蔚來 (NIO) 2019 Q2 法說會逐字稿

Hello, ladies and gentlemen.

女士們，先生們，您好。

Thank you for standing by for NIO's Inc.

感謝您對 NIO's Inc. 的支持。

Second Quarter 2019 Earnings Conference Call.

2019 年第二季度收益電話會議。

(Operator Instructions) Today's conference call is being recorded and will last approximately 1 hour.

（操作員說明）今天的電話會議正在錄製中，將持續大約 1 小時。

I'll now turn the call over to your host, Miss Jade Wei, Senior Director of Investor Relations of the company.

我現在將電話轉給您的主持人，公司投資者關係高級總監 Jade Wei 小姐。

Please go ahead, Jade.

請繼續，傑德。

Good evening, and good morning, everyone.

大家晚上好，早上好。

Thanks for joining NIO's Second Quarter 2019 Earnings Conference Call.

感謝您參加 NIO 2019 年第二季度收益電話會議。

The company's financial and operating results were published in the press release yesterday and are posted on the company's IR website at ir.nio.com.

公司的財務和經營業績在昨天的新聞稿中公佈，並發佈在公司的 IR 網站 ir.nio.com 上。

On today's call, we have Mr. William Li, Founder, Chairman of the Board and Chief Executive Officer; Mr. Louis Hsieh, our Chief Financial Officer; and Mr. Nick Wang, our VP of Finance.

在今天的電話會議上，我們有創始人、董事會主席兼首席執行官 William Li 先生；我們的首席財務官 Louis Hsieh 先生；以及我們的財務副總裁 Nick Wang 先生。

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.

在我們繼續之前，請注意今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款作出的前瞻性陳述。

Forward-looking statements involve inherent risks and uncertainties.

前瞻性陳述涉及固有的風險和不確定性。

As such, the company's actual results may be materially different from the views expressed today.

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 certain filings of the company with the U.S. Securities and Exchange Commission.

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某些文件中。

The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

公司不承擔任何更新任何前瞻性陳述的義務，除非適用法律要求。

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.

另請注意，NIO 的收益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 財務措施的討論。

Please refer to NIO's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures.

請參閱 NIO 的新聞稿，其中包含未經審計的非 GAAP 措施與可比 GAAP 措施的對賬。

With that, I will now turn the call over to our CFO, Louis Hsieh, for opening remarks.

有了這個，我現在將把電話轉給我們的首席財務官 Louis Hsieh，讓他發表開場白。

Louis, please?

路易斯，請問？

Thank you, Jade, and good morning and good evening, everyone.

謝謝你，傑德，大家早上好，晚上好。

Before we get started, I would like to take this opportunity to explain our decision to cancel the original call scheduled on September 24 and why we are having this call now.

在我們開始之前，我想藉此機會解釋一下我們決定取消原定於 9 月 24 日舉行的電話會議的決定，以及為什麼我們現在要召開這個電話會議。

We have made significant positive progress in NIO China funding projects with certain parties.

我們與某些方在 NIO 中國資助項目方面取得了重大積極進展。

As you can imagine we are in a very sensitive period during which we are not at liberty to disclose the confidential information related to those projects, which led us to initial decision to cancel the original call on September 24.

你可以想像，我們正處於一個非常敏感的時期，在此期間我們不能隨意披露與這些項目相關的機密信息，這導致我們最初決定取消 9 月 24 日的原始電話會議。

Further, we believe the Q2 earnings release distributed yesterday provided a good update on the company's operations and financial performance.

此外，我們認為昨天發布的第二季度財報很好地更新了公司的運營和財務業績。

This is a very fast-moving and fluid situation with many advisers helping to navigate this period of time, and it has not been easy to find a path that is best for everyone.

這是一個非常快速和多變的情況，有許多顧問幫助度過這段時間，要找到最適合每個人的道路並不容易。

However, after receiving numerous investors inquiries since the original call cancellation, we ultimately decided that resuming our original plan to hold the call provides more transparency and serves the interest of our investing community better.

然而，在最初的電話會議取消後收到了大量投資者的詢問後，我們最終決定恢復我們最初的電話會議計劃以提供更高的透明度並更好地服務於我們投資界的利益。

As it relates to the call, please understand that we will not be able to disclose any specific information or answer any questions regarding the NIO China funding projects today.

由於涉及電話會議，請理解我們今天將無法透露任何具體信息或回答有關蔚來中國資助項目的任何問題。

We will disclose further information when the projects reach a stage that will subject -- that would subject us to a disclosure obligation.

當項目達到將受制於——這將使我們承擔披露義務的階段時，我們將披露更多信息。

With this, I will turn the call over to William Li for our business highlights.

有了這個，我將把電話轉給 William Li，了解我們的業務亮點。

William?

威廉？

Thank you, Louis.

謝謝你，路易斯。

Thanks to everyone who is in our call today.

感謝今天參加我們電話會議的每一個人。

I will speak mainly in Chinese and [Miss Eve Tang] will interpret for me.

我主要用中文發言，[Miss Eve Tang] 會為我翻譯。

(foreign language)

（外語）

[Interpreted] In the second quarter of 2019, NIO delivered 3,553 vehicles, including 3,140 ES8; our 6- and 7-seater high-performance electric flagship SUV and 413 ES6; our 5-seater high-performance premium smart electric SUV, which commenced user deliveries in late June.

【解讀】2019年第二季度，蔚來汽車交付3553輛，其中ES8 3140輛；我們的 6 座和 7 座高性能電動旗艦 SUV 和 413 ES6；我們的 5 座高性能高端智能電動 SUV，於 6 月下旬開始向用戶交付。

In the third quarter, we expected to deliver between 4,200 and 4,400 vehicles and bring our cumulative deliveries of ES8 and ES6 to over 23,000 by end of September to users in over 270 cities throughout China.

在第三季度，我們預計將交付 4,200 至 4,400 輛汽車，到 9 月底，我們將向中國 270 多個城市的用戶累計交付 ES8 和 ES6 超過 23,000 輛。

As of today, our ES8 and ES6 users have driven more than 250 million kilometers.

截至今天，我們的 ES8 和 ES6 用戶已駕駛超過 2.5 億公里。

And to support our users under both, NIO Power has completed more than 200,000 charges through our "One Click for Power" services.

為了支持我們在這兩種情況下的用戶，NIO Power 通過我們的“一鍵充電”服務完成了超過 200,000 次充電。

(foreign language)

（外語）

[Interpreted] We achieved our second quarter delivery results against a backdrop of four factors.

[解讀]我們在四個因素的背景下取得了第二季度的交付結果。

First, continued overall weakness in the Chinese auto market, which saw a 14.3% drop in passenger vehicle wholesale sales from a year earlier.

首先，中國汽車市場整體持續疲軟，乘用車批發銷量同比下降 14.3%。

Second, there is competitive discounting among premium auto brands with data showing that average selling price in this segment has dropped 20% to 25% compared to peak levels.

其次，高端汽車品牌之間存在競爭性折扣，數據顯示該細分市場的平均售價較峰值下降了20%至25%。

Third, electric vehicle subsidy reductions is starting from late March and again, in late June, which affected demand for electric vehicles.

