蔚來 (NIO) 2019 Q4 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for NIO Incorporated's fourth quarter and full year 2019 earnings conference call. (Operator Instructions) Today's conference call is being recorded.

女士們、先生們，大家好。感謝您出席蔚來汽車 2019 年第四季度及全年財報電話會議。（操作員指示）今天的電話會議正在錄音。

I will now turn the call over to your host, Mr. Rui Chen, Director of Investor Relations of the company. Please go ahead, Rui.

現在我把電話轉給你們的主持人，公司投資者關係總監陳銳先生。請繼續吧，瑞。

Thank you, Edison. Good evening and good morning everyone. Welcome to NIO's fourth quarter and full year 2019 earnings conference call. The Company's financial and operating results were published in the press release earlier today and are posted at the company's IR website.

謝謝你，愛迪生。大家晚上好，早上好。歡迎參加蔚來汽車 2019 年第四季度及全年財報電話會議。該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，並發佈在該公司的投資者關係網站上。

On today's call, we have Mr. William Li, founder, chairman of the board, and chief executive officer, Mr. Steven Feng, chief financial officer, Mr. Stanley Qu, VP of Finance and Ms. Jade Wei, AVP of Investor Relations.

出席今天的電話會議的有創始人、董事長兼首席執行官李威廉先生，首席財務官馮峰先生，財務副總裁曲志剛先生和投資者關係副總裁魏潔女士。

Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain filings of the Company with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law.

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“安全港”條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。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。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。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 unaudited 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，其中包含未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 the call over to our CEO, Mr. William Li. William, go ahead, please.

現在，我將把電話轉給我們的首席執行官李威廉先生。威廉，請繼續。

(foreign language)

（外語）

Hello, everyone, and thank you for joining our 2019 Q4 earnings call today.

大家好，感謝您今天參加我們的 2019 年第四季度財報電話會議。

(foreign language)

（外語）

We delivered a combined 8,224 ES8 and ES6 vehicles in the fourth quarter of 2019 representing a 71% sequential increase from the prior quarter. Cumulative deliveries of ES8 and the ES6 reached 20,565 in 2019, representing an 81% increase from 2018.

2019 年第四季度，我們總共交付了 8,224 輛 ES8 和 ES6 車輛，環比增長 71%。2019年ES8和ES6累計交付量達到20,565輛，較2018年增長81%。

(foreign language)

（外語）

The COVID-19 has broken out in China since January 2020. The overall sales and deliveries of the auto industry in China are materially impacted, and the passenger vehicle sales in China slumped 41% in total in January and February 2020, compared to the same period last year.

自 2020 年 1 月以來，新冠肺炎 (COVID-19) 在中國爆發。中國汽車行業整體銷量和交付量受到較大影響，2020年1月至2月中國乘用車銷量同比下降41%。

Against this backdrop, NIO has delivered a total of 2,305 vehicles in January and February, which is lower than our target prior to the outbreak.

在此背景下，蔚來1月和2月共交付了2,305輛汽車，低於我們在疫情爆發前的目標。

(foreign language)

（外語）

In response to the microenvironment, on 1 hand, we have actively explored a variety of online channels, including wide streaming platforms, and fully leveraged the well-developed online functions of NIO app to promote online sales. NIO's end-to-end direct sales business process has enabled us to continue our sales efforts during this special time.

針對微環境，一方面，我們積極開拓多種線上渠道，包括廣泛的直播平台，充分利用蔚來APP成熟的線上功能來促進線上銷售。蔚來的端到端直銷業務流程使我們能夠在這個特殊時期繼續進行銷售工作。

On the other hand, from spring festival to now, NIO has maintained 24/7 maintenance and power services through our cloud-based service system to support user's daily usage. Our products and the service system have withdrew due to the arduous test during the outbreak, and won wide recognition of our user community.

另一方面，從春節到現在，蔚來通過雲服務系統維持24/7的維護和供電服務，支持用戶的日常使用。經過疫情期間的艱苦考驗，我們的產品和服務體系已經退出，並贏得了用戶群體的廣泛認可。

Thanks to our loyal user community and the superior word of mouth reputation, recently, orders generated through user referral have reached 69%, much higher than the 45% average user referral rate in 2019.

得益於我們忠實的用戶群體和優越的口碑，近期，通過用戶推薦產生的訂單已達到69%，遠高於2019年45%的平均用戶推薦率。

(foreign language)

（外語）

With the joint efforts of our users and teams, the total number of new production orders reached over 2,100 in the past 30 days, representing 70% of the order growth level in December 2019 as the outbreak gradually brought under control in China. NIO Houses and NIO Spaces are cautiously being reopened with increasing foot traffic in stores. Based on the current trend, we would hope the daily NIO order rate to return to the level of last December and April.

在用戶和團隊的共同努力下，過去30天新增生產訂單總數超過2100個，相當於2019年12月中國疫情逐漸得到控制時訂單增長水平的70%。隨著商店人流量的增加，蔚來之家和蔚來空間正在謹慎地重新開放。從目前的趨勢來看，我們希望蔚來的日訂單率能夠恢復到去年12月和4月份的水平。

(foreign language)

（外語）

In terms of production, the work resumption has been postponed across China, which has impacted our production and supply chain to various extents. Although our Hefei plant resumed the production on February 10 and the production of most of our supply chain partners have basically returned to normal, partners located in Hefei province will still need some time to recover, constrained by the limited supply capacity, we expect the aggregate deliveries of Q1 2020 to be around 3,400 to 3,600. We have been monitoring the supply chain very closely and have seen positive changes every day. We do see the supply chain recovery has speeded up since the mid of March. So we hope that the production capacity can return to normal in April.

生產方面，全國各地複工推遲，對我們的生產供應鏈造成不同程度的影響。雖然我們的合肥工廠已於2 月10 日恢復生產，且大部分供應鏈合作夥伴的生產已基本恢復正常，但位於合肥省內的合作夥伴仍需要一段時間才能恢復，但受限於供應能力有限，我們預計總計2020 年第一季度的交付量約為 3,400 至 3,600 輛。我們一直在非常密切地監控供應鏈，每天都看到積極的變化。我們確實看到自三月中旬以來供應鏈復甦速度加快。所以我們希望4月份產能能夠恢復正常。

(foreign language)

（外語）

In the first 2 quarters, the safety of our employees and users remain our top priority. Thanks to the efforts of our users and teams, we have weathered the storm and passed the toughest time. In particular, thousands of new users joined various public benefit activities during the outbreak and made contributions to the prevention and control initiatives in Hefei and other regions. Looking forward to 2020, there are many challenges facing the China and the global economies, which is bound to significantly affect the overall auto industry in China. We believe that NIO will stand out from the competition in this difficult market environment. We are confident about our product competitiveness, integrated online and offline operations and innovative business model based on user enterprise. After the organizational adjustments and the efficiency improvements in 2019, our teams are well prepared to achieve the 2020 sales target, continuously improved gross margin and systematically optimize the overall operational efficiency.

