別為69億元人民幣或10億美元，以及3140萬元人民幣或460萬美元。

Accretion on convertible redeemable preferred shares to redemption value was a non-cash event and will no longer recur after the company's IPO. Excluding share-based compensation expenses, accretion on convertible redeemable preferred shares to redemption value and accretion on redeemable non-controlling interests to redemption value, adjusted net loss attributable to NIO's ordinary shareholders non-GAAP was RMB 2.37 million, or $345.1 million.

可轉換可贖回優先股的贖回價值增值是非現金事件，在公司首次公開募股後將不再發生。不包括股份補償費用、可轉換可贖回優先股的贖回價值增值以及可贖回非控股權益的贖回價值增值，非公認會計準則下歸屬於蔚來普通股股東的調整後淨虧損為237萬元人民幣，即3.451億美元。

Basic and diluted net loss per ADS were both RMB 42.59 or $6.20. Excluding share-based compensation expenses non-GAAP, accretion on convertible redeemable preferred shares to redemption value and accretion on redeemable non-controlling interests to redemption value, adjusted basic and diluted net loss per ADS were both RMB 10.35 or $1.51.

每份美國存託股的基本和攤薄淨虧損均為人民幣 42.​​59 元或 6.20 美元。不包括非公認會計原則的股份補償費用、可轉換可贖回優先股的贖回價值增值和可贖回非控股權益的贖回價值增值，調整後每份美國存託股的基本和稀釋淨虧損均為人民幣10.35 元或1.51 美元。

Our balance of cash and cash equivalents, restricted cash, and short-term investment was RMB 9.2 billion or $1.3 billion, as of September 30, 2018.

截至 2018 年 9 月 30 日，我們的現金及現金等價物、限制性現金和短期投資餘額為 92 億元人民幣（13 億美元）。

And now for our Business Outlook. For the fourth quarter of 2018, the Company expects deliveries of the ES8 to be in a range of 6,700 to 7,000 vehicles, representing an increase of approximately 105% to 114% from the third quarter of 2018, and total revenue to be between RMB 2.87 to RMB 2.99 billion or from U.S. dollars, $418.5 million to $436 million, an increase of approximately 95.6% to 103.8% from the third quarter of 2018.

現在我們的業務展望。公司預計2018年第四季度ES8的交付量將在6,700至7,000輛之間，較2018年第三季度增長約105%至114%，總收入將在2.87元人民幣之間人民幣29.9億元，或美元4.185億美元至4.36億美元，較2018年第三季度增長約95.6%至103.8%。

This business outlook reflects the Company's current and preliminary view on the current business situation and market condition, which is subject to change.

本業務展望反映了公司對當前業務形勢和市場狀況的當前初步看法，可能會發生變化。

Now, this concludes our prepared remarks. I will now turn the call over to the operator to facilitate our Q&A session.

現在，我們準備好的發言就到此結束。我現在將把電話轉給接線員以方便我們的問答環節。

(Operator Instructions)

（操作員說明）

Dan Galves of Wolfe Research.

沃爾夫研究中心的丹·加爾維斯。

Can you talk a little bit about how order flow has progressed over the last couple of months? Also, how do you think things are going in terms of awareness of the product, brand recognition and what are you doing to actively grow awareness?

您能談談過去幾個月訂單流的進展情況嗎？另外，您認為產品認知度、品牌認知度方面進展如何？您正在採取哪些措施來積極提高認知度？

Great question.

很好的問題。

I think for order flow it is remain relatively stable, I know your question relates to backlog, right now we've delivered over 5,300 vehicles and we expect to deliver about 2,500 each in the next two months, so November and December each to reach our 10,000 goal.

我認為訂單流保持相對穩定，我知道你的問題與積壓有關，目前我們已經交付了5,300 多輛車輛，預計在接下來的兩個月內每輛交付約2,500 輛，因此11 月和12 月分別達到我們的目標10,000目標。

Every day we're receiving between 50 and 80, sometimes 100 new orders from the RMB5,000 deposit and our 45,000 production order deposit is healthy with a backlog right now of over 5,000. So order and demand remains solid.

