Hello, ladies and gentlemen, thank you for standing by, and welcome to the NIO Incorporated First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I would now like to hand the conference over to your host, Ms. Eve Tang from Capital Markets. Please go ahead.

Good morning and good evening, everyone. Welcome to NIO's first quarter 2023 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. 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, Senior VP of Finance; and Ms. Jade Wei, VP of Capital Markets. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, as such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain filings of the company with the U.S. Securities and Exchange Commission, the Stock Exchange of Hong Kong Limited, and the Singapore Exchange Securities Trading Limited. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that NIO's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to NIO's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr. William Li. William, please go ahead.

[Foreign Language] [Interpreted] Hello, everyone. Thank you for joining NIO's 2023 first quarter earnings call. In the first quarter of 2023, NIO delivered a total of 31,041 smart electric vehicles, up 20.5% year-over-year. In April and May, NIO delivered 6,658 and 6,155 vehicles, respectively. We expect the total deliveries in the second quarter of this year to be between 23,000 and 25,000 units. As we ramp up the production of the All-New ES6 and other new models, we are confident in continuously driving up our delivery volume. Next, I would like to share with you the recent highlights of our products, R&D, and operations. On May 24, we launched the All-New ES6, an all-around midsize smart electric SUV, and started its delivery the next day. The product quality of the All-New ES6 has been widely acclaimed by the first batch of users. In May, we also started the user delivery of the 2023 NIO ET7, and the flagship coupe SUV EC7, coming with more than 15 new features and enhancements. The 2023 NIO ET7 continues to lead the change in the premium smart electric mid-large sedan market. As a flagship coupe SUV, EC7 inherent NIO's high-performance DNA and both ultimate riding and handling experience. NIO's product quality and the safety also recognized by authoritative institutions. On April 24, NIO ET5 was rated good, the highest safety level by China Insurance Automobile Safety Index, or C-IASI. In J.D. Power's 2023 China New Energy Vehicle Initial Quality Study released on June 1, NIO ES6 won first place in the premium BEV segment for the fourth consecutive year. Also in J.D. Power's 2023 NEV-APEAL Study, which evaluates new energy vehicles' performance, execution and layout, NIO ET7 ranked number one among premium BEVs. We plan to launch the NIO ET5 Touring on June 15…

Thank you, William. I will now go over our key financial results for the first quarter of 2023. And to be mindful of the length of this call, I'll reference to RMB only in my discussion today. I encourage listeners to refer to our earnings press release, which is posted online for additional details. Our total revenues in the first quarter were RBM10.7 billion, representing an increase of 7.7% year-over-year and a decrease of 33.5% quarter-over-quarter. Our total revenues are made of two parts: vehicle sales and other sales. Vehicle sales in the first quarter were RMB9.2 billion, representing a decrease of 0.2% year-over-year and a decrease of 37.5% quarter-over-quarter. The decrease in vehicle sales year-over-year was mainly due to lower average selling price as a result of higher proportion of ET5 and 75 kilowatt standard-range battery pack deliveries, partially offset by an increase in delivery volume. The decrease in vehicle sales quarter-over-quarter was mainly due to a decrease in delivery volume, and lower average selling price as a result of higher proportion of ET5 and 75 kilowatt standard-range battery pack deliveries. Other sales in the first quarter were RMB1.5 billion, representing an increase of 117.8% year-over-year and increase of 11.3% quarter-over-quarter. The increase in other sales year-over-year was mainly due to the increase in sales of accessories, provision of repair and maintenance services, provision of auto financing services, sales of used cars and provision of power solutions, as a result of continued growth of our users. The increase in other sales quarter-over-quarter was mainly due to the increase in provision of auto financing services, sales of accessories, provision of repair and maintenance services, provision of power solutions and sales of used cars, as a result of continued growth of our users, and partially offset by a decrease in revenue…

Thank you. [Operator Instructions] Your first question comes from Tim Hsiao from Morgan Stanley. Please go ahead.