前兩個季度，員工和用戶的安全仍然是我們的首要任務。在用戶和團隊的努力下，我們渡過了難關，度過了最艱難的時期。特別是，疫情期間，數以千計的新用戶參與了各類公益活動，為合肥等地區的防控工作做出了貢獻。展望2020年，中國和全球經濟面臨諸多挑戰，這勢必對中國整體汽車行業產生重大影響。我們相信，蔚來汽車將在這個困難的市場環境中從競爭中脫穎而出。我們對我們的產品競爭力、線上線下一體化運營以及基於用戶企業的創新商業模式充滿信心。經過2019年的組織調整和效率提升，我們的團隊為實現2020年的銷售目標做好了充分準備，不斷提高毛利率，系統優化整體運營效率。

(foreign language)

（外語）

First, facing the pressure of the outbreak, we are still confident to achieve the preset sales target for 2020. NIO product family will be more competitive and diverse in 2020. In April, NIO will start the delivery of the all new ES8, a smart electric flagship SUV. The all-new ES8 has made nearly 188 improvements, and most importantly, the NEDC range will be virtually improved. In September, we will kick off the delivery of the EC6, a smart electric coupe SUV. In the fourth quarter, over 100-kilowatt hour battery pack will be launched into the market. The iterative product experience is the most important cornerstone for NIO to maintain our leading position in the premium smart electric SUV market in China. In addition, we'll continue our efforts in sales network expansion and build more NIO Spaces, which are estimated to be around 200 by the end of this year. User referral is another important driver of sales growth with the growing user base and industry-leading word-of-mouth reputation, we believe that the orders generated from user referrals will increase at an even faster rate in the future.

首先，面對疫情壓力，我們仍有信心完成2020年預設的銷售目標。2020年蔚來產品家族將更加具有競爭力和多樣化。4月，蔚來將開始交付全新智能電動旗艦SUV ES8。全新ES8做出了近188項改進，最重要的是，NEDC續航里程將得到實質提升。9月份，我們將啟動智能電動轎跑SUV EC6的交付。第四季度，100千瓦時以上電池組將投放市場。迭代的產品體驗是蔚來保持中國高端智能電動SUV市場領先地位的最重要基石。此外，我們還將繼續努力拓展銷售網絡，建設更多蔚來空間，預計今年年底將達到200個左右。用戶推薦是銷售增長的另一個重要推動力，隨著用戶基礎的不斷擴大和行業領先的口碑，我們相信未來用戶推薦產生的訂單將以更快的速度增長。

(foreign language)

（外語）

Second, gross margin improvement is one of the top objectives of NIO in 2020. With the supply chain optimization, continuous cost reduction of the battery pack and manufacturing cost saving per vehicle brought forward by production scaling up and management optimization, we have confidence to achieve our goals that our gross margin can turn positive in the second quarter and reach 2 digits by the end of the year.

其次，毛利率提升是蔚來2020年的首要目標之一。隨著供應鏈的優化、電池組成本的持續降低以及產能規模化和管理優化帶來的每輛車製造成本的節省，我們有信心實現第二季度毛利率轉正並達到2的目標。到年底的數字。

(foreign language)

（外語）

Third, we'll continuously improve operational efficiency. We have made significant organizational optimization and business adjustment in 2019. The overall headcount has reduced from close to 10,000 at the beginning of 2019 to less than 7,000. Due to one-off expenses in Q4, the operating loss in the fourth quarter of 2019 was higher than that of the third quarter. We have basically finished all the order adjustments which has laid a solid foundation for 2020. In 2020, the company has set up very strict expense control and efficiency improvement targets, and implemented rigorous measures in daily operations accordingly. We are pleased to see encouraging results year-to-date and expect around 35% expense reduction compared to the prior quarter given under the pressure of the outbreak.

三是不斷提高運行效率。2019年我們進行了重大的組織優化和業務調整。整體員工人數從2019年初的近1萬人減少到不足7000人。由於第四季度一次性費用的影響，2019年第四季度的運營虧損高於第三季度。我們已經基本完成了所有的訂單調整，為2020年打下了堅實的基礎。2020年，公司製定了非常嚴格的費用控制和效率提升目標，並在日常運營中落實了嚴格的措施。我們很高興看到今年迄今為止的令人鼓舞的業績，並預計在疫情壓力下，費用將比上一季度減少約 35%。

(foreign language)

（外語）

Lastly, with regards to all the financing efforts, NIO issued USD 435 million convertible notes in February and March to several unaffiliated Asia-based investment fund to support the company's daily operations and business development. at this moment, we have already finished all the private placement.

最後，在所有融資方面，蔚來汽車在2月和3月向多家非附屬亞洲投資基金發行了4.35億美元的可轉換票據，以支持公司的日常運營和業務發展。目前，我們已經完成了全部定向增發工作。

(foreign language)

（外語）

On February 25, we signed the collaboration framework agreement with Hefei Municipal Government. The JAC NIO manufacturing plant for ES8, ES6 and the EC6 is located in Hefei, which enjoys a strong automotive and digital legacy and resources, and it's one of the core cities and transportation hubs in the Yangtze River Delta economic zone. Under the framework agreement, NIO plans to establish NIO China headquarters in Hefei and Hefei government plans to provide resources and funding support for the long-term growth of NIO China. Both parties expect to sign the definitive agreement before the end of April.

2月25日，我們與合肥市政府簽署合作框架協議。江淮蔚來ES8、ES6、EC6生產工廠位於合肥，擁有深厚的汽車和數字化底蘊和資源，是長三角經濟區的核心城市和交通樞紐之一。根據框架協議，蔚來計劃在合肥設立蔚來中國總部，合肥市政府計劃為蔚來中國的長期發展提供資源和資金支持。雙方預計在四月底之前簽署最終協議。

(foreign language)

（外語）

Thank you for your support. With that, I will now turn the call over to Steven to provide the financial details for the quarter. Steven, please go ahead.

感謝您的支持。現在，我將把電話轉給史蒂文，以提供本季度的財務詳細信息。史蒂文，請繼續。

Thank you, William. I will now go over our key financial results for the fourth quarter of 2019. As being mindful of the length of this call, I encourage listeners to refer to our earnings press release, which is posted online for our full-year results and other additional details. Our total revenues in the fourth quarter were RMB 2.85 billion or USD 409.1 million, representing an increase of 55.1% quarter-over-quarter.

謝謝你，威廉。我現在將回顧 2019 年第四季度的主要財務業績。考慮到本次電話會議的長度，我鼓勵聽眾參考我們的收益新聞稿，該新聞稿發佈在網上，了解我們的全年業績和其他詳細信息。第四季度總收入為28.5億元人民幣（4.091億美元），環比增長55.1%。

Our total revenues are made of 2 parts: vehicle sales and other sales. Vehicles sales in the fourth quarter were RMB 2.68 billion or USD 385.5 million, representing increase of 54.8% quarter-over-quarter and accounted for 94% of total revenues in this quarter. The increase in vehicle sales quarter-over-quarter was attributed to higher deliveries achieved from our existing user referrals and the expansion of our sales network through the continued launch of NIO Spaces in the fourth quarter of 2019.

我們的總收入由兩部分組成：車輛銷售和其他銷售。第四季度汽車銷售額為26.8億元人民幣（3.855億美元），環比增長54.8%，佔本季度總收入的94%。汽車銷量環比增長歸因於我們現有用戶推薦實現了更高的交付量，以及通過2019年第四季度繼續推出NIO Spaces擴大了我們的銷售網絡。

Other sales in the fourth quarter were RMB 164.4 million or USD 23.6 million, representing an increase of 59.0% quarter-over-quarter. The increase in other sales over last quarter was mainly attributed to the increase of home chargers installed and accessories sold, which was in line with improvement of vehicle sales in the fourth quarter.