第三，電動汽車補貼從 3 月下旬開始減少，6 月下旬再次減少，這影響了電動汽車的需求。

And lastly, slowing consumer discretionary spending as a result of the microeconomic (sic) [macroeconomic] uncertainties surrounding U.S.-China trade tensions.

最後，由於圍繞美中貿易緊張局勢的微觀經濟 (sic) [宏觀經濟] 不確定性，消費者可自由支配支出放緩。

(foreign language)

（外語）

[Interpreted] Despite the overall environment, for the first 8 months of 2019, sales of our ES8 ranked first in China's premium electric SUV market.

【解讀】儘管大環境不佳，2019年前8個月，我們ES8的銷量在中國高端電動SUV市場排名第一。

ES8 was the only electric vehicle among the other 9 (inaudible) models in top 10 of the overall premium mid to large SUV market.

ES8 是整體高端中大型 SUV 市場前 10 名中其他 9 款（聽不清）車型中唯一的電動車。

(foreign language)

（外語）

[Interpreted] We started deliveries of our ES6 in late June.

[解讀] 我們在 6 月下旬開始交付 ES6。

Since then, we have received broad-based positive reviews on the ES6 from both media and our users, particularly for its outstanding driving experience, extended driving range and competitive design features.

從那時起，我們就收到了媒體和用戶對 ES6 的廣泛正面評價，尤其是其出色的駕駛體驗、更長的續航里程和具有競爭力的設計功能。

We have seen growth of our order backlog accelerating in the last 4 weeks as we started to roll out a more expansive sales network, and more importantly, as more and more ES6 users act as our unofficial brand ambassadors and spread favorable word-of-mouth.

隨著我們開始推出更廣泛的銷售網絡，更重要的是，隨著越來越多的 ES6 用戶充當我們的非官方品牌大使並傳播良好的口碑，我們看到過去 4 週訂單積壓的增長速度加快.

From the production perspective, we will begin producing and delivering the ES6 standard version at more competitive retail prices at end of September.

從生產的角度來看，我們將在 9 月底以更具競爭力的零售價格開始生產和交付 ES6 標準版。

In addition, starting in October, we will begin delivering the ES6 and ES8 with an 84 kilowatt hour battery pack, extending their NEDC driving range to 510 kilometers and to 430 kilometers, respectively.

此外，從 10 月開始，我們將開始交付配備 84 千瓦時電池組的 ES6 和 ES8，將它們的 NEDC 續航里程分別延長至 510 公里和 430 公里。

Going forward, we will continue to enhance product competitiveness and strengthen sales by further advancing our software and autonomous driving technologies.

展望未來，我們將通過進一步推進我們的軟件和自動駕駛技術，繼續提升產品競爭力並加強銷售。

(foreign language)

（外語）

[Interpreted] We believe in the commitment to long-term competitiveness, supported by cutting-edge technology, outstanding products and excellent services.

[解讀]我們相信以尖端技術、卓越產品和卓越服務為支撐的長期競爭力承諾。

We will continue to invest in leading technology and currently have filed over 4,200 patents and in Q2, our new pilot had achieved a comprehensive Level 2 plus ADAS after version release and update.

我們將繼續投資領先的技術，目前已經申請了超過4200項專利，在第二季度，我們的新試點在版本發布和更新後已經實現了全面的Level 2+ADAS。

Furthermore, as of August, NIO and NIO ES8 both ranked first in brand and in product quality accordingly according to research by J.D. Power on China's new energy vehicle user experience.

此外，截至8月，根據J.D.Power對中國新能源汽車用戶體驗的研究，蔚來和蔚來ES8在品牌和產品質量上均排名第一。

Our users have given us an average rating of 4.9 out of 5 for hundreds of thousands services received

對於我們收到的數十萬項服務，我們的用戶給我們的平均評分是 4.9 分（滿分 5 分）

(foreign language)

（外語）

[Interpreted] In response to these challenging market conditions, we are aggressively expanding our sales efforts to accelerate orders, taking comprehensive measures to reduce our costs across the organization and improve overall operational efficiency of the company.

[解讀]為應對這些充滿挑戰的市場環境，我們積極擴大銷售力度以加速訂單，採取綜合措施降低我們整個組織的成本並提高公司的整體運營效率。

Louis will share more details on these initiatives later in the call.

Louis 將在稍後的電話會議中分享有關這些舉措的更多細節。

Louis, please go ahead.

路易斯，請繼續。

Thank you, William.

謝謝你，威廉。

Facing the challenges in China's auto industry, we are focusing our sales initiatives in 3 areas: creating retail points of sales, called NIO spaces; strengthening regionally-driven promotions; and implementing commercial leasing options for corporate users and fleet operators.

面對中國汽車行業的挑戰，我們將銷售舉措集中在三個方面：創建零售銷售點，稱為 NIO 空間；加強區域驅動的促銷活動；為企業用戶和車隊運營商實施商業租賃選擇。

First, NIO space.

第一，NIO空間。

We are expanding our sales network through NIO-branded sales zones called NIO spaces.

我們正在通過名為 NIO 空間的 NIO 品牌銷售區擴展我們的銷售網絡。

NIO spaces, which are normally less than 200 square meters, will allow us to quickly, cost-effectively and meaningfully increase the number of sale points in the market.

NIO 的空間通常小於 200 平方米，這將使我們能夠快速、經濟且有意義地增加市場上的銷售點數量。

They will primarily located in shopping centers and malls, communities with high traffic flow.

它們將主要位於購物中心和購物中心、人流量大的社區。

The majority of the NIO spaces will be invested by our selected partners.

NIO 的大部分空間將由我們選定的合作夥伴投資。

By the end of 2019, we aim to have established around 200 NIO spaces in over 100 cities across China.

到2019年底，我們的目標是在中國100多個城市建立約200個蔚來空間。

These will vastly expand our sales footprint throughout China, where more potential users can see, touch, feel and drive and truly enjoy the exhilarating ES6 and ES8 driving experiences.

這些將極大地擴大我們在中國的銷售足跡，讓更多潛在用戶能夠看到、觸摸、感受和駕駛，真正享受到令人振奮的 ES6 和 ES8 駕駛體驗。

Second, we are significantly strengthening our sales approaches by encouraging more regionally driven promotions.

其次，我們通過鼓勵更多區域驅動的促銷活動來顯著加強我們的銷售方式。

In September, we introduced the free battery swapping policy, and it is attracting a large group of potential users to the cities with existing swapping stations.

9月，我們推出了免費換電政策，吸引了一大批潛在用戶到已有換電站的城市。

In Beijing, ICE vehicle users have opportunities to buy an ES8 or ES6 with extra incentives.

在北京，內燃機車用戶有機會購買 ES8 或 ES6 並享受額外優惠。

In addition, we offer more than 8 different auto financing programs with 7 banks to our users, which significantly diversifies the solutions available to meet different users' cash needs.

此外，我們通過7家銀行為用戶提供超過8種不同的汽車融資方案，大大豐富了可滿足不同用戶現金需求的解決方案。

We see these actions being implemented.

我們看到這些行動正在實施。

We have seen order growth accelerating significantly since September -- beginning of September.