[Foreign Language] So my first question is about volume and cost control, because NIO has been investing more aggressively since 2021 on new models, sales and marketing and energy replenishment network. So in light of the challenging industry and macro outlook, would NIO consider streamlining the model portfolio and cutting back on investment in some projects like smartphone, battery, chipset and refocus resource on a few flagship models? And separately, does NIO still stick to its original schedule to launch our mass market brand ALPS next year? So that's my first question. Thank you.

[Foreign Language] [Interpreted] Thank you, Tim, for your question. As we have mentioned, the market competition is intensifying and we do face a lot of changes in the market dynamics. For the NIO technology platform 2.0, we are about to show the whole lineup of the eight products based on the NT2.0, and these eight products will enter the market in the near term, gradually. The current focus of us is to make sure we have the new organization structure to have a more targeted sales strategy and the marketing strategy for all the eight products to reach its own target user groups. Because when we design those products, we do have a specific positioning of different products in their specific segment and target groups. So the kind of challenge for us is to make sure our marketing and the sales team can be more dedicated on these eight products in terms of showroom layout and the product reach and the marketing reach and the distribution of the resources at the sales and marketing teams. We want to make sure for each product, we have dedicated teams to take responsibilities in terms of sales and marketing efforts. Of course, for those key products, we will put more resources to make sure we can reach much better sales performance. But just like I mentioned, the focus for us now is to make sure we can have more dedicated resources for the eight products separately and to make sure they can achieve good market share in terms of their specific segment. Yes, of course, we need to be more agile in terms of face the challenges of the changing market situation to ensure our competitiveness in terms of the products and services. Regarding the topics of the R&D projects, overall speaking we would like to insist on our big directions in terms of the R&D projects. In the short-term, yes, we do have some pressures, but we think it's really important and necessary for us to focus on those R&D capability building to build of our long-term competitiveness. But at the same time, based on our resources and the priorities of the company, we can adjust the pace of the investment for all those different R&D projects. For the question regarding ALPS project, our timing for ALPS brand is still the same, that is the second half of 2024, where we plan to launch the ALPS products at that time, and we would choose the specific timings for those different products. However, at the same time, we want to make sure for the ALPS products we can have a much faster pace in terms of the go-to-market because these can help us to improve the efficiency and have a much better planning of the resources, especially at the marketing and sales front.

[Foreign Language] So, my second question is about the new ES6. The second quarter guidance came in stronger than market expectation, which could [indiscernible] call to like 3,000 to 4,000 units of additional sales of the new ES6. So, could you share a little bit more about the order intake of the new ES6 since it's launched to date? And is there is any bottleneck to the delivery of new ES6? In the meantime, are you still expecting the sales aggregate of ET5, ES6, and the upcoming ET5 Touring to achieve 20,000 a month? And when do you expect to achieve that [modeling] (ph) target? So that's my second question. Thank you.

[Foreign Language] [Interpreted] Thank you, Tim. ES6 is very well received by the users and also received very good feedback in the media. We think the order performance has reached our expectations and the test drive conversion rate of the ES6 actually reached a record high in the history of NIO, so that's why we're very confident in terms of the sales performance of ES6. At this stage, especially in June, we need to focus on the ramp-up of the ES6 first. But for the targets in July is that we want to achieve 10,000 units in terms of the production and delivery. We're very confident to achieve this target in July and the supply chain team, manufacturing team and the other teams are making all sorts of preparations to make sure we can achieve this objective. Regarding the ET5, ET5 Touring and ES6 overall volume, we believe there is opportunity for us to still achieve 20,000 units in one month. The big challenge for us right now is more about the ET5, because if we look at the ET5's pricing, we can see that the last year, we still have around RMB12,000 subsidies for the users, and at the same time, users can get the home chargers free of charge last year, but now users will need to pay for the home chargers for the ET5. So, net-net speaking probably for the ET5, if we make the apple-to-apple comparison, it's probably like a RMB20,000 more expensive this year. This is the fact and the challenge we need to face. But what we need to focus on is to make sure we can find a better way to expand the user needs and the demand. The more challenge we are facing right now is about the ET5, but just like I mentioned, we're going to launch the ET5 Touring on June 15. This is going to help us to improve our overall product competitiveness, because we believe ET5 Touring can cater to the diversified needs of individuals and the family users and this can help us to boost our competitive -- of our product competitiveness in this specific market segment. Thank you, Tim.