第四季度其他銷售額為1.644億元人民幣（2360萬美元），環比增長59.0%。其他銷售額較上季度增長主要歸因於家用充電器安裝量和配件銷售量的增加，這與第四季度汽車銷量的改善一致。

Cost of sales in the fourth quarter were [RMB 3.10 billion] (corrected by company after the call) or USD 445.6 million, representing an increase of 50.7% quarter-over-quarter. The increase in cost of sales was mainly driven by the increase of delivered volume of the ES6 and ES8.

第四季度銷售成本為[人民幣31.0億元]（公司在電話會議後修正）或4.456億美元，環比增長50.7%。銷售成本的增加主要是由於ES6和ES8的交付量增加所致。

Gross margin in the fourth quarter was negative 8.9% compared with negative 12.1% in the third quarter of 2019. The improvement in gross margin over last quarter was mainly driven by the improvement of vehicle margin. More specifically, vehicle margin in the fourth quarter was negative 6.0% compared with a negative 6.8% in the third quarter of 2019.

第四季度毛利率為負8.9%，而2019年第三季度毛利率為負12.1%。毛利率較上季度改善主要是由於整車利潤率改善所致。更具體地說，第四季度汽車利潤率為負 6.0%，而 2019 年第三季度為負 6.8%。

The improvement of vehicle margin was mainly due to improved efficiency, driven by the increase of production and delivered volumes of ES6 and ES8. R&D expenses in the fourth quarter were RMB 1.03 billion representing a decrease of 32.3% year-over-year, an increase of 0.3% quarter-over-quarter.

整車利潤率的改善主要是由於ES6和ES8的產量和交付量增加帶動效率提高。第四季度研發費用為人民幣10.3億元，同比下降32.3%，環比增長0.3%。

The slight increase in R&D expenses over last quarter,was primarily attributed to the incremental design and development costs for EC6 and all new ES8 launched in December 2019, offset by less employee compensation due to a reduced number of R&D personnel.

研發費用較上季度略有增加，主要歸因於 EC6 和 2019 年 12 月推出的所有新 ES8 的設計和開發成本增量，但被研發人員數量減少導致的員工薪酬減少所抵消。

SG&A expenses in the fourth quarter were RMB 1.55 billion representing a decrease of 20.5% year-over-year, an increase of 32.8% quarter-over-quarter. The increase in SG&A expenses over last quarter was primarily attributed to increased marketing and promotion activities and additional costs on the optimization of our organization and sales network offset by less employee compensation due to a reduced number of selling, general and administrative employees.

第四季度SG&A費用為人民幣15.5億元，同比下降20.5%，環比增長32.8%。銷售、一般和管理費用較上季度增加主要歸因於營銷和促銷活動的增加以及優化我們的組織和銷售網絡的額外成本，但由於銷售、一般和行政員工數量減少而導致員工薪酬減少，從而抵消了這些成本。

Loss from operations in the fourth quarter was RMB 2.83 billion representing a decrease of 18.0% year-over-year, an increase of 17.3% quarter-over-quarter.

第四季度經營虧損人民幣28.3億元，同比下降18.0%，環比增加17.3%。

Share-based compensation expenses in the fourth quarter were RMB 51.2 million, representing a decrease of 63.9% year-over-year and a decrease of 27.3% quarter-over-quarter.

第四季度股權激勵費用為人民幣5120萬元，同比下降63.9%，環比下降27.3%。

The decrease in share-based compensation expenses over last quarter was primarily attributed to the continuous decline of employee numbers and impact of part of their share-based compensation expenses being recognized within the accelerated manner, out of which the expenses decreased gradually over the vesting period.

股權激勵費用較上季度減少主要是由於員工數量持續下降以​​及部分股權激勵費用加速確認影響，其中等待期內費用逐漸減少。

Net loss was RMB 2.86 billion in the fourth quarter, represented a decrease of 18.2% year-over-year and an increase of 7.6% quarter-over-quarter. Net loss attributable to NIO's ordinary shareholders in this quarter was RMB 2.89 billion, represent a decrease of 17.7% year-over-year and increase of 7.3% quarter-over-quarter.

第四季度淨虧損為人民幣28.6億元，同比下降18.2%，環比增加7.6%。本季度歸屬於蔚來普通股股東的淨虧損為28.9億元人民幣，同比下降17.7%，環比增加7.3%。

Basic and diluted net loss per ADS in the fourth quarter were both RMB 2.81 or $0.40 per ADS. Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, non-GAAP adjusted basic and diluted net loss per ADS were both RMB 2.73 or $0.39 per ADS in the fourth quarter.

第四季度每股美國存託股的基本和攤薄淨虧損均為人民幣 2.81 元或每股美國存託股 0.40 美元。不包括股份補償費用和可贖回非控股權益對贖回價值的增加，第四季度每份美國存託股的非公認會計原則調整後基本和稀釋淨虧損均為人民幣2.73 元或每份美國存托股0.39 美元。

Our balance of cash and cash equivalents, restricted cash and short-term investment was RMB 1.06 billion as of December 31, 2019.

截至2019年12月31日，我們的現金及現金等價物、受限制現金和短期投資餘額為人民幣10.6億元。

And now for our business outlook. As William mentioned, for the first quarter of 2020, the company expects deliveries to be between 3,400 and 3,600 vehicles, representing a decrease of approximately 56.2% to 58.7% from fourth quarter of 2019. The expected decrease is primarily attributed to the constrained production and delivery impacted by the novel coronavirus outbreak.

現在談談我們的業務前景。正如William提到的，該公司預計2020年第一季度的交付量將在3,400至3,600輛之間，較2019年第四季度減少約56.2%至58.7%。預期下降主要是由於新型冠狀病毒爆發影響生產和交付受到限制。

The company also expects the total revenue of first quarter 2020 to be between RMB 1.21 billion to RMB 1.27 billion, or between USD 173 million to USD 183 million. This would represent a decrease of approximately 55.3% to 57.6% from the fourth quarter of 2019. This business outlook reflects the company's concurrent and the preliminary view on the (inaudible) situation and market conditions, which is subject to change. Now this concludes our prepared remarks.

該公司還預計2020年第一季度的總收入將在12.1億元人民幣至12.7億元人民幣之間，即1.73億美元至1.83億美元之間。這將比 2019 年第四季度下降約 55.3% 至 57.6%。本業務展望反映了公司對（聽不清）形勢和市場狀況的同步和初步看法，可能會發生變化。現在我們準備好的發言就到此結束。

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

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）

First question comes from the Lei Wang of CICC.

第一個問題來自中金公司王磊。

William and Steven, Lei Wang speaking from CICC.

中金公司的 William 和 Steven、Lei Wang 發表講話。

Congratulations on the recent financing activities, I do believe that means a lot. So basically, I got 2 questions. So in the business outlook, it guides a quarter delivery between the 3,400 to 3,600 in the first quarter of 2020. So do you might provide some guidance on the sales target over this year? So will that be something close to like 30,000 units?