每天我們都會收到 50 到 80 個、有時 100 個新訂單，這些訂單來自人民幣 5,000 元的押金，而我們的 45,000 個生產訂單押金狀況良好，目前積壓訂單超過 5,000 個。因此訂單和需求仍然穩定。

We're not doing that much as far as any kind of direct marketing, but we have opened up more NIO houses. So most of the ones we mentioned earlier, of the 12, were opened in the last couple of months, so they're beginning to get a lot more visitors.

我們沒有做那麼多直接營銷，但我們開設了更多蔚來之家。我們前面提到的 12 家商店中的大多數都是在過去幾個月內開業的，因此開始吸引更多的遊客。

Our APP, currently, is now has 626,000 active users, so we are getting awareness throughout the country, plus we have 5,000 cars on the road. So people are begining to talk about NIO.

目前，我們的 APP 擁有 626,000 名活躍用戶，因此我們在全國范圍內得到了認可，此外，我們還有 5,000 輛汽車在路上行駛。於是人們開始談論蔚來。

I will speak in Chinese and Eve will help me to translate.

我會說中文，Eve 會幫我翻譯。

(Speaking in Foreign Language).

（用外語講話）。

(Interpreted) Just like Louis mentioned, our community is growing rapidly and aggressively. By the end of October we have around 626,000 users and the DAU is around 170,000. As we can see, the brand awareness is increasing in the market and our delivery status is also going quite smooth.

（解釋）就像路易斯提到的那樣，我們的社區正在快速而積極地發展。截至 10 月底，我們的用戶數量約為 626,000，DAU 約為 170,000。我們可以看到，市場上的品牌知名度正在不斷提高，我們的交付狀況也相當順利。

We are now doing the user referral and the scenario-based test drives. All this helps us to get more new users and we think that this well received among all users.

我們現在正在做用戶推薦和場景試駕。所有這些都有助於我們獲得更多新用戶，我們認為這受到所有用戶的好評。

(Speaking in Foreign Language).

（用外語說話）。

(Interpreted) We think the user referral is a very good approach, because one user in Wenzhou actually gives the recommendation to around 10 users and we are quite confident with the word of mouth reputation building in the market.

（解讀）我們認為用戶推薦是一個非常好的方式，因為溫州的一個用戶實際上推薦了大約10個用戶，我們對市場口碑的建立很有信心。

You said that you plan to have positive gross margin in the quarters ahead. Can you talk about some of the most important items in the plan to improve the gross margin from where it was in Q3? What are the levers, what are the mechanisms to improve gross margin?

您說您計劃在未來幾個季度實現正毛利率。您能否談談提高第三季度毛利率的計劃中的一些最重要的項目？提高毛利率的槓桿、機制有哪些？

Well --

出色地 -

Go ahead, Nick.

來吧，尼克。

Yes, there are two major components in the gross margin. One is the build material and material cost; the other one is the fixed cost. We anticipate improvement on these two areas in Q4 because of our better economy scale and better leverage we have with our supply chain.

是的，毛利率有兩個主要組成部分。一是建築材料和材料成本；另一種是固定成本。由於我們更好的經濟規模和更好的供應鏈槓桿作用，我們預計第四季度這兩個領域會有所改善。

Okay. Thank you very much.

好的。非常感謝。

We expect the gross margin to improve and we expect the vehicle margin, if we hit our deliveries at 7,000 this quarter, the vehicle margin should definitely turn positive if we hit the 7,000.