自 9 月以來，我們已經看到訂單增長顯著加速 - 9 月初。

We're also driving sales through selling cars to corporate users and fleet operators.

我們還通過向企業用戶和車隊運營商銷售汽車來推動銷售。

Moreover, we introduced a membership subscription program in which users have opportunities to rent and drive our products for 1 month or more to fully experience the product and services.

此外，我們推出了會員訂閱計劃，用戶有機會租用和駕駛我們的產品 1 個月或更長時間，以充分體驗產品和服務。

In addition to these sales initiatives, we are implementing comprehensive cost control measures across the organization.

除了這些銷售舉措外，我們還在整個組織內實施全面的成本控制措施。

These measures primarily focus on increasing efficiencies and streamlining operations within our sales and service network, in our R&D functions as well as reducing our headcount.

這些措施主要側重於提高我們的銷售和服務網絡、研發職能的效率和簡化運營，以及減少我們的員工人數。

First, our sales and service network.

首先，我們的銷售和服務網絡。

As mentioned previously, we are expanding our office and sales network by adding NIO spaces.

如前所述，我們正在通過添加 NIO 空間來擴展我們的辦公和銷售網絡。

NIO spaces are cost way to implement significant and larger footprint in the market and are much less capital intensive compared to our flagship NIO houses.

NIO 空間是在市場上實現顯著和更大足蹟的成本方式，並且與我們的旗艦 NIO 房屋相比，資本密集度要低得多。

Turning to R&D.

轉向研發。

We remain committed to advance driving technologies and development of our second generation platform, NP2.

我們仍然致力於推進驅動技術和我們第二代平台 NP2 的開發。

In the future, our R&D investments will focus on mass production applications.

未來，我們的研發投入將集中在量產應用上。

We will actively seek strategic partnership opportunities, advanced technology development as a means to prudently manage our spending in this category.

我們將積極尋求戰略合作機會、先進技術開發，以此作為謹慎管理我們在該類別中的支出的一種方式。

We'll also be reducing costs by further optimizing the size of the workforce.

我們還將通過進一步優化勞動力規模來降低成本。

After extensive internal reviews, we have determined that our headcount can be further reduced.

經過廣泛的內部審查，我們確定我們的員工人數可以進一步減少。

We target to reduce our headcount to around 7,800 by the end of the third quarter from over 9,900 in January 2019, and we expect further headcount reductions by the end of this year through both restructuring and spinning off some business units.

我們的目標是到第三季度末將員工人數從 2019 年 1 月的 9,900 多人減少到 7,800 人左右，我們預計到今年年底將通過重組和剝離一些業務部門進一步裁員。

With this, I will now turn the call over to our Vice President of Finance, Nick Wang, to provide the financial details for this quarter.

有了這個，我現在將把電話轉給我們的財務副總裁 Nick Wang，以提供本季度的財務細節。

Nick, please go ahead.

尼克，請繼續。

Thank you, Louis.

謝謝你，路易斯。

I will now go over some of our financial results for the second quarter of 2019.

我現在將回顧我們 2019 年第二季度的一些財務業績。

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.

請注意本次電話會議的時間長度，我將在這裡介紹財務重點，並鼓勵聽眾參考我們的收益新聞稿，該新聞稿發佈在網上以了解更多詳細信息。

Our total revenues in the second quarter of 2019 were RMB 1.5 billion or USD 219.7 million, representing a decrease of 7.5% from the first quarter of 2019.

我們 2019 年第二季度的總收入為 15 億元人民幣或 2.197 億美元，比 2019 年第一季度下降 7.5%。

Our total revenue are made of 2 parts: vehicle sales and other sales.

我們的總收入由兩部分組成：汽車銷售和其他銷售。

Vehicle sales in the second quarter of 2019 were RMB 1.4 billion or USD 206.1 million, representing a decrease of 7.9% from the first quarter of 2019, mainly due to the decrease in sales volume caused by electric vehicle subsidiary reduction announced in late March and the slowdown of macroeconomics in China, which has been exacerbated by the U.S.-China trade war.

2019年第二季度汽車銷售額為14億元人民幣或2.061億美元，較2019年第一季度下降7.9%，主要是由於3月下旬宣布的電動汽車子公司減少導致銷量下降以及中美貿易戰加劇了中國宏觀經濟放緩。

Other sales in the second quarter of 2019 were RMB 94 million or USD 13.7 million, representing a decrease of 2% from the first quarter of 2019, mainly attributed to the sales decline in charging piles, which was in line with decline in vehicle sales.

2019年第二季度其他銷售額為人民幣0.94億元或1370萬美元，較2019年第一季度下降2%，主要是充電樁銷售額下滑，與整車銷量下滑一致。

Cost of sales in the second quarter of 2019 was RMB 2 billion or USD 293.2 million, representing an increase of 8.8% from the first quarter of 2019, mainly caused by accrued recall costs in relation to the company's voluntary recall of 4,803 vehicles announced on June 27, 2019.

2019年二季度銷售成本為20億元人民幣或2.932億美元，較2019年一季度增長8.8%，主要是公司6月宣布主動召回4,803輛汽車的預提召回費用所致2019 年 27 日。

Total recall costs accrued in the second quarter of 2019 were RMB 339.1 million or USD 49.4 million, including RMB 283.3 million or USD 41.3 million recorded in cost of vehicles sales and RMB 55.8 million or USD 8.1 million recorded in cost of other sales, respectively.

2019 年第二季度應計總召回成本為 3.391 億元人民幣或 4940 萬美元，其中車輛銷售成本分別為 2.833 億元人民幣或 4130 萬美元，其他銷售成本分別為 5580 萬元人民幣或 810 萬美元。

Excluding the accrued recall costs, cost of sales in the second quarter was RMB 1.7 billion or USD 243.8 million, representing a decrease of 9.6% from the first quarter of 2019.

不包括應計召回成本，第二季度銷售成本為人民幣 17 億元或 2.438 億美元，比 2019 年第一季度下降 9.6%。

Gross margin in the second quarter of 2019 was negative 33.4% compared with negative 13.4% in the first quarter of 2019.

2019 年第二季度毛利率為負 33.4%，而 2019 年第一季度為負 13.4%。

Excluding accrued recall costs, gross margin in the second quarter was negative 10.9%.

不包括應計召回成本，第二季度的毛利率為負 10.9%。

More specifically, vehicle margin in the second quarter of 2019 was negative 24.1%, decrease from negative 7.2% in the first quarter of 2019, mainly driven by accrued recall costs.

更具體地說，2019 年第二季度的汽車利潤率為負 24.1%，低於 2019 年第一季度的負 7.2%，主要受應計召回成本的推動。

Excluding accrued recall costs, vehicle margin in the second quarter was negative 4%.

不包括應計召回成本，第二季度的汽車利潤率為負 4%。

Research and development expenses in the second quarter of 2019 were RMB 1.3 billion or USD 189.4 million, increasing 20.6% sequentially, primarily attributed to the increase in rigorous testing activities of ES6 before its mass production in second quarter of 2019.

2019 年第二季度研發費用為人民幣 13 億元或 1.894 億美元，環比增長 20.6%，這主要歸因於 ES6 在 2019 年第二季度量產前的嚴格測試活動增加。

Selling, general and administrative expenses in the second quarter of 2019 were RMB 1.4 billion or USD 207 million, increasing 7.7% sequentially primarily driven by the company's marketing expenditures on the Shanghai Auto Show and ES6 test drive campaign in the second quarter.