祝賀最近的融資活動，我相信這意義重大。基本上，我有兩個問題。因此在業務展望上，其指導2020年第一季度的季度交付量在3,400至3,600之間。那麼您能否對今年的銷售目標提供一些指導？那麼這個數字會接近 30,000 台嗎？

That's the first question.

這是第一個問題。

[Foreing language)

[外語]

Thanks for your questions. In our previous remarks, we have provided the guidance for Q1, that is 3,400 to 3,600 but just like we mentioned, this is mainly affected by the production capacity. Although our Hefei plant has resumed the production on February 10.

感謝您的提問。在我們之前的評論中，我們提供了第一季度的指導，即 3,400 至 3,600 輛，但正如我們提到的，這主要受到產能的影響。雖然我們合肥工廠已於2月10日恢復生產。

But the production capacity is still limited by the supply capacity, especially for those partners located in Hubei province for the February and March delivery.

但產能仍受到供應能力的限制，特別是對於那些位於湖北省、2月和3月交貨的合作夥伴來說。

Although at this moment, most of the partners have resumed their production, but we still have some limitations and constraints regarding the part supply. So for the partners in Hubei, they will still need some time to recover. The main challenge for the delivery in January is because of the production constraints. Because after we produce our products, we will need to ship our products to the delivery centers and also make the appointment with our users to deliver the product to them.

雖然目前大部分合作夥伴已經恢復生產，但我們在零部件供應方面仍然存在一些限制和限制。所以對於湖北的合作夥伴來說，他們還需要一些時間來恢復。一月份交貨的主要挑戰是生產限制。因為我們生產完產品後，我們需要將產品運送到配送中心，並與用戶預約將產品交付給他們。

For the first quarter delivery, the main reason of the constraint is because of the production. But just like I mentioned, in the past 30 days, our orders have been increased and right now, the new orders have accumulated for over 2,100 or close to 2,200.

對於第一季度的交付來說，制約的主要原因是生產。但正如我剛才提到的，在過去的30天裡，我們的訂單有所增加，目前，新訂單已經累計超過2100個，接近2200個。

It means that the daily new orders is around 70. So for the level, it's actually quite similar or actually close to the 70% of the December level last year. At this moment, we're seeing the orders is ramping up. So we're quite confident about our annual sales target. Because our model is made-to-order.

這意味著每天的新訂單量在70個左右。所以對於這個水平來說，它實際上與去年 12 月水平的 70% 非常相似或接近。目前，我們看到訂單正在增加。所以我們對我們的年度銷售目標還是很有信心的。因為我們的模型是按訂單生產的。

So if we can resume the normal production, then it means that we can deliver our products to the users at a much faster rate. Every day, we have accumulated some new orders from the users. And at this moment, we have around 5,000 order backlogs. I cannot give you a specific number regarding our annual sales target. But according to all the data that I have shared, we are quite confident to achieve our internal annual sales target.

所以如果我們能夠恢復正常生產，那麼就意味著我們能夠以更快的速度將我們的產品交付給用戶。每天，我們都會積累一些來自用戶的新訂單。目前，我們有大約 5,000 個訂單積壓。我無法向您提供有關我們年度銷售目標的具體數字。但根據我分享的所有數據，我們非常有信心實現內部年度銷售目標。

Your next question.

你的下一個問題。

(Operator Instructions)

（操作員說明）

Hi operator, we think that Lei was dropped. so please continue with next analyst, please. Thank you.

嗨，接線員，我們認為 Lei 已被丟棄。請繼續下一位分析師的發言。謝謝。

All right. Sure. Thank you. Our next question is from the line of Mr. Dan Galves of Wolfe Research.

好的。當然。謝謝。我們的下一個問題來自沃爾夫研究中心的丹·加爾維斯先生。

So volume was much higher in Q4 versus Q3, but the gross margin only improved a small amount. Can you talk about some of the things that maybe offset the impact of better scale?

因此，第四季度的銷量比第三季度高得多，但毛利率僅略有提高。您能談談一些可能抵消規模擴大帶來的影響的事情嗎？

Yes, Stanley, please answer this question.

是的，斯坦利，請回答這個問題。

This is Stanley. As you mentioned, the volume increased in the fourth quarter but the gross margin slightly increased. The main reason is about the volume mix of our products. We sold all ES6 base version in the fourth quarter. So the selling price is a little bit lower than the ES8. So that's the main reason for the gross margin slightly increasing in fourth quarter. So yes.

這是斯坦利。正如您提到的，第四季度銷量有所增加，但毛利率略有上升。主要原因是我們產品的數量結構。我們在第四季度銷售了所有 ES6 基礎版本。所以售價比ES8要低一點。這是第四季度毛利率小幅增長的主要原因。所以是的。

Okay, that makes sense. And then as you're looking ahead, I think that you said that you're expecting double-digit gross margin by the end of the year, but maybe you could clarify that comment? Can you give us a sense of what volume level that would require to get to that double-digit gross margin target? And if you can achieve that, would that support cash outflow of neutral? Or what do you think that there would still be a cash outflow once you get to double-digit margins on the vehicles?

好吧，這是有道理的。然後，當您展望未來時，我認為您說過預計到今年年底毛利率將達到兩位數，但也許您可以澄清這一評論？您能否讓我們了解一下要達到兩位數毛利率目標需要多大的銷量水平？如果你能做到這一點，這是否會支持中性的現金流出？或者，您認為一旦車輛利潤率達到兩位數，仍然會出現現金流出？

Okay. Yes, as William mentioned in his speech, and the gross margin improvement in the 2020 is mainly because the -- our supply chain optimization and continuous cost reduction of that battery pack and also manufacturing, cost savings brought forward by production, scaling up and management optimization, and we have confidence that we can achieve this in 2020.

好的。是的，正如William在演講中提到的，2020年毛利率的提高主要是因為——我們的供應鏈優化和電池組以及製造成本的持續降低，生產、規模化和管理帶來的成本節約優化，我們有信心在2020年實現這一目標。

Regarding the volume, and also we mentioned before, is we have clear time, but it's difficult for us to mention this volume scale here for you, but we are confident to to get -- achieve of this target, yes.

關於數量，我們之前也提到過，我們有明確的時間，但我們很難在這里為您提及這個數量規模，但我們有信心實現這個目標，是的。

(foreign language)

（外語）

I just want to add 1 point. In terms of the production capacity of the Hefei plant, we think the vast economy of scale should be around 4,000 per month. Not (inaudible) . (foreign language)

我只想加1分。就合肥工廠的產能而言，我們認為龐大的規模經濟應該在每月4000輛左右。不（聽不清）。 （外語）

The one-shift to production. So the one-shift to production should be around 4,000 per month. If we can get today's (inaudible) then, probably this can basically support our operation target. We believe for this year, we should have some opportunities to achieve this?

一班生產。所以一班產量應該是每月4000個左右。如果我們能得到今天的（聽不清）的話，可能這基本上就可以支持我們的操作目標了。我們認為今年我們應該有一些機會來實現這一目標？

And then perhaps some comments from Steven. If you look at our GP margin, it's related with several parameters, of course, first, the volume. And second, that's our price. Third, our cost. Of course, we expect -- we don't change our sales target for 2020, and we are very confident we can achieve this sales target although the outbreak of novel coronavirus in January and February. And if we look at our sales choice, we think and we are confident, we are able to raise the ASP as more attractive options, such as the new panel. And also, if you look at our cost side, of course, the battery cost will anyway decline.