我們預計毛利率會改善，我們預計車輛利潤率，如果我們本季度的交付量達到 7,000 輛，如果我們達到 7,000 輛，車輛利潤率肯定會轉正。

Thank you. Our next question comes from the line of Nick Lai from JP Morgan

謝謝。我們的下一個問題來自摩根大通的 Nick Lai

-- I have two quick questions, one is about the profit margin, can you share with us our view that profit outlook in 2019 and after taking into account of two major factors. One is potential subsidy cut and another one is cost drive on the battery side. Are we expecting batteries cost to come down?

-- 我有兩個簡單的問題，一個是關於利潤率，您能否與我們分享一下我們對 2019 年利潤前景以及考慮到兩個主要因素後的看法。一是潛在的補貼削減，二是電池方面的成本驅動。我們期望電池成本下降嗎？

And secondly, can you share with us the number of shipment and production, in the third quarter, production was 4,200 and shipment was 3,200 -- is there any bottleneck that we should be aware?

其次，您能跟我們分享一下出貨量和產量嗎？第三季度，產量是4,200個，出貨量是3,200個——有什麼瓶頸是我們應該注意的嗎？

There's not a bottleneck other than just getting our logistic system setup correctly, this is new to us. And then also there's, you know in China, most of the registration systems have a waiting list. So it takes time to get through the registration of the license plates.

除了正確設置我們的物流系統之外，沒有其他瓶頸，這對我們來說是新的。還有，你知道，在中國，大多數註冊系統都有等候名單。因此，完成車牌登記需要時間。

The factory is running relatively smoothly. During the Golden Week Holidays, we basically didn't produce cars but used it to revamp our line, so they can get produced both ES8s and ES6s, and also can custormized them, adjust the specific orders for customers.

工廠運轉比較順利。黃金周期間，我們基本上不生產汽車，而是利用它來改造我們的生產線，這樣既可以生產ES8，也可以生產ES6，也可以定制，調整客戶的具體訂單。

What was your other question Nick? I'm sorry, I forgot the first one.

尼克你的另一個問題是什麼？抱歉，我忘記了第一條。

Gross margin.

毛利率。

The gross margin stuff that we don't know, they'll be set at the end of this year.

我們不知道毛利率，它們將在今年年底確定。

(Speaking in Foreign Language).

（用外語講話）。

(Interpreted) Of course the subsidy in the next year will decrease [predominantly], you're asking for opinions and we think this is not going to affect of our gross margin that much because the sales price includes the subsidy and these will not affect us that much, but this will affect the money paid from users.

（解釋）當然明年的補貼會減少（主要是），你徵求意見，我們認為這不會對我們的毛利率造成太大影響，因為銷售價格包括補貼，這些不會影響我們那麼多，但這會影響用戶支付的錢。

And your earlier question about cost down, I think we expect some reduction in the cost of the battery and also in the bottom as we get the volume orders. Nick and team are working very to get 5% to 10% reduction on the cost of the vehicle production side.

你之前關於成本下降的問題，我認為我們預計電池成本會有所下降，並且隨著我們獲得批量訂單，成本也會下降。 Nick 和團隊正在努力將車輛生產成本降低 5% 到 10%。

We'll probably be on a fixed cost side, because we're going to have bigger volume next year. Apparently, the fixed cost amortization piece as part of the GM going to become improved as well.

我們可能會採用固定成本，因為明年我們的產量會更大。顯然，作為通用汽車一部分的固定成本攤銷部分也將得到改進。

[Fay Shang], Goldman Sachs.

[Fay Shang]，高盛。

You mentioned that you have modified production line to accommodate ES6 to be launched at year end. Can you maybe talk a little bit more about the roadmap for launching the new model? Do you also try to build up backlog as well and also what will be the key marketing strategy?

您提到您已經改造了生產線以適應年底推出的ES6。您能否多談談推出新車型的路線圖？您是否也嘗試建立積壓訂單以及關鍵的營銷策略是什麼？

(Speaking in Foreign Language)

（用外語發言）

(Interpreted) ES8 has already gone offline this May in the [powered] production line in Nanjing advanced manufacturing center and the other plan right now is to do the official launch of the ES6 at the middle of December. The whole company's now preparing for this launch event.