2019 年第二季度的銷售、一般和管理費用為 14 億元人民幣或 2.07 億美元，環比增長 7.7%，主要受公司第二季度上海車展和 ES6 試駕活動的營銷支出推動。

Loss from operation in the second quarter of 2019 was RMB 3.2 billion or USD 469.9 million, increasing 23.2% sequentially.

2019 年第二季度運營虧損為 32 億元人民幣或 4.699 億美元，環比增長 23.2%。

Excluding accrued recall costs and expenses, loss from operations in the second quarter was RMB 2.9 billion or USD 418 million.

不計應計召回成本和費用，第二季度的運營虧損為人民幣 29 億元或 4.18 億美元。

Our net loss was RMB 3.3 billion or USD 478.6 million in the second quarter of 2019, increasing 25.2% from the first quarter of 2019.

我們在 2019 年第二季度的淨虧損為 33 億元人民幣或 4.786 億美元，比 2019 年第一季度增長 25.2%。

Basic and diluted net loss per ADS in the second quarter were both RMB 3.23 or $0.47.

第二季度每份 ADS 的基本和攤薄淨虧損均為 3.23 元人民幣或 0.47 美元。

Our balance cash and cash equivalents, restricted cash and short-term investment was RMB 3.5 billion or USD 503.4 million as of June 30, 2019.

截至 2019 年 6 月 30 日，我們的現金及現金等價物餘額、受限制現金和短期投資為人民幣 35 億元或 5.034 億美元。

And now for our business outlook.

現在是我們的業務前景。

For third quarter of 2019, the company expects deliveries of vehicles to be between 4,200 and 4,400 units, representing an increase of approximately 18.2% to 23.8% from the second quarter of 2019.

公司預計 2019 年第三季度汽車交付量在 4,200 至 4,400 輛之間，較 2019 年第二季度增長約 18.2% 至 23.8%。

Total revenues to be between RMB 1,593 million or USD 232 million and RMB 1.663 billion or USD 242.2 million, representing an increase of approximately 5.6% to 10.3% from the second quarter of 2019.

總收入將在 15.93 億元人民幣或 2.32 億美元至 16.63 億元人民幣或 2.422 億美元之間，比 2019 年第二季度增長約 5.6% 至 10.3%。

This concludes our prepared remarks.

我們準備好的發言到此結束。

I will now turn the call over to the operator to facilitate our Q&A sessions.

我現在將把電話轉給接線員，以方便我們的問答環節。

Please?

請？

(Operator Instructions) First questions comes from the line of Feng Wei from CICC.

（操作說明） 第一個問題來自中金公司的馮偉。

I have 2 questions.

我有兩個問題。

The first question is about your cash flow from financing activities.

第一個問題是關於融資活動的現金流量。

Would you please share the progress of your capital raising in China and besides the Tencent instrument deal, did you try other financing options?

能否請您分享一下您在中國融資的進展情況，除了騰訊工具外，您是否嘗試過其他融資方式？

That's the first question.

這是第一個問題。

And my second question is about the sales orders of the ES8 and ES6.

我的第二個問題是關於ES8和ES6的銷售訂單。

We have observed very strong momentum of ES6.

我們觀察到 ES6 的發展勢頭非常強勁。

The ES6 sales declined after recall.

ES6 召回後銷量下降。

Would you please share your thoughts as far as the sales outlook of ES8 and ES6.

請您分享您對ES8和ES6銷售前景的看法。

Thank you, Feng.

謝謝你，馮。

I think, on the first question, we're not going to take that question for now because it relates to the China financing projects.

我認為，關於第一個問題，我們暫時不回答這個問題，因為它涉及到中國的融資項目。

You do know that from the release that we do have USD 200 million convertible bond deal.

你確實從新聞稿中知道我們確實有 2 億美元的可轉換債券交易。

So that one is the one that is already disclosed.

所以那個是已經公開的那個。

Regarding to the ES8, ES6 orders, William, do you want to address that question, please?

關於 ES8、ES6 的訂單，William，你想解決這個問題嗎？

Okay.

好的。

(foreign language)

（外語）

[Interpreted] Thanks for your questions.

[已翻譯] 感謝您的提問。

The sales of ES8 in July and August is quite challenging.

ES8在7、8月的銷量頗具挑戰。

That's a fact and this is the same challenge faced by other EV companies.

這是事實，這與其他電動汽車公司面臨的挑戰相同。

Because with the subsidy reduction starting from the 26th of June, we can see the majority of EV sales have declined, and this is the challenge for the whole industry.

因為從6月26日開始補貼下調，我們可以看到大部分電動汽車的銷量都在下降，這是對整個行業的挑戰。

(foreign language)

（外語）

[Interpreted] As you can see in July and August, we didn't take any initiative to provide rebates or the price reductions for the ES8 users.

【解讀】如大家所見，7、8月份，我們並沒有主動為ES8用戶提供返利或者降價。

Because you can see there is a transaction price for the users of ES8, the price of ES8 actually increased by 10%.

因為大家可以看到ES8的用戶是有成交價的，ES8的價格其實漲了10%。

But just now, I had mentioned that the price of those premium cars in the market actually has reduced.

但是剛才我說了，現在市面上的那些高檔車其實已經降價了。

So this means that they will affect the sales of our cars in the July and August time.

所以這意味著他們將影響我們汽車在七八月份的銷量。

(foreign language)

（外語）

[Interpreted] We are quite confident about the competitiveness of the ES8 product and the service.

【解讀】我們對ES8產品和服務的競爭力很有信心。

As you can see in September, the lease and the sales of ES8 are picking up in the market.

正如你所看到的那樣，9 月份，ES8 的租賃和銷售在市場上都在回暖。

And in October, we're going to deliver the 84 kilowatt hour battery version ES8.

10月份，我們將交付84千瓦時電池版ES8。

We believe with this we can actually help us to extend the drive range of ES8, which has been an issue for ES8 in the past, and this can help us improve the competitiveness of our ES8.

我們相信有了這個我們實際上可以幫助我們延長 ES8 的驅動範圍，這是過去 ES8 的問題，這可以幫助我們提高 ES8 的競爭力。

The specific segment for ES8, we believe, it can actually compete with other EV cars and the premium SUV.

ES8 的特定細分市場，我們相信它實際上可以與其他 EV 汽車和高級 SUV 競爭。

(foreign language)

（外語）

[Interpreted] From the January to August, the sales of our ES8 ranked as the top 3 for the 7-seater and the 6-seater SUV market segment.

【解讀】1-8月，ES8銷量穩居7座和6座SUV細分市場前三。

(foreign language)

（外語）

[Interpreted] Thank you.

[翻譯] 謝謝。

Next questions comes from the line of Bin Wang from Crédit Suisse.

接下來的問題來自瑞士信貸銀行的王斌。

(foreign language) I actually have 2 questions.

（外語）我其實有2個問題。

The number one is about recall because originally, we see the company claimed the recall costs were mainly due to the battery supplier, which is CATL.