也許還有史蒂文的一些評論。如果你看一下我們的毛利率，它與幾個參數有關，當然，首先是交易量。其次，這是我們的價格。第三，我們的成本。當然，我們預計——我們不會改變2020年的銷售目標，儘管在一月和二月爆發了新型冠狀病毒，但我們非常有信心能夠實現這一銷售目標。如果我們看看我們的銷售選擇，我們認為並且我們有信心，我們能夠提高平均售價作為更具吸引力的選擇，例如新面板。而且，如果你看看我們的成本方面，當然，電池成本無論如何都會下降。

Then if we look at our other bond cost, that's the auto parts from other suppliers, we believe a 10% decrease is reasonable.

然後，如果我們看看我們的其他債券成本，即其他供應商的汽車零部件，我們認為下降 10% 是合理的。

Third, and if you look at our previous accounting records, we actually compensate the NIO plant. And that means with the production volume to rise, our manufacturing expenses will gradually drop, decline, and we expect that to achieve that 30% decline this year just from its manufacturing cost.

第三，如果你看一下我們之前的會計記錄，我們實際上是對蔚來工廠進行了補償。這意味著隨著產量的上升，我們的製造費用會逐漸下降、下降，我們預計今年僅從製造成本上就能實現30%的下降。

Our next question is from the line of Tim Hsiao of Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Tim Hsiao。

Will and Steven and management team. Just a few quick questions. First of all, could I just have a quick follow-up question regarding the gross margin because you just mentioned about the different product mix.

威爾和史蒂文以及管理團隊。只是幾個簡單的問題。首先，我能否快速詢問一下有關毛利率的問題，因為您剛剛提到了不同的產品組合。

So could we have a little bit more color about the gross margin of EC6, the model launch, in the upcoming Septembers?

那麼我們能否對即將到來的 9 月份推出的 EC6 車型的毛利率有更多的了解呢？

Would that be similar to ES6 or ES8 or could be slightly higher or similar or lower? And separately, we noticed that the selling and marketing expenses rose a bit in fourth quarter last year sequentially.

這是否與 ES6 或 ES8 類似，或者可能略高、相似或更低？另外，我們注意到去年第四季度的銷售和營銷費用環比略有上升。

So could we expect that to become the norm or further trend up considering that we target to open up to 200 stores, I mean, NIO Space by end of this year?

那麼，考慮到我們的目標是到今年年底開設 200 家商店（我的意思是 NIO Space），我們是否可以期望這成為常態或進一步趨勢？

And lastly, is our collaboration agreement binding on Hefei government before the deal is officially signed by end of April? Will the collaboration of potential investment take place at our China owned or at the listed company level?

最後，在四月底正式簽署協議之前，我們的合作協議對合肥市政府是否具有約束力？潛在投資的合作會發生在我們中資還是上市公司層面？

(foreign language)

（外語）

Thanks for your questions. Because we haven't disclosed or announced the specific pricing of the EC6 and our EC6 is actually benchmarked against Model Y, we launched the EC6 at the end of last year, and we received very positive feedback from the public and other users. We will determine the specific pricing of the EC6 based on the market situation.

感謝您的提問。因為我們還沒有透露或公佈EC6的具體定價，而且我們的EC6實際上是對標Model Y的，所以我們在去年底推出了EC6，並得到了公眾和其他用戶非常積極的反饋。我們將根據市場情況確定EC6的具體定價。

We think probably we will announce the specific pricing around July. Gross margin is a very important objective for the company, just like I mentioned in my speech. EC6 has shared many components together with ES6. At the same time EC6 battery cost can be significantly reduced. In terms of the unit cost per watt hour in this Q4 will be reduced by 25% compared with the same period last year. So with all those factors in consideration, we are quite confident about achieving the good gross margin target for the EC6 regardless of the pricing.

我們認為我們可能會在七月左右公佈具體定價。正如我在演講中提到的，毛利率對於公司來說是一個非常重要的目標。EC6 與 ES6 共享許多組件。同時EC6電池成本可以顯著降低。就每瓦時單位成本而言，第四季度將比去年同期降低25%。因此，考慮到所有這些因素，無論定價如何，我們都對 EC6 實現良好的毛利率目標充滿信心。

(foreign language)

（外語）

Just like we have mentioned, NIO Space started from last -- actually, last year, Q4. The main cooperation model for the NIO Space is to work together with other partner to set up and expand the NIO Spaces in the market.

正如我們所提到的，NIO Space 從去年開始——實際上是去年第四季度。NIO Space的主要合作模式是與其他合作夥伴共同在市場上建立和拓展NIO Space。

We work together with the partner-based on the orders or the specific transactions that they can achieve in their stores. So this transaction is based on the offline traffic and the orders that they can settle in their own NIO Spaces.

我們與合作夥伴合作，基於他們在商店中可以實現的訂單或特定交易。所以這個交易是基於線下的流量和他們自己的蔚來空間可以結算的訂單。

Although speaking, the NIO Space model is quite efficient and it's different from the NIO Houses. We're not going to increase the number of the NIO Houses this year. So we believe the NIO Space will not have a significant impact on our SG&A and the efficiency of the NIO Space is actually quite high.

雖然從表面上看，NIO Space的模式是相當高效的，它與NIO Houses有所不同。今年我們不會增加蔚來之家的數量。因此，我們認為 NIO Space 不會對我們的 SG&A 產生重大影響，而且 NIO Space 的效率實際上相當高。

(foreign language)

（外語）

Under the collaboration framework agreement with the Hefei Municipal government, NIO China is a independent entity for the RMB financing activities. The Hefei municipal government will support the NIO China's long-term growth through the RMB financing project.

根據與合肥市政府的合作框架協議，蔚來中國是人民幣融資活動的獨立實體。合肥市政府將通過人民幣融資項目支持蔚來中國的長期發展。

It's not part of the NIO Inc. equity financing project. We haven't signed the definitive agreement yet with the municipal government. After we signed the final agreement, we will disclose the specific details. Thank you.

它不屬於蔚來公司的一部分。股權融資項目。我們還沒有與市政府簽署最終協議。待我們簽署最終協議後，我們將披露具體細節。謝謝。

Our next question is from the line of Ryan Brinkman of JP Morgan.

我們的下一個問題來自摩根大通的 Ryan Brinkman。

I'm just curious how you are thinking about the likely sales or pricing outlook for battery electric vehicles, including for your vehicles relative to internal combustion engine vehicles in light of the almost unprecedented recent decline in the price of oil and presumably soon, gasoline?

我只是好奇您如何看待電池電動汽車的可能銷售或定價前景，包括您的車輛相對於內燃機汽車的銷售或定價前景，因為近期石油價格幾乎史無前例，汽油價格可能很快就會下跌？

(foreign language)

（外語）

Actually, to date, the China government has adjusted the oil price and reduced the supply 15%. But the government will adjust this oil price based on the international oil price, but it will not go any lower than USD 40. Because the crude oil price is that is USD 40. At this moment, the crude oil price in the international market is around USD 30. So it means that the Chinese government will not have any space to reduce the price further. Based on the current price, the cost of EV usage is still much better than that of the combustion cars. So we think they will not have any significant changes regarding this cost of usage.