（解讀）ES8今年5月已經在南京先進製造中心的生產線下線，目前的另一個計劃是12月中旬正式推出ES6。目前整個公司正在為這次發布會做準備。

The model of the ES6 will also be made to order and other plan is we'll start the delivery of ES6 in the next year probably around June and July.

ES6的車型也將採用訂單生產，另外計劃是我們將在明年大概6月和7月左右開始交付ES6。

It would be very helpful to give us a sense of how you would expect gross margin to progress over time for ES6? For example, what's the break-even volume for gross margin for this smaller model? Is it similar to ES8 or it will be easier for you to turn profitable at a gross margin level?

如果能讓我們了解您預計 ES6 的毛利率將如何隨著時間的推移而增長，將會非常有幫助？例如，這個較小型號的毛利率盈虧平衡量是多少？是和ES8類似還是更容易在毛利率水平上實現盈利？

I think the quick answer for that is it's very similar to ES8. I think on a per-unit basis because the attractive lower price point. On a per-unit basis the contribution margin is a little bit lower. This can be well offset much larger volume provided by ES6, which basically means the fixed cost amortization going to be less. We anticipate in similar level of ES8.

我認為這個問題的快速答案是它與 ES8 非常相似。我認為按單位計算是因為較低的價格點具有吸引力。按單位計算，邊際貢獻略低一些。這可以很好地抵消 ES6 提供的更大的體積，這基本上意味著固定成本攤銷會更少。我們預計 ES8 的水平類似。

(Speaking in Foreign Language)

（用外語發言）

(Interpreted) I'd like to mention another point is that ES8 and ES6 share the components at a large extent and we also use many supply chain partners for both the ES6 and ES8 at the same time so it means that ES8 and ES6 volume growth significantly improve their gross margin of both of the models.

（解釋）我想提的另一點是，ES8和ES6在很大程度上共享組件，並且我們還同時為ES6和ES8使用許多供應鏈合作夥伴，因此這意味著ES8和ES6的銷量增長兩種型號的毛利率均顯著提高。

Vincent Ha of Deutsche Bank.

德意志銀行的文森特·哈。

Earlier Louis mentioned that we currently have 12 new house and also 36 service centers already on the ground. Now just want to get a quick summary or target of how many new houses or service centers in terms of network that we plan to achieve by the end of this year and probably by the end of next year? And what would that be implying to the operating expense trend which is the SG&A trend going forward?

早些時候路易斯提到，我們目前有 12 個新房子和 36 個服務中心已經到位。現在只想快速總結一下或目標，即我們計劃在今年年底或明年年底之前實現多少個新房屋或服務中心的網絡？這對運營費用趨勢（即未來的 SG&A 趨勢）意味著什麼？

(Speaking in Foreign Language)

（用外語發言）

(Interpreted) This year we'll have the one addition NIO house, this will open around December in Dongguan and next year we will open more new houses. According to the sales plan, we think currently it will be around 20 to 30 new houses, but we will adjust this plan according to the sales status and to the order of the ES6 where we'll have a detailed plan for the first quarter of the next year.

（解說）今年我們會增加一處NIO house，這個會在12月份左右在東莞開業，明年我們還會開更多的新房子。根據銷售計劃，我們認為目前大約是20到30套新房，但是我們會根據銷售情況和ES6的訂單來調整這個計劃，第一季度我們會有詳細的計劃。下一年。

In terms of the service network, as we mentioned that we have already delivered our ES8 in over 170 cities. We think it's going to more for the ES6 and so we have the authorized services centers, we think we will evaluate the existing market and adopt the most effective way to deploy our servicing network.

在服務網絡方面，正如我們提到的，我們已經在170多個城市交付了ES8。我們認為ES6的作用會更大，因此我們有授權的服務中心，我們認為我們將評估現有市場並採用最有效的方式來部署我們的服務網絡。

We are quite confident this is the efficiency.