第一個是關於召回，因為最初，我們看到該公司聲稱召回成本主要是由於電池供應商，即寧德時代。

But now, we've seen results starting -- most of the cost go to NIO, more than half, or is there reason that lead to such a difference.

但是現在，我們已經看到了結果——大部分成本都花在了 NIO 身上，超過一半，或者是有什麼原因導致了這種差異。

That's for the first one question.

這是第一個問題。

The second one is about the margin outlook because we've seen the organic margin, gross margin in the second quarter actually has been improving compared to our first quarter, but we see two new developments.

第二個是關於利潤率前景，因為我們已經看到了有機利潤率，與第一季度相比，第二季度的毛利率實際上一直在提高，但我們看到了兩個新的發展。

The number one is that at NIO would open the NIO [space] (corrected by company after the call) over with third party partners to share part of the profit with the third party.

第一，蔚來會把NIO【空間】（電話後公司更正）開放給第三方合作夥伴，分享一部分利潤給第三方。

And secondly things is that NIO sales do more promotion since the third quarter such as the free auto insurance, auto finance and free battery swap.

其次，自第三季度以來，NIO 銷售進行了更多促銷，例如免費汽車保險、汽車金融和免費電池更換。

So what's the margin guidance because previously we guide the margin will improve in the second half.

那麼利潤率指導是多少，因為之前我們指導利潤率將在下半年有所改善。

William (foreign language)?

威廉（外語）？

Okay, (foreign language)

好的，（外語）

(foreign language)

（外語）

Translates the (inaudible)...

翻譯（聽不清）...

[Interpreted] Okay, to answer the...

[已翻譯] 好的，回答...

And Nick, do you want to do the growth margin question?

尼克，你想回答增長率問題嗎？

I think they should translate the first part.

我認為他們應該翻譯第一部分。

The battery recall.

電池召回。

[Interpreted] we have pretty clear responsibility with the battery supply chain partners regarding the issues and they had been made clear in the announcement in the national markets monitoring bureau.

[解讀]我們與電池供應鏈合作夥伴在這些問題上有非常明確的責任，他們在國家市場監管局的公告中已經明確。

But you need to understand, our relationship with the battery supply chain partner is a long term one.

但你需要明白，我們與電池供應鏈合作夥伴的關係是長期的。

We have agreed on how we are going to cover the cost of the battery recall.

我們已經就如何承擔電池召回的費用達成一致。

But the battery recall is a very significant cost because it will cover the new battery pack production, logistics and execution.

但電池召回是一筆非常可觀的成本，因為它將涵蓋新電池組的生產、物流和執行。

We believe that the share of the responsibility is actually quite reasonable and that the cost segmentation is also quite reasonable.

我們認為責任的分擔其實是比較合理的，成本的劃分也是比較合理的。

(foreign language)

（外語）

[Interpreted] But the responsibility is quite clear regarding the battery recall issue.

[解讀]但關於電池召回問題，責任很明確。

Yes.

是的。

This is Nick.

這是尼克。

I'm happy to answer the second question about margins.

我很高興回答關於利潤率的第二個問題。

I'm going to speak only in English for the sake of the audience.

為了聽眾，我將只用英語發言。

Actually in Q2, you're right, Wang Bin.

其實在Q2，你是對的，王斌。

We accrued our portion of the battery recall related costs at a roughly RMB 283 million in the cost of vehicle sales.

我們將電池召回相關成本的一部分計入汽車銷售成本中，約為人民幣 2.83 億元。

If you exclude accrued battery recall costs, the company's overall gross margin was around negative 11% in Q2 but out of it, actually our vehicle margin, vehicle sales margin is negative 4%, so better, okay?

如果你排除應計電池召回成本，公司第二季度的整體毛利率約為負 11%，但除此之外，實際上我們的汽車利潤率，汽車銷售利潤率為負 4%，更好，好嗎？

Both margins were better than Q1 margins essentially.

這兩個利潤率本質上都好於第一季度的利潤率。

But we also expect we're going to deliver more vehicles in the second half of 2019, which I believe will certainly help the gross margin from the scale economy, especially production related.

但我們也預計我們將在 2019 年下半年交付更多車輛，我相信這肯定會有助於規模經濟的毛利率，尤其是與生產相關的毛利率。

However, we also expect some mix margin trend coming from the model mix and options.

但是，我們也預計模型組合和選項會帶來一些混合利潤率趨勢。

Thus, you can call it the controllable element but market-driven, okay?

因此，您可以稱其為可控因素但市場驅動，好嗎？

With that, the gross margin will highly depend on the volume of the deliveries and unit price, including the options of each vehicles we sell.

因此，毛利率將在很大程度上取決於交付量和單價，包括我們出售的每輛車的選擇權。

So with our best estimation so far, the gross margin will still be negative for the rest of the year, I think conservatively speaking.

因此，根據我們迄今為止的最佳估計，我認為保守地說，今年餘下時間的毛利率仍將為負。

So that's my answer for this margin-related part.

這就是我對這個保證金相關部分的回答。

Next question comes from the line of Ryan Brinkman from JP Morgan.

下一個問題來自摩根大通的 Ryan Brinkman。

The first one relates to gross margin and the context of a softer volume environment.

第一個與毛利率和銷量環境疲軟的背景有關。

So now backing out the higher warranty costs in 2Q with the underlying margin of negative 4% or so, have been roughly in line with your expectations?

那麼現在以負 4% 左右的基礎利潤率剔除第二季度較高的保修成本，是否大致符合您的預期？

And how should investors expect vehicle gross margin to trend going forward given this backdrop of lower industry and NIO volume?

在行業和 NIO 銷量下降的背景下，投資者應該如何看待汽車毛利率的趨勢？

Nick, you want to take that?

尼克，你想接受嗎？

I think -- yes, you're absolutely right.

我認為——是的，你是絕對正確的。

Q2, the vehicle gross margin is negative 4%.

Q2整車毛利率為負4%。

Again, like you said, in the second half, we probably still get to see a pretty tough market, but we also see a potential up take in our volumes, I think.

再次，就像你說的，在下半年，我們可能仍然會看到一個相當艱難的市場，但我認為我們也看到我們的銷量有可能上升。

So overall, the current estimation range for the vehicle margin in Q3 is going to be around, I would say, vehicle margin I mean, around negative 6% and Q4 is between negative 6% to negative 10%, conservatively speaking.

因此，總體而言，保守地說，目前對第三季度車輛利潤率的估計範圍將在負 6% 左右，第四季度在負 6% 到負 10% 之間。

Okay.

好的。

Great.

偉大的。

And my second question just relates...

我的第二個問題只是關於......

And Ryan (inaudible)...

還有 Ryan（聽不清）...

Yes?

是的？

Let me finish up.

讓我說完。

We're going to start delivering the base model of the ES6 at the end of this month, probably next week.

我們將在本月底（可能是下週）開始交付 ES6 的基本模型。

So the ES6 base model will have a lower-margin if it doesn't have all the options.

因此，如果沒有所有選項，ES6 基本模型的利潤率將較低。

It'll be counter weighted somewhat by the 84-kilowatt battery versions that we'll start shipping next month for Q4, which will have a higher gross margin.