Thank you, William.

Thank you. Your next question comes from Bin Wang from Credit Suisse. Please go ahead.

Thank you. I've got two questions. Number one is about the margin outlook. We've reached [10,000 per month] (ph) for ES6 in the third quarter. So what's the gross margin expectation we can have for the third quarter second half? That is the number one question about gross margin guidance. [Foreign Language]

Hi, Bin, this is Stanley. As William mentioned, with the delivery of our NT2.0 product with higher price from Q2 and Q3, the average selling price and gross profit margin per car will recover. So, we are confident that the gross profit margin will start to recover to double-digits in Q3 and over 15% in Q4. Yes, thank you.

Okay, great. My second question about, any further fundraising demands are needed, because right now people worry about your net cash position, which declined quite fast. And so, can you just provide some update about your potential fundraising, especially on NIO China IPO? [Foreign Language]

[Foreign Language] [Interpreted] Thank you, Bin, for your question. Yes, for this year, if we look at the first quarter and the second quarter, because of the delivery performance, which is actually lesser than that of the fourth quarter last year, so this has affected our operating cash flow. But together with over delivery volume ramp-up in the third quarter, we believe that the operating cash flow will also improve. Currently, we believe our cash is sufficient to support the company's business development. As a public listed company, we make very prudent management of our cash positions and at the same time, we do have all the different channels to do the fundraising in different markets. But this year, we have made some adjustments in terms of our cash spending. For example, we have delayed our CapEx investment and we have also delayed some R&D projects. At the same time, in terms of global market expansion, we believe it's more important for us to focus on the markets that we have already entered, for example, for those countries where we have already entered in Europe. So, if we have any kind of plans in the capital markets, we will, of course, let everyone know. Thank you, Wang Bin.

Thank you. Your next question comes from Ming-Hsun Lee from BofA. Thank you. Please go ahead.

Thank you, William and Steven. So, I also have two questions. My first question is, what is the battery price decline in the first quarter? And how much does the battery price to -- help gross margin in the first quarter? And also, could you also comment the second quarter and the third quarter's battery price trend? That's my first question. Thank you.

Hi, Ming. Generally, the price of lithium carbonate decreased a little bit from Q1. So this led to certainly increase of our gross profit margin. Regarding the amount wise, I think [indiscernible] per car. But recently, I think we can also see the lithium carbonate price also recovered a little bit to RMB310,000 per ton. So, well, the change of lithium price will bring uncertainty to our gross profit margin, yes. Generally -- that's generally the impact of lithium.

Thank you, Stanley. And my question is regarding your latest CapEx and the operating expense guidance, because I think William just mentioned that you are starting to control certain investments, especially for some long-term investments, but are you able to give some new guidance, if there is any? I remember last year, the CapEx is around RMB10 billion. Yes, so, I want to know your guidance for this year for CapEx and OpEx. Thank you.

Yes, Ming. Our CapEx will still concentrate on the construction of Power Swap stations, charging networks, so it's network and also tooling and production facilities for our new models. We will well control the cadence of those investments. But at this moment, I don't think we can give clear guidance of CapEx investment for this year. Yes, we will make adjustments dynamically in line with the spending and also the status, yes.

Yes. Also any guidance on operating expense? Sorry.

Okay. Regarding operating expense, one is for the R&D expense. The upcoming years remains to be the crucial stage for our R&D and also mass production of our core technology as new models. So, our average in each quarter of 2023, the non-GAAP R&D expense will be kept at RMB3 billion to RMB3.5 billion per quarter. Yes, we will also manage the spending curve and also keep improving our system efficiency. And for SG&A expense, yes, we can see a decline in Q1. The main reason is because of the reduced marketing activities and also the seasonality impact of Chinese New Year, along with more marketing events like Auto Show, Road Show, and also the launch of new models. The SG&A total amount will increase from Q2, but the efficiency will be improved from Q3 since our NT2.0 products will be launched and more volume will be realized. I mean, that's the guidance for the OpEx of the next quarters.

Thank you, Stanley. Thank you.

Thank you, Ming.

Hi, operator, next question, please.