我們非常有信心這就是效率。

And for the last part of your question, the new houses will cost about 1.5 million to set up because these aren't going to be in Beijing and Shanghai. They'll be in little bit smaller cities, 1.5 million to 2 million. That's the cost and operating cost will be a little bit less than that for these city.

對於你問題的最後一部分，新房的建造成本約為150萬美元，因為這些新房不會建在北京和上海。他們將居住在較小的城市，大約有 150 萬到 200 萬。這就是成本和運營成本會比這些城市低一點。

Now the quick second question is could you also update us on the percentage of customer who is opting for the battery leasing option and also the battery swapping coverage service? Because some key question that I've been getting from some investors is that their concern is that if the battery swapping option is getting really, really popular, we may run into a risk of having a big stock of replacement batteries and that could put some pressure on our cash utilization. Could you give us an update on that?

現在，第二個問題是，您能否向我們介紹一下選擇電池租賃選項和電池更換覆蓋服務的客戶百分比？因為我從一些投資者那裡得到的一些關鍵問題是，他們擔心的是，如果電池更換選項變得非常非常受歡迎，我們可能會面臨大量更換電池庫存的風險，這可能會導致一些對我們的現金使用造成壓力。您能給我們介紹一下最新情況嗎？

I'll answer the easy part. The flexed figures on a percentage of user to take that on our releasing is 73% by the end of Q3 and I don't have the percentage number for battery swapping but our estimates around 6%.

我來回答簡單的部分。到第三季度末，我們發佈時採用這一方案的用戶百分比的靈活數字為 73%，我沒有電池更換的百分比數字，但我們估計約為 6%。

(Interpreted) (Speaking in Foreign Language)

（口譯）（外語發言）

(Interpreted) Just like Louis mentioned, we have already got over 10,000 one-click power services and the most of the power services is delivered by the power truck.

（解說）正如Louis提到的，我們已經獲得了超過10,000個一鍵式電力服務，其中大部分電力服務是由電力卡車提供的。

And in terms of the situation, we are quite unaffected in terms of the home charging installation because we have a [76%] (corrected by company after the call) of users who can install the home chargers and [data] suggest that the average income and the status of the home charging facilities is must better than we expected. This can also help us to reduce the infrastructure investment.

就情況而言，我們在家庭充電安裝方面並沒有受到影響，因為我們有[76%]（由公司在通話後更正）的用戶可以安裝家庭充電器，並且[數據]表明平均收入和家庭充電設施的狀況肯定比我們想像的要好。這也可以幫助我們減少基礎設施的投資。

(Interpreted) (Speaking in Foreign Language)

（口譯）（外語發言）

This is a holistic solution because we noticed that in some cities, users do not need to use their car right away when the car is out of power, so it means that we can use the power truck or the [factory charging] facilities to solve the users' issues. But for other highways, we noticed that users would like to have a fast access and they would like to get their cars back very soon.

這是一個整體的解決方案，因為我們注意到在一些城市，用戶在汽車沒電的時候並不需要立即使用他們的汽車，所以這意味著我們可以使用電源車或[工廠充電]設施來解決用戶的問題。但對於其他高速公路，我們注意到用戶希望快速通行，並且希望很快取回自己的汽車。

It's quite different from those cities. So it means that this will affect power swap deployment strategy. In urban areas, we do need to deploy a lot of a power swap stations, but we would like to deploy more power swap stations in the highways. For example, in the Yangtze River Delta and the Pearl Delta, we would like to deploy more power swap stations, but this can also help us to control the cost, because in those highways, we just need to rent three parking spaces to build the power swap stations. And we do not need to do any kind of civil constructions. So we think this can help us to control the cost and we just need to evaluate the growth of users and the scope of users to come up with a detailed plan in terms of the power swap deployment.