我們將在下個月為第四季度開始發貨的 84 千瓦電池版本將在一定程度上抵消它，這將具有更高的毛利率。

And then as Nick said earlier, it depends on the uptake of the option.

然後正如 Nick 之前所說，這取決於對選項的接受程度。

The options are very high margin.

期權的保證金非常高。

So but volume will definitely help the vehicle gross margins.

因此，銷量肯定會幫助汽車毛利率。

That's very helpful.

這很有幫助。

Just my last question is on the distribution strategy.

我的最後一個問題是關於分銷策略。

If deliveries remain fewer than anticipated for longer, could that cause you to consider potential adjustments to distribution strategy, particularly with regards to the presumably largely fixed cost NIO houses?

如果交付量長期低於預期，這是否會促使您考慮對分銷策略進行潛在調整，特別是關於可能主要是固定成本的 NIO 房屋？

Can you talk about the relative costs and capabilities of a NIO space compared to a NIO house?

與 NIO house 相比，您能談談 NIO 空間的相對成本和功能嗎？

Well, the NIO space sometimes are prepaid by partners and also, the cost will be less than RMB 1 million if we had to do it all ourselves on average.

那麼蔚來的空間有時候是合作夥伴預付的，而且，如果全部自己來，成本平均不到100萬元。

So it's very economical.

所以非常經濟。

It's also in a high-traffic area.

它也位於人流量大的區域。

So that's the direction we're going.

這就是我們前進的方向。

The larger NIO houses were done initially to help the company build a brand and to get users into the NIO brand and NIO user experience.

更大的NIO房屋最初是為了幫助公司建立品牌並讓用戶了解NIO品牌和NIO用戶體驗。

So those have 3- to 5-year lease terms.

所以那些有 3 到 5 年的租期。

So they will -- as going forward, you'll see our strategy will be to build more smaller NIO space-type operations and if we renew NIO houses, they won't be as big and as luxurious as the ones that are in the regional ones in Beijing and Shanghai and other large cities.

所以他們會——隨著未來的發展，你會看到我們的戰略將是建立更多更小的 NIO 空間型操作，如果我們更新 NIO 房屋，它們將不會像現在的那樣大和豪華。北京、上海等大城市區域性的。

(foreign language)

（外語）

[Interpreted] I'd like to add a few points about the NIO space.

【解讀】關於NIO空間我想補充幾點。

Our corporation model for the NIO space is different from the traditional dealership or corporation because for us, we still control the touch point and the user relationship in the NIO space.

我們 NIO 空間的公司模式不同於傳統的經銷商或公司，因為對我們來說，我們仍然控制著 NIO 空間中的接觸點和用戶關係。

We have our own fellows directly to serve our users in those NIO space.

我們有自己的伙伴直接為那些 NIO 空間中的用戶服務。

So it means that our distribution strategy will be direct to sales.

所以這意味著我們的分銷策略將直接針對銷售。

We just work with our partners for the allocation of facilities and initial investments at the beginning.

我們只是在一開始就與我們的合作夥伴一起進行設施配置和初始投資。

So basically, the cost is going to be based on the deals that we have made in the NIO spaces.

所以基本上，成本將基於我們在 NIO 領域所做的交易。

Ryan, we're actually very excited about NIO space.

Ryan，我們實際上對 NIO 空間感到非常興奮。

Just as we begin to roll it out in September, we've seen a significant uptake in orders the last 3 weeks.

就在我們 9 月份開始推出它時，我們看到過去 3 週的訂單量顯著增加。

But this whole month of September has been doing much better than July and August.

但整個 9 月的表現比 7 月和 8 月要好得多。

July was quite slow, August a little bit better, and then September is really picking up.

七月很慢，八月好一點，然後九月真的好起來了。

And I think it's very important as we reach touch points.

我認為這在我們達到接觸點時非常重要。

Now by the end of this year, we'll be in over 100 cities and so -- and it's a very cost-effective way for us to increase our reach throughout China's large cities.

現在，到今年年底，我們將進入 100 多個城市等等——這對我們擴大在中國大城市的影響力來說是一種非常具有成本效益的方式。

Next question comes from the line of Dan Galves from Wolfe Research.

下一個問題來自 Wolfe Research 的 Dan Galves。

So I think as a result of the market conditions and kind of the things -- the way things have played out this year, it seems like you have a lot of plans of changes to the business.

所以我認為，由於市場狀況和一些事情——今年事情的發展方式，你似乎有很多改變業務的計劃。

I was wondering and probably, thinking about the business at lower volumes longer-term.

我想知道並且可能會長期考慮業務量較小的業務。

I was wondering if there was any way you could roughly talk to us about, given kind of changes to cost structure that you're planning and changes to distribution strategy.

我想知道您是否可以通過任何方式與我們粗略地談談，考慮到您正在計劃的成本結構變化和分銷策略變化。

Is there a volume level that you believe that you can break even at in the future?

您認為未來可以實現收支平衡的交易量水平是多少？

And how much capital do you think that you need to kind of execute (inaudible) and have a reasonable balance sheet?

您認為需要多少資金才能執行（聽不清）並擁有合理的資產負債表？

Yes, I mean, that's a very good question.

是的，我的意思是，這是一個很好的問題。

I think it's -- we don't have enough data.

我認為這是——我們沒有足夠的數據。

We just started rolling out the NIO spaces.

我們剛剛開始推出 NIO 空間。

And as you know, on the volume side, at the beginning of this year, when we did our forecast for this year, we didn't expect the -- China's auto market has never shrunk, as far as I know, and then it shrunk 14 months in a row.

正如你所知，在銷量方面，今年年初，當我們對今年進行預測時，我們沒想到——據我所知，中國汽車市場從未萎縮，然後它連續縮小14個月。

So we want to see how -- and you also know we just released the new car, ES6.

所以我們想看看如何——你也知道我們剛剛發布了新車 ES6。

So we would like to see how the momentum in the market to sales pick up.

因此，我們希望看到市場銷售勢頭如何回升。

We will do our budgeting at the end of the year.

我們將在年底進行預算編制。

By then, we'll have 3 or 4 months with dozens of NIO spaces to see how the economics work versus a traditional model, and I think is that you're going to see us cut cost significantly, Dan.

到那時，我們將有 3 或 4 個月的時間與數十個 NIO 空間一起看看經濟學與傳統模型相比如何運作，我認為你會看到我們顯著削減成本，Dan。

So you will see a much leaner operation from NIO.

所以你會看到 NIO 的運營更加精簡。

And so I think as the volumes won't be the 120,000, 150,000 that we had talked about actually with these big NIO houses.

因此，我認為數量不會是我們與這些大型 NIO 房屋實際討論過的 120,000、150,000。

The other thing is we have R&D initiatives in place to reduce our battery pack cost significantly, which will come out next year as well.

另一件事是我們制定了研發計劃來顯著降低我們的電池組成本，這也將在明年推出。

So those will all be calculated together as we do budgets, and as we get more (inaudible).

因此，這些都將在我們制定預算時一起計算，並且隨著我們獲得更多（聽不清）。

It's a little bit too early, I'm not trying to avoid your question, but we don't have this budget for next year yet given all these -- the turmoil and all the changes in the market this year.