Thank you. Your next question comes from Yuqian Ding from HSBC. Please go ahead.

[Foreign Language]

Yes, go ahead.

[Foreign Language] So, I've got two questions. The first is, do we have plan to introduce any budget version of our existing model, especially the potential volume carrier ET5 by lower price and lower content to access more volume? And the second question, you talked about the dial down a little bit on OpEx front. Generally, does that also affect or postpone our breakeven point of the year?

[Foreign Language] [Interpreted] Thank you, Yuqian, for your question. We understand that there are many different kinds of pricing movements in the market, but first, regarding ET5, so, we don't think it's reasonable prices to have a budget version of the ET5, because of our philosophy is that we believe the different configurations or the important configurations should come as a standard for all of our NT2.0 products. For example, the dual motors, [AD suites] (ph), and other important functions and features, we believe those standard of package philosophy can serve the long-term interests to our users. But at the same time, we do have some flexibilities in many other different approaches. For example, user rights, such as the free battery swapping. When we make those kinds of considerations and adjustment, of course, the important thing is to make sure we can put the users' interest first. So, when we decide to make those kinds of adjustments, we also need to consider the interest of our installed base. For the second question regarding the breakeven point, according to the current situation, we do think probably we need to delay our breakeven point to within one year. And we think this is probably a reasonable assumption.

Thank you, Eve Tang.

Thank you. Your next question comes from Nick Lai from JPMorgan. Please go ahead.

[Foreign Language] My first question is really following up on the previous question regarding cash burn and CapEx cycle and so on. So you just mentioned that your push back R&D expense and so on. And -- but I'm more curious about our '24, '25 planning. How should we expect the CapEx or cash burn into '24 and '25? Would that be flat or up or down compared with 2023? Thank you.

[Foreign Language] [Interpreted] Thank you for your question, Nick. Regarding the dynamic and the fluid market situation, we understand it's important for us to control the risks and to keep as a stable and sound business operations. For the ALPS brand, basically, the project is moving forward according to our plan. For the production site, we believe the current production capacity is sufficient to support the needs of new brand and ALPS brand. So, it means that in terms of production facilities and the capacities, there is no need for big CapEx investments. In the market front, we -- starting from this year, we should have sufficient Power Swap stations to support both brands to share the Power Swap stations. Previously, we mentioned that probably for the go-to-market of ALPS brand, we do need to make some investments in terms of CapEx and OpEx. But we would like to control the pace of the go-to-market cadence to make sure we can have much faster movement and the cadence and have a much agile mode to operate the go-to-market of that ALPS brand. So, this can help us to save the resources and the capital. In terms of the cash management, of course, as a publicly listed company, we need to be very prudent in terms of the cash management. For the financing channels, we do have different channels in terms of the RMB and U.S. dollar capital markets. So for us, we think cash is not going to be a big issue for the company. But at the same time, we still need to make a refined management of our cash and also the working capital of the company.

[Foreign Language] My second question is really simple, really about the product mix, yes. Is new product ES6 is going to account a meaningful portion of the volume? And how should we think about the contribution from these four major models? And how should we think about the product mix going forward? Thanks.

Hi, Nick. Regarding the volume percentage of ET5, ET5 Touring, ES6 and EC6, I think, from a long-run, the percentage will be 80% around. Yes, but from -- and from the long run as I mentioned earlier, this year, I think with all NT2.0 product launched, our gross profit margin can recover to 15%. And long-term, considering the cost advantage brought by the in-house technology and capability and also the innovative supply chain developments, the NT2.0 product gross profit margin target will be still be 20% from a long-run. Yes, thank you.

Thank you. Your next question comes from Paul Gong from UBS. Please go ahead.

So, my first question is regarding the dual-motor sales front. It seems that a few recent new models all share a similarity with strong start, but after a few months, subsequent declines. Does our ES6 also face such kind of challenges or how should we avoid this happening again?