事實上，迄今為止，中國政府已經調整了油價並減少了15%的供應。但政府會根據國際油價調整這個油價，但不會低於40美元。因為原油價格是40美元。目前，國際市場原油價格在30美元左右。所以這意味著中國政府將沒有進一步降低價格的空間。以目前的價格來看，電動汽車的使用成本仍然比燃油車要好很多。因此，我們認為他們在使用成本方面不會有任何重大變化。

(foreign language)

（外語）

I think it's the market consensus that in the long term, EV is going to replace combustion cars. The main reason for this trend is not because of the cost of usage it's mainly because the EV is better fitted for the autonomous driving technologies and EDS in terms of the response time of the motors. At the same time, the Chinese government is quite determined in terms of the emission reduction. For example, the government has released many favorable policies for the EVs in terms of the license plate and tax reductions. So those are the main impetus for the users to choose EV over combustion cars.

我認為市場共識是，從長遠來看，電動汽車將取代燃油汽車。這種趨勢的主要原因不是因為使用成本，而是因為電動汽車在電機響應時間方面更適合自動駕駛技術和 EDS。同時，中國政府在減排方面的決心也十分堅定。例如，政府在牌照、稅收減免等方面針對電動汽車出台了諸多優惠政策。因此，這些是用戶選擇電動汽車而不是燃油汽車的主要動力。

(Operator Instructions)

（操作員說明）

Our next question is from the line of Bin Wang of Crédit Suisse.

我們的下一個問題來自瑞士信貸銀行的王斌。

I actually want to clarify several numbers. Number 1 is about gross margin. You mentioned gross margin will be improving in 2020. So is the vehicle gross margin or is the overall gross margin, including vehicle, that's number one, I want to clarify.

我其實想澄清幾個數字。第一個是關於毛利率。您提到2020年毛利率將會改善。我想澄清一下，是車輛毛利率還是包括車輛在內的整體毛利率？這是第一位的。

The second thing is about one-off expense. Can you quantify how big is the size of one-off expense? And what's the detail about the expense? That's the second thing. And the third thing is, actually, you mentioned that in the first quarter, the cost would decline by 35% or another, or another translation is that the loss-making in the #1 quarter would decline by 35%.

第二件事是關於一次性費用。您能量化一下一次性費用有多大嗎？費用的詳細情況如何？這是第二件事。第三件事是，實際上，您提到第一季度成本將下降35%或其他，或者另一種翻譯是第一季度的虧損將下降35%。

So what's the base for a decline for 35% in the first quarter this year? That's the 3 things I want to clarify. And besides, actually, I have 1 question about the financing because think about the share price right now, the CB actually has a potential risk to demand (inaudible) now converted to the share.

那麼今年一季度下降35%的基礎是什麼？這就是我想澄清的三件事。此外，實際上，我有一個關於融資的問題，因為考慮一下現在的股價，可轉換債券實際上對現在轉換為股票的需求（聽不清）存在潛在風險。

So for upcoming, do you have any further financing after the Hefei and tie up any further financing plan?

那麼對於接下來的合肥之後，你們還有沒有進一步的融資以及後續的融資計劃呢？

And actually, you can see in the media report, the (inaudible) automaker match (inaudible) your investments such as the GD such as JC. So do you see any synergy, if you would really got a shareholder from the traditional carmaker.

實際上，您可以在媒體報導中看到（聽不清）汽車製造商與您的投資相匹配（聽不清），例如 GD、JC。那麼，如果你真的從傳統汽車製造商那裡獲得股東，你會看到任何協同效應嗎？

For example, you can share their supply chain and there maybe the components supply with much lower cost.

例如，您可以共享他們的供應鏈，並且組件供應的成本可能要低得多。

Okay. So perhaps, I want to start with the GP margin question. Yes, we think we will achieve positive GP margin for second quarter of 2020 and double-digit GP margin in Q4 of 2020. Of course, first we refer it as our vehicle GP margin. And you can see our -- because vehicle sales accounted for 94% of our total revenue.

好的。所以也許我想從總利潤率問題開始。是的，我們認為我們將在 2020 年第二季度實現正的毛利率，並在 2020 年第四季度實現兩位數的毛利率。當然，首先我們將其稱為我們的車輛 GP 利潤率。你可以看到我們的——因為汽車銷售占我們總收入的 94%。

So our overall revenue -- our overall GP margin will be close to our vehicle GP margin. That's first. Second, if you look at our other sales GP margin, it also improved in Q4 2019, and we are confident that with our efforts, our other sales GP margin will also improve in 2020. That's the first. And I think Stanley will give you more explanation about the one-off, onetime costs?

因此，我們的總體收入——我們的總體毛利率將接近我們的汽車毛利率。這是第一。其次，如果你看看我們的其他銷售毛利率，它在 2019 年第四季度也有所改善，我們有信心通過我們的努力，我們的其他銷售毛利率也會在 2020 年有所改善。這是第一個。我認為斯坦利會給你更多關於一次性成本的解釋？

Yes. The second question is about the one-off onetime of expense. The majority were related to organizational restructuring across all functions, facility leasing contract termination, compensation and also the strategy adjustments around the manufacturing and the supply chain. So that's the second question, yes.

是的。第二個問題是關於一次性費用的問題。大多數與所有職能部門的組織重組、設施租賃合同終止、薪酬以及圍繞製造和供應鏈的戰略調整有關。這是第二個問題，是的。

Total numbers. Stanley, Total number.

總數。斯坦利，總數。

Total number is around full RMB 400 million.

總金額約為4億元人民幣。

That's the second question. Third is about the -- our forward-looking about the net loss of the first quarter of 2020, the comparison is with the fourth quarter of 2019.

這是第二個問題。第三個是關於——我們對2020年第一季度的淨虧損進行前瞻性，與2019年第四季度進行比較。

So compared with fourth quarter of 2019, we expect the first quarter of 2020 will decrease by 35%, its quarter-on-quarter comparison. Yes.

因此，與2019年第四季度相比，我們預計2020年第一季度環比將下降35%。是的。

I Understand. So it's not the OpEx is the bottom line. So it's about RMB 2.9 billion decline 35%. Is that true? So it's not Opex, it's the bottom line, not net loss.

我明白。因此，運營支出並不是底線。所以大約是29億元人民幣，下降了35%。真的嗎？所以這不是運營成本，而是底線，而不是淨損失。

Yes, net loss, yes.

是的，淨虧損，是的。

Yes, net loss, confirmed net loss, yes. So the fourth question goes to William?

是的，淨虧損，確認的淨虧損，是的。那麼第四個問題是問威廉的嗎？

(foreign language)

（外語）

As we have been working together with other OEMs in various ways. For example, we have been working together with JAC in terms of the manufacturing, and we also have a very good collaboration with GAC in terms of the GNC new joint venture.

因為我們一直在以各種方式與其他原始設備製造商合作。比如我們在製造方面一直和江淮汽車有合作，在新合資公司GNC方面我們和廣汽也有很好的合作。

Recently, both parties have decided to increased investment in this joint venture. And this joint venture is going to kick off the mass production of their vehicle models. We will continue this cooperation with those OEMs.