現在有點太早了，我並不是想迴避你的問題，但考慮到所有這些因素，我們還沒有明年的預算——今年市場的動盪和所有變化。

But give us until the end of the year.

但是給我們直到年底。

That's fair and just a follow-up, if I could is the cash burn -- I was wondering if you could talk to us about kind of the level of prelaunch cost for ES6 in terms of marketing and engineering that may go away in Q3?

這是公平的，只是一個後續行動，如果我可以的話是現金消耗——我想知道你是否可以和我們談談 ES6 在營銷和工程方面的預發布成本水平，這可能會在第三季度消失？

But on the other side, it seems like most of the cash cost for the recall happens in Q3.

但另一方面，召回的大部分現金成本似乎發生在第三季度。

So I mean, maybe just talk to us about -- is there a potential to meaningfully reduce the cash burn that you saw in Q2, in Q3 and Q4?

所以我的意思是，也許只是和我們談談——是否有可能顯著減少您在第二季度、第三季度和第四季度看到的現金消耗？

The answer is yes.

答案是肯定的。

We cannot burn -- we cannot do 3.2 billion in operating loss.

我們不能燒錢——我們不能做 32 億美元的營業損失。

You see a significant reduction in Q3 and a further reduction in Q4.

您會看到第三季度顯著減少，第四季度進一步減少。

we have to do it.

我們必須這樣做。

(inaudible)

（聽不清）

I mean, don't forget, we were to cut headcount from 9,900 down to 7,800 and there's further to come.

我的意思是，不要忘記，我們要將員工人數從 9,900 人減少到 7,800 人，而且還會有進一步的削減。

And we have also have strict expense controls in place.

我們也有嚴格的費用控制。

We're not expanding capital, we are spending capital for NIO spaces but not for a lot of other things.

我們不是在擴張資本，我們是在為 NIO 空間投入資金，而不是為很多其他事情投入資金。

We have not started adding any swap centers, there's not as much cash usage and with a lower headcount, and we also plan to spin-off some noncore businesses as well, which we would disclose as the deals get done.

我們還沒有開始增加任何交換中心，現金使用量沒有那麼多，員工人數也較少，我們還計劃分拆一些非核心業務，我們會在交易完成後披露。

William, did you want to add something?

威廉，你想補充點什麼嗎？

Yes, yes, yes.

對對對。

(foreign language)

（外語）

[Interpreted] Right.

[解釋] 對。

Louis mentioned, right now, we are taking some initiatives to cut down the costs and improve the efficiency.

路易斯提到，目前，我們正在採取一些措施來降低成本和提高效率。

With the ongoing financing projects and the cost reduction of ES6 as well as the initiatives to improve the operational efficiency, we believe that the company will have a sustainable development and operation.

隨著融資項目的推進和ES6成本的降低以及運營效率提升的舉措，我們相信公司將有一個可持續的發展和運營。

(foreign language)

（外語）

[Interpreted] The company has been very transparent over financials including cash flow and cash position.

[解讀]該公司在現金流和現金狀況等財務方面一直非常透明。

We would like the investors community and the media to have a complete and fair view about the company's cash situation.

我們希望投資者社區和媒體對公司的現金狀況有一個完整和公正的看法。

(foreign language)

（外語）

[Interpreted] Recently, some media has reported some inaccurate numbers about our cash situation.

【解讀】最近，一些媒體報導了一些關於我們現金狀況的不准確數字。

In the report, the media mentioned that we have operating loss that is around USD 5.7 billion, which is not accurate, so I'd like to use this opportunity to make some clarifications.

在報導中，媒體提到我們有大約57億美元的經營虧損，這是不准確的，所以我想藉此機會澄清一下。

(foreign language)

（外語）

[Interpreted] In their report they have counted in the accretion on the preferred shares issued to private equity investors prior to the IPO last year.

[解讀]在他們的報告中，他們將去年IPO之前向私募股權投資者發行的優先股的增長計算在內。

Our non-GAAP operating loss was RMB 22 billion, which is significantly lower than the USD 5.7 billion the media has reported.

我們的非美國通用會計準則經營虧損為人民幣 220 億元，遠低於媒體報導的 57 億美元。

Among the RMB 22 billion over 10 billion was spent on R&D average and the projects.

在這220億元人民幣中，超過100億元用於研發平均支出和項目支出。

We have always been considered R&D and user service as our priority for operating investment and other spending.

我們一直將研發和用戶服務作為運營投資和其他支出的優先考慮。

We have filed 4,200 patents globally and build a very strong EV brand in the premium sector.

我們已在全球申請了 4,200 項專利，並在高端領域打造了一個非常強大的電動汽車品牌。

In terms of the service network, we have built a comprehensive service network number nationwide, covering user in 270 cities in China.

在服務網絡方面，我們在全國建立了完善的服務網絡數量，覆蓋全國270個城市的用戶。

(foreign language)

（外語）

[Interpreted] And everyone know that the R&D for the auto industry requires a long lead times.

[解讀]眾所周知，汽車行業的研發需要很長的周期。

We are now committed to developing the NP2 to use the advanced and cutting edge technology and autonomous driving technology in our products.

我們現在致力於開發 NP2，以在我們的產品中使用先進的尖端技術和自動駕駛技術。

We said we have to raise sufficient capital to support our future developments.

我們說我們必須籌集足夠的資金來支持我們未來的發展。

As the only Chinese premium smart EV brand and a very premium global competitive brand, we are very confident that investors will support us.

作為唯一的中國高端智能電動汽車品牌和非常高端的全球競爭品牌，我們非常有信心投資者會支持我們。

Yes, I think -- I found the Bloomberg article very, very insulting.

是的，我認為——我覺得彭博社的文章非常、非常侮辱人。

I mean, the headline was USD 5 billion Loss.

我的意思是，標題是 50 億美元的損失。

As William said, that's not -- they didn't break out the fact that a lot of those were preferred shares pre-IPO that were marked up at the IPO.

正如 William 所說，事實並非如此——他們沒有指出其中很多是 IPO 前的優先股，這些股票在 IPO 時被標記了。

So the real number is closer to USD 3 billion over 4 years.

因此，實際數字在 4 年內接近 30 億美元。

And as William said, most of that is toward R&D.

正如 William 所說，其中大部分用於研發。

So we weren't very happy with the way Bloomberg use that as a headline.

所以我們對彭博將其用作標題的方式不太滿意。

It's not very accurate.

這不是很準確。

Next question comes from the line of Paul Gong from UBS.

下一個問題來自瑞銀的Paul Gong。

I have 2 questions.

我有兩個問題。

The first one is regarding the regional promotion mentioned by Louis.

第一個是關於路易斯提到的區域推廣。

Given this involves a lot of details measures like the battery swap surface and some extra incentive including the financial lease.

鑑於這涉及許多細節措施，如電池交換錶面和一些額外的激勵措施，包括融資租賃。

Can you help us to quantify what is a rough amount per vehicle and is this only applicable to ES8 or it also applies to ES6 as well.

你能幫我們量化每輛車的粗略數量嗎？這只適用於 ES8 還是也適用於 ES6。

This is the first question regarding the incentive.

這是關於激勵的第一個問題。

My second question is regarding the cost cuts on the cost of goods sold, especially for the procurement.