[Foreign Language] [Interpreted] Thank you, Paul, for your question. Last year, we launched three products: ET7, ES7 and ET5. To be honest, in terms of the recent performance of these three products, including the second quarter, we understand the market performance of these three products is lagging behind of our expectations. If we look at the factors that affecting the performance of these three products, just like I mentioned before, last year, the users purchased those three products, they have more user rights and benefits, and they can enjoy the national subsidies. But this year, for the users purchasing these three products, apple-to-apple comparison, the cost increase is around RMB10,000 to RMB20,000. So, at the same time, if we look at the macro environment, we can see the market competition is also getting intensified. So some users are choosing probably some other NIO brands or some traditional brands of our products. This is one factor. And another factor is internal cannibalization or competition. For example, some ES7 users may decide to choose ES6 instead of the ES7, and for some ET5 users, probably they decided to wait a little bit for the ET5 Touring. This is the situation that we're facing right now. That is why we decided to probably -- we're going to make some adjustments in the near term in terms of our sales channel and network as well as our organizational structure and our sales and marketing strategy and policies. But for the five new products based on the NIO Technology platform 2.0 that we launched this year, we do not have this concern. The first product we launched this year is EC7. After the delivery of EC7, we can see the demand is actually quite stable. As for the ES6, just now I have mentioned that we are very confident about the sales performance of ES6 after the product ramp-up. And then, for this year, we are very confident of our speaking for all the new products we launched this year, including the ES8. We're about to start the delivery of the ES8 in the near term. And currently, we can see that the reservation order performance is actually higher than our expectations. We believe, right now the current pace of our product quality and the product go-to-market is actually much better than before. So, we believe for these five new products based on the NT2.0 technology platform should be able to reach reasonable performance in terms of the delivery ramp-up. And recently, we have also launched 2023 ET7. After the delivery of ET7, we believe it can also meet our expectations and the auto performance is also quite stable.

[Foreign Language] Sorry, I forget to translate. So, my second question is regarding the margin outlook of the high-end NIO brand versus the low-end ALPS brand. NIO brand remains to be relatively expensive, thanks to the branding and the excellent service company has been offering, but yet to achieve on satisfactory or kind of like excellent margins. So, when you're moving towards ALPS to the relatively lower end, how do you foresee the margin would be like, especially compared to the high-end ones? Thank you.

[Foreign Language] [Interpreted] Thank you for your question. Regarding the brand positioning, I believe right now is a very chaotic period for the brand positioning. For the users -- for most of the users, the majority of the times they choose a product based on the price. So, right now, in terms of our product, our service as well as our technology and experience, we believe we are much better than others in those different areas, but the values of our product and services and the technologies are not reflected in the perceived value and the price of the products. This is the reality that we're facing right now, but we believe for the long run, the value of our product and services will be recognized by the users and by the market. At the same time, we do face some challenges in the macro environment. For example, the lithium carbonate cost has significantly impacted our vehicle gross margin. Back in 2021, we have reached around 20% vehicle gross margin. At that time, we believe the lithium carbonate cost goes back to a reasonable level, we should still have a chance to reach 20% vehicle gross margin. In the long term, we believe in terms of the economies of scale and the efficiency improvement as well as the vertical integration of our core components and the in-house R&D capabilities, there is a strong base for us to achieve a 20% vehicle gross margin. That's for NIO. But for ALPS, the strategy is very different, because we believe that in terms of the vehicle gross margin, it's actually more about how you define the products and how we design the product. So, for ALPS it is about finding the best resolution in the specific segment that ALPS brand target is at. For us, if we look at the market, we see some companies, they sell the product at a price of around RMB200,000, but they can still achieve over 20% vehicle gross margin. So, it shows that this is achievable. For NIO, because we have many high specs configurations in our product, for example, the over 1,000 top computing powers and all those smart features, it will be very difficult for us to lower the cost on those components and this will affect us in terms of lowering the price of our products. But for ALPS is different. When we define ALPS' product, of course, the target for us is to achieve reasonable vehicle gross margin. And we believe it is reasonable and is possible for us to achieve 20% vehicle gross margin.

Thank you so much, William, for your time to sharing. Thank you.

Thank you. Your next question comes from Jing Yang from CICC. Please go ahead.

[Foreign Language] My first question is about our NOP Plus. Our NOP Plus beta version has been opened for several years -- several months. So, can you share the -- some users' data such as usage time or accumulated mileage or average takeover mileage during this period? And how is