和那些城市有很大不同。所以這意味著這將影響電力交換部署策略。在城市地區，我們確實需要部署很多換電站，但我們希望在高速公路上部署更多的換電站。比如在長三角、珠三角，我們想部署更多的換電站，但這也可以幫助我們控製成本，因為在那些高速公路上，我們只需要租三個停車位就可以建設換電站。電力交換站。我們不需要做任何土木建築。所以我們認為這可以幫助我們控製成本，我們只需要評估用戶的增長和用戶的範圍就可以在換電部署方面提出詳細的計劃。

We monitor this very closely. As William said, it depends on the demand. As of September 30th, we're in 16 cities with power swap and delivered over 30 swap stations, but it depends on occurring need. We were pleasantly surprised that over 70% of people are installing home chargers, which is the best solution.

我們非常密切地關注這一情況。正如威廉所說，這取決於需求。截至9月30日，我們已在16個城市開展換電工作，交付了30多個換電站，但這取決於實際需求。我們驚喜地發現，超過 70% 的人正在安裝家用充電器，這是最好的解決方案。

And also, the power trucks are quite heavily used, so if that meets their need, then that's fine. So we were basically went and delivered the best service by monitoring consumer and our users' demand and feedback. So we won't overbuild, but we want to make sure we meet their charging needs.

而且，動力卡車的使用量相當大，所以如果能滿足他們的需求，那就沒問題了。因此，我們基本上是通過監控消費者和用戶的需求和反饋來提供最好的服務。所以我們不會過度建設，但我們希望確保滿足他們的充電需求。

Paul Gong of UBS.

瑞銀集團的保羅·龔。

I've two questions, the first is regarding the orders, did I recall right that at this moment, you have about 5,000 active backlog after 5,300 of delivery? Does that means some earlier orders who has paid the RMB5,000 have actually cancel the order? Is that the right understanding?

我有兩個問題，第一是關於訂單，我是否記得正確，目前，在 5,300 份交貨後，你們還有大約 5,000 份活躍積壓訂單？這是否意味著一些之前支付了5000元的訂單實際上已經取消了訂單？這是正確的理解嗎？

And also, given right now the order intake rate is roughly 50 to 80 per day. Does that mean the intake and the delivery in the next two months is roughly on par to each other? Is that the right understanding?

而且，目前的訂單接收率約為每天 50 至 80 個。這是否意味著未來兩個月的攝入量和交付量大致持平？這是正確的理解嗎？

Yes it depends on obviously how many people do cancel. Do you're right, Paul, that some of the people, the original people who put in the RMB5,000 deposits that cancelled, because they didn't want to wait so long. As you recall, our ES8 was delayed by several months and so some of these orders date back to last December, early January. We do have a number of cancellations.

是的，這顯然取決於有多少人取消預訂。保羅，你說得對嗎，有些人，原來存入人民幣 5000 元存款的人取消了，因為他們不想等這麼久。你還記得嗎，我們的 ES8 被推遲了幾個月，所以其中一些訂單可以追溯到去年 12 月、1 月初。我們確實有很多取消的情況。

But as far as the order backlog, we've delivered over 5,300 cars and the 45,000 production order deposit rate is over 5,500. So we're pretty comfortable that we'll be able to deliver between 10,000 and 11,000 cars in the next couple of months.

但就積壓訂單而言，我們已交付超過5,300輛汽車，45,000輛生產訂單定金率超過5,500。因此，我們對未來幾個月能夠交付 10,000 至 11,000 輛汽車感到非常滿意。

Our facility is producing very well, so that's the issue. And then every day, we're receiving between 50 and 80 or so new orders for the 5,000 refundable deposits, but that one is subject to cancellation, obviously.

我們的工廠生產得很好，所以這就是問題所在。然後每天，我們都會收到 50 到 80 個左右的新訂單，其中 5,000 筆可退還押金，但顯然該訂單可能會被取消。

So if I place an order today, I expect to receive the car within the next two months. Is that the right expectation?