我的第二個問題是關於銷售成本的削減，尤其是採購成本。

Have you renegotiate with your supplier on the cost cuts after the subsidy cuts in late June.

在 6 月下旬補貼削減後，您是否與供應商就成本削減重新談判？

If yes, can you help us to give a rough idea how much has to cuts in the second half versus first half, especially on the battery side.

如果是，您能否幫助我們大致了解下半年與上半年相比需要削減多少，尤其是在電池方面。

William, do you want to discuss the incentives?

威廉，你想討論激勵措施嗎？

And then Nick, you can discuss the financial impact of the battery and the supply chain?

然後尼克，你可以討論電池和供應鏈的財務影響嗎？

(foreign language) William translate.

（外語）威廉翻譯。

(foreign language)

（外語）

Recently, we have launched the free power swaps services to the users if they drive their cars to the power swap station, which has been quite widely welcomed by our users.

近期，我們推出了自駕車到換電站的用戶免費換電服務，受到了用戶的廣泛歡迎。

(foreign language)

（外語）

[Interpreted] Every day, we have around 1,000 users drive their cars to the powers swap stations to use this service.

【解讀】每天，我們有大約1000名用戶將他們的汽車開到換電站使用這項服務。

But as you know, that power swap station cost, mainly includes the construction cost and the renting cost.

但是大家知道，換電站的成本，主要包括建設成本和租賃成本。

The electricity cost is actually quite low.

電費其實很低。

So for 1 power swap, it may cost around 50-kilowatt hours and this means that the cost will be around just RMB 50 and in this calculation it means that every day the additional cost will be around the RMB 50,000.

那麼1次換電，可能需要50千瓦時左右，也就是說成本也就50元左右，這樣算下來，每天的額外成本在5萬元左右。

(foreign language)

（外語）

[Interpreted] Actually, we have a very high home charger installation rate, which is close to 80%.

【解讀】其實我們的家用充電器安裝率非常高，接近80%。

Overall speaking, the free powers swap facilities will not contribute a lot to the company's costs.

整體而言，免費換電設施對公司的成本貢獻不大。

It will not impact on the cost very significantly.

它不會對成本產生非常顯著的影響。

Previous, we have already promised to our users that they can enjoy the inter-city or out of city free power swap services.

此前，我們已經向用戶承諾，可以享受城際或城外免費換電服務。

So this can be considered as part of the cost.

所以這可以算作成本的一部分。

(foreign language)

（外語）

[Interpreted] Compared with our competitor's free super charging services, our experience is much better.

【解讀】與競爭對手的免費超級充電服務相比，我們的體驗要好得多。

(foreign language)

（外語）

[Interpreted] Right now, there is a very popular concept among the users is that they would like to get a house close to the power swap station.

[解讀]現在，在用戶中有一個很流行的概念，就是想在換電站附近買一套房子。

(foreign language)

（外語）

[Interpreted] Thank you for your question.

[已翻譯] 謝謝你的提問。

Nick, do you want to talk about -- I think a lot of the supply chain cost -- we are renegotiating with a lot of suppliers as our volume begin to get larger.

尼克，你想談談 - 我認為很多供應鏈成本 - 隨著我們的數量開始變大，我們正在與許多供應商重新談判。

Second of those, I think the battery pack cost has come down on a year-over-year basis and will continue to go down, we believe, each year on a per kilowatt basis by 10% to 15%.

其次，我認為電池組成本已經同比下降，而且我們相信，每年每千瓦的成本將繼續下降 10% 至 15%。

Nick, is there anything else on the supply?

尼克，還有其他供應嗎？

(foreign language)

（外語）

[Interpreted] In terms of the battery cost we can predict the quarterly battery cost reductions, this is mainly due to the volume increase by the industry and NIO in terms of the battery pack.

【解讀】在電池成本方面，我們可以預測季度電池成本下降，這主要是由於行業和NIO在電池組方面的增長。

Right now, we think from now to the next year, Q4, so we will continue the reduction of the battery cost but right now, I cannot share with you about the specific percentage because we have reached agreement with our supply chain partners regarding this, but we believe that for the next Q3 and Q4, for the next year and Q3 and Q4, we should be able to reach significant cost reduction.

現在，我們認為從現在到明年第四季度，我們將繼續降低電池成本，但現在，我無法與您分享具體百分比，因為我們已經與我們的供應鏈合作夥伴就此達成協議，但我們相信，對於下一個 Q3 和 Q4，明年以及 Q3 和 Q4，我們應該能夠顯著降低成本。

Thank you, Paul.

謝謝你，保羅。

Go ahead, if you want to add.

繼續，如果你想添加。

Yes, Paul.

是的，保羅。

Yes, your first part of your question also involving what's the financial leasing facility.

是的，你問題的第一部分也涉及什麼是融資租賃設施。

Yes, we actually have a very successful financial leasing plan rolled out nationwide with seven partner banks.

是的，我們實際上與七家合作銀行在全國推出了非常成功的融資租賃計劃。

Some of the big commercial banks I mean, in this serves the purpose of attracting a lot of traffic into our showroom and we can see a clear upward trend in the past 2 months and also in terms of per unit cost, is a function of the overall percentage of how many customers pay 100% or take the financial product and how much percentage do they take sort of interest subsidy programs essentially.

我的意思是，一些大型商業銀行的目的是為了吸引大量客流進入我們的陳列室，我們可以看到過去 2 個月的明顯上升趨勢，而且就單位成本而言，是有多少客戶支付 100% 或採取金融產品的總體百分比，以及他們基本上採取利息補貼計劃的百分比。

So namely, we used to have this RMB 100,000 battery leasing program.

也就是說，我們曾經有過這個10萬元的電池租賃項目。

Now, we will replace the majority away, a third-party financial institution, I think financial loans with a similar amount but we actually have a discount Interest subsidy on this.

現在，我們將取代大部分第三方金融機構，我認為金融貸款的金額相似，但實際上我們對此有折扣利息補貼。

So overall, I think the per-unit basis, on a rough estimate, I think it's roughly RMB 10,000 per unit.

所以總的來說，我認為單價，粗略估計，我認為大約是每台10,000元人民幣。

RMB 10,000 per unit?

10000元一個？

Yes, roughly.

是的，大致如此。

Thank you, Paul.

謝謝你，保羅。

Thanks, Nick.

謝謝，尼克。

Operator, is that concludes the hour?

接線員，時間到了嗎？

Yes, certainly.

是的，當然了。

There are no further questions at this time, and the call is around the hour mark, I will turn the call back over to the company for closing remarks.

目前沒有進一步的問題，電話時間已到，我會將電話轉回公司以作結束語。

Okay, thank you, once again, for joining us on this quarter's conference call.

好的，再次感謝您加入我們本季度的電話會議。

We look forward to talking to you next quarter.

我們期待在下個季度與您交談。

Have a good evening or have a good day.

祝你有個美好的夜晚或度過美好的一天。

Good day.

再會。

Thank you very much.

非常感謝你。

Thank you.

謝謝你。

This concludes today's conference call.

今天的電話會議到此結束。

You may now disconnect your line.

您現在可以斷開線路。

Thank you.

謝謝你。