近期，雙方決定加大對該合資公司的投資力度。這家合資公司將開始量產他們的車型。我們將繼續與這些原始設備製造商的合作。

Regarding other OEMS, we will continue to explore other possibilities to work with them in terms of the supply chain and R&D.

對於其他主機廠，我們將繼續探索與他們在供應鍊和研發方面合作的其他可能性。

But in terms of the equity or capital aspect, we don't have any specific information that we can disclose at this stage.

但在股權或資本方面，我們現階段沒有任何具體信息可以透露。

If we have any information that we would like to disclose, we will share those information as soon as possible.

如果我們有任何想要披露的信息，我們將盡快分享這些信息。

Our next question is from the line of Lei Wang of CICC.

我們的下一個問題來自中金公司的王磊。

I was disconnected and I was not able to finish the last question. So do we have some guidance on what the CapEx is going to be this year? Because it was reported that we are about to invest R&D center, a new R&D center and also the segment manufacturing site?

我斷線了，無法完成最後一個問題。那麼我們對今年的資本支出有什麼指導嗎？因為有報導說我們要投資研發中心，一個新的研發中心，還有細分生產基地？

(foreign language)

（外語）

In terms of CapEx For 2020, the majority will be used for the new product model launch. For example, the tooling required for the product launch. It is less than USD 200 million. In terms of the cooperation with the Hefei Municipal Government, after we signed the definitive agreement with the government, we are not going to invest to build the R&D center or the manufacturing base in the Hefei municipal city. And this is not going to cause any pressure on our CapEx.

就2020年的資本支出而言，大部分將用於新產品型號的推出。例如，產品發布所需的工具。不到2億美元。在與合肥市政府的合作方面，我們與政府簽署最終協議後，我們不會在合肥市投資建設研發中心或製造基地。這不會對我們的資本支出造成任何壓力。

Our next question is from the line of Fei Fang of Goldman Sachs.

我們的下一個問題來自高盛的方飛。

(Operator Instructions)

（操作員說明）

Our next question is from the line of Paul Gong of UBS.

我們的下一個問題是來自瑞銀集團的龔保羅。

William and Steven. Two questions. The first 1 is, I remember in first quarter last year, you have to pay -- you have to prepay the battery purchase to CATL for the full year is that still the case heading to 2020 and heading through this year?

威廉和史蒂文。兩個問題。第一個是，我記得去年第一季度，你必須支付——你必須向寧德時代預付全年的電池採購費用，到2020年和今年還是這樣嗎？

This is my first question. And my second question is regarding your assumption on the battery price declining throughout 2020. You mentioned that in Q4 of 2019, your battery cost is 20% cheaper than Q4 of 2018.

這是我的第一個問題。我的第二個問題是關於您對 2020 年電池價格下降的假設。您提到2019年第四季度，您的電池成本比2018年第四季度便宜20%。

But in Q4 of 2019, you were still making negative gross margin despite of 8,000 delivery. So when you mentioned by end of this year, you are going to achieve double-digit gross profit margin, what further battery cost decline or assumption are you used? I think Steven mentioned 10% decrease on the other (inaudible) cost, but I just want to have your assumption on the battery cost assumption for this?

但在 2019 年第四季度，儘管交付了 8,000 輛，但毛利率仍然為負。那麼，當您提到到今年年底，您將實現兩位數的毛利率時，您會採用什麼進一步的電池成本下降或假設？我認為史蒂文提到其他（聽不清）成本降低了 10%，但我只想了解一下您對此的電池成本假設的假設？

(foreign language)

（外語）

Thanks for the question. Last year due to the subsidy reduction, the passenger vehicle sales in China has slumped significantly. But because our users are private users and for other OEMS, normally, they sell their cars for the operating usage.

謝謝你的提問。去年，受補貼退坡影響，中國乘用車銷量大幅下滑。但由於我們的用戶是私人用戶，對於其他整車廠來說，通常他們出售汽車是為了運營用途。

In this case, our sales didn't decline that significant compared with the sales of other OEMs. That is why right now, we are 1 of the most important partner with CATL. This year, our cooperation with CATL is going to be even closer.

在這種情況下，我們的銷售額與其他整車廠的銷售額相比並沒有下降那麼大。這就是為什麼現在我們是寧德時代最重要的合作夥伴之一。今年，我們與寧德時代的合作將會更加緊密。

This means that we can get a much better deal together with the CATL compared with last year. For example, in terms of the payment terms.

這意味著與去年相比，我們可以與寧德時代達成更好的協議。例如，在付款條件方面。

(foreign language)

（外語）

In terms of the price, starting from 1.5 years ago, we have been working together with CATL to reduce the price of the battery. This year, we have witnessed a significant cost reduction. Starting from the second quarter, we will have a continuous cost reduction every quarter.

價格方面，從1.5年前開始，我們就一直在和寧德時代合作，降低電池的價格。今年，我們見證了成本的大幅下降。從第二季度開始，我們每個季度都會有持續的成本削減。

In the fourth quarter of this year, we will launch the 100-kilowatt hour battery pack and the CTP battery pack. With those new battery packs, we can further reduce the cost without affecting the performance and the drive range of our vehicle models.

今年第四季度，我們將推出100千瓦時電池組和CTP電池組。有了這些新的電池組，我們可以進一步降低成本，而不會影響我們車型的性能和續駛里程。

The cost -- the unit cost per watt hour is going to be reduced by 20% compared with last fourth quarter at the battery pack level.

成本——電池組層面的每瓦時單位成本將比去年第四季度降低20%。

So we're confident that we can improve the gross margin. Just like we have mentioned, in terms of the gross margin improvement, the main drivers are the battery cost reduction, other bond cost reduction and the manufacturing cost savings, we are quite confident to see the positive results from those gross margin efforts.

因此，我們有信心能夠提高毛利率。正如我們所提到的，就毛利率的改善而言，主要驅動力是電池成本的降低、其他債券成本的降低以及製造成本的節省，我們非常有信心看到這些毛利率努力取得的積極成果。

(Operator Instructions)

（操作員說明）

Our next question is from the line of Ming Lee of Bank of America Merrill Lynch.

我們的下一個問題來自美銀美林的李明。

So I just have a few quick questions. So my first question is that right now, because the overall EV consumption sentiment is still not very strong in China. So how do you think about any new strategy to help your volume sales? I know you're talking about new products and also the NIO Space expansion? But do you -- will you have any new strategy to have on the volumes sale? That's my first question. Second question, some of the -- your competitors already discussed to use LFP battery to lower the battery cost.

所以我只有幾個簡單的問題。所以我的第一個問題是，目前中國的整體電動汽車消費情緒仍然不是很強勁。那麼您如何看待有助於銷量的新策略？我知道你在談論新產品以及 NIO Space 的擴展？但是對於銷量，你們有什麼新的策略嗎？這是我的第一個問題。第二個問題，您的一些競爭對手已經討論過使用磷酸鐵鋰電池來降低電池成本。

But do you think it's a feasible choice for you? Since you have battery swap service, and you have a lot of NCM battery for swap. So do you think it's a possible choice? Or you don't think it's a good choice for you to lower your own cost of tax?