因此，如果我今天下訂單，我預計會在接下來的兩個月內收到汽車。這是正確的期望嗎？

Not currently, because the founder's editions need to be delivered first, the first 10,000. So you can probably get it within three or four months at most.

目前還不行，因為創始人的版本需要首先交付，即前 10,000 個。所以你最多三四個月就可以拿到。

But once we clear the founder's edition, the first 8,000 or 9,000 cars, then we'll begin to speed it up. And that's why we've put in the new equipment, so we can produce cars as an order by order basis in the Hefei plant. It's a made to order basis.

但一旦我們清除了創始人的版本，即前 8,000 或 9,000 輛汽車，我們就會開始加快速度。這就是我們投入新設備的原因，這樣我們就可以在合肥工廠按訂單生產汽車。這是按訂單生產的。

My second question is regarding the founder's edition and also the relatively cheaper ones. Do we expect the [Fed] margin derive from these founder's edition and the subsequent models, or do you expect similar profit contributions per units? How do we think about these different margins--

我的第二個問題是關於創始人的版本以及相對便宜的版本。我們是否期望[美聯儲]利潤率源自這些創始人的版本和後續模型，或者您是否期望每單位有類似的利潤貢獻？我們如何看待這些不同的利潤——

--I think the newer cars, the orders after the founder's edition should have slightly a higher margin, because the founder's edition, we're giving as special. They're sold for RMB 448,000 even though they're really equivalent to 548,000 with low options. So the other ones are made to order; the ones who picked the options will have slightly higher gross margins.

--我認為較新的汽車，創始人版之後的訂單應該有稍微更高的利潤，因為創始人版，我們給予特別。它們的售價為人民幣 448,000 元，儘管選擇較少的情況下它們實際上相當於 548,000 元。所以其他的都是定做的；選擇這些選項的人將獲得略高的毛利率。

I think one thing I want to add is that the margin for the base model plus the option versus the fully loaded founder's version, their margins is quite similar. But obviously, it's a function of the option take rate.

我想我想補充的一件事是，基本模型加選項的利潤與滿載創始人版本的利潤非常相似。但顯然，它是期權採用率的函數。

Maybe for the base model plus options, there are going to be more users who take our high end option like NOMI. Maybe that's going to contribute lot of the margins to our product for sure. But I think we will see as incoming orders from those new users to order base model plus option come in, we're going to see the data. That's going to become more clearer to us.

也許對於基本型號加上選項，將會有更多的用戶選擇我們像 NOMI 這樣的高端選項。也許這肯定會為我們的產品帶來很大的利潤。但我認為，隨著這些新用戶收到訂單基礎模型加選項的訂單，我們將看到數據。這對我們來說將會變得更加清晰。

So at this moment, you fully expect similar margin now for the base plus options as a blended average versus a founder's edition, is that about the similar margins, that's right?

因此，此時此刻，您完全期望基礎加選項的利潤率與創始人版本的混合平均值相似，是不是相似的利潤率，對嗎？

Similar. I think it may be slight lower, but again, we need to see the incoming order and then we can perform a proper analysis and we will be in a better position to tell.

相似的。我認為它可能會稍微低一些，但同樣，我們需要查看傳入的訂單，然後我們可以進行適當的分析，我們將能夠更好地判斷。

(Operator instructions)

（操作員說明）

There are no further questions. Now, I'd like to turn the call back over to the Company for closing remarks.

沒有其他問題了。現在，我想將電話轉回公司進行總結髮言。

Thank you once again for joining us today for the conference call. If you have any further questions, please feel free to contact our IR team and also [TPG], the Company's IR partner. Thank you very much.

再次感謝您今天參加我們的電話會議。如果您有任何其他問題，請隨時聯繫我們的投資者關係團隊以及公司的投資者關係合作夥伴 [TPG]。非常感謝。

This concludes this conference call. You may now disconnect your line.

本次電話會議到此結束。您現在可以斷開線路。