但你認為這對你來說是一個可行的選擇嗎？由於您有電池更換服務，並且您有大量 NCM 電池可供更換。那麼您認為這是一個可能的選擇嗎？或者您認為降低自己的稅收成本不是一個好的選擇？

That's my second question. And my third question is that how -- what's the CapEx do you plan to spend on the battery swap and the battery charging station for this year? That's my third question.

這是我的第二個問題。我的第三個問題是，今年您計劃在電池更換和電池充電站上花費多少資本支出？這是我的第三個問題。

(foreign language)

（外語）

Yes, it's a quite unique advantage for NIO in terms of the battery related innovations. This year, we are going to launch a new contract called battery-as-a-service.

是的，就電池相關創新而言，這對於蔚來來說是一個非常獨特的優勢。今年，我們將推出一項名為“電池即服務”的新合同。

This is going to leverage the power swap stations and the swapping technologies we have. It's quite important to improve the overall existing efficiency. In the world, only NIO can provide these kind of services to the users. Users can lease the battery or swap the battery and upgrade the battery according to the specific needs.

這將利用我們擁有的換電站和交換技術。提高現有的整體效率是相當重要的。全球範圍內，只有蔚來能夠為用戶提供此類服務。用戶可以根據具體需求租賃電池或更換電池、升級電池。

Right now, we have already launched the 84-kilowatt hour battery pack to the users in our battery circulation system. So the users are free to -- allowed to upgrade their battery packs with this 84-kilowatt hour battery. In terms of the battery-as-a-service, this is going to be a very important strategy for us to put ourselves besides all the other strategies we have mentioned. We are now having very close discussions with the government authorities regarding the specific policies for the battery-as-a-service. The current progress is quite positive if there is any kind of important information that we will share with everyone right away.

目前，我們已經在電池循環系統中向用戶推出了84千瓦時的電池組。因此，用戶可以自由地使用這款 84 千瓦時的電池升級電池組。就電池即服務而言，這將是我們除了我們提到的所有其他策略之外的一個非常重要的策略。我們現在正在與政府當局就電池即服務的具體政策進行非常密切的討論。目前的進展是相當積極的，如果有什麼重要的信息我們會立即與大家分享。

(foreign language)

（外語）

Because we have the swapping technology in place, so we are quite willing to explore different technologies and materials for the battery packs. But when we make this decisions, we will consider the performance experience and the cost. For example, we have the same battery pack size with different kind of energy density, like 100-kilowatt hour battery pack and 84-kilowatt hour battery pack. This year, with the CTP technologies, we will be able to launch this 100-kilowatt battery pack. This is our unique advantage. This means that we should also be free to explore the possibilities in terms of the LFP material.

因為我們有互換技術，所以我們非常願意探索不同的電池組技術和材料。但我們在做這個決定的時候，會考慮性能體驗和成本。例如，我們有相同尺寸但不同能量密度的電池組，如100千瓦時電池組和84千瓦時電池組。今年，憑藉CTP技術，我們將能夠推出這款100千瓦的電池組。這是我們獨特的優勢。這意味著我們也應該可以自由地探索LFP材料方面的可能性。

(foreign language)

（外語）

In terms of the swap station and CapEx investment related with the battery, we will increase the investment a little bit this year because our user base is increasing. But overall speaking, for this year is going to be around RMB 100 million.

在換電站和與電池相關的資本支出方面，我們今年會增加一點投資，因為我們的用戶基數在增加。但總體來說，今年會在1億元左右。

(Operator Instructions)

（操作員說明）

Our next question is from the line of Fei Fang of Goldman Sachs.

我們的下一個問題來自高盛的方飛。

Just 2 quick questions. So apologies if this has been covered before. So for the first quarter volume guidance, is it possible to break it out by ES8 and ES6? And then the second question is that we noticed the net cash in the fourth quarter didn't really change much from the third quarter despite we still have a RMB 2.8 billion loss. So can you maybe walk us through some of the major items in the cash flow statement. What has been sort of driving the better than sort of earnings, free cash flow in the fourth quarter?

只是兩個簡單的問題。如果之前已經報導過這個問題，我們深表歉意。那麼第一季度銷量指引是否有可能通過ES8和ES6來突破呢？第二個問題是，我們注意到第四季度的淨現金與第三季度相比並沒有太大變化，儘管我們仍然虧損28億元人民幣。您能否向我們介紹一下現金流量表中的一些主要項目？是什麼推動了第四季度盈利、自由現金流的增長？

(foreign language)

（外語）

In terms of the sales for the third quarter, the majority of the sales are contributed by the ES6 because we are about to deliver the all new ES8 in April. This means that the orders for the current ES8 is going to decrease because people would like to place order for the all new ES8. Our model is make-to-order. So this is quite unique for us because at the end of last year, we have launched the all new ES8 and started to accept the orders from the public.

從第三季度的銷量來看，大部分銷量是由ES6貢獻的，因為我們即將在4月份交付全新ES8。這意味著現款ES8的訂單將會減少，因為人們希望訂購全新的ES8。我們的型號是按訂單生產的。所以這對我們來說是非常獨特的，因為去年年底，我們已經推出了全新的ES8，並開始接受公眾的訂單。

Regarding the second question about the cash flow of fourth quarter 2019, I think first is about we closely monitored our cash position in fourth quarter. So the operating flow, I think, decreased compared with last quarter. And secondly, as we mentioned in our Q3 2019 earnings release, (inaudible) was closed in the fourth quarter.

關於第二個問題，關於2019年第四季度的現金流，我認為首先是我們密切監控第四季度的現金狀況。因此，我認為與上季度相比，運營流量有所下降。其次，正如我們在 2019 年第三季度收益報告中提到的，（聽不清）已於第四季度關閉。

So there is still some cash injection in this quarter. So combined with those effects, I think, the total net cash outflow is a little bit lower than the total loss. So I think that's the reason. Thank you.

所以本季度還是有一定的現金注入的。因此，結合這些影響，我認為淨現金流出總額略低於總損失。所以我認為這就是原因。謝謝。

And sorry, I just want to confirm that (inaudible) was $100 million. That's the inflow -- financing inflow in the fourth quarter?

抱歉，我只是想確認（聽不清）是 1 億美元。這就是第四季度的資金流入？

Yes. We -- (inaudible) subscribed totally USD 100 million and the majority came in in the fourth quarter.

是的。我們（聽不清）總共認購了 1 億美元，其中大部分是在第四季度認購的。

And there is 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。現在我想把電話轉回公司做總結髮言。

Thank you again for joining us today. If you have any questions, feel free to contact NIO's Investor Relations team through the contact information provided on our website. So this concludes the conference call. You may now disconnect your lines. Thank you.

再次感謝您今天加入我們。如果您有任何疑問，請隨時通過我們網站上提供的聯繫信息聯繫蔚來投資者關係團隊。電話會議到此結束。您現在可以斷開線路。謝謝。

Thank you. Thank you, everyone.

謝謝。謝謝大家。

Thank you.

謝謝。

Thank you. Bye.

謝謝。再見。

Thank you. Ladies and gentlemen, that concludes your conference for today, and thank you for participating. You may now all disconnect.

謝謝。女士們、先生們，今天的會議到此結束，感謝你們的參與。你們現在可以斷開連接了。

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

[本筆錄中的英語陳述是由現場通話中的口譯員說出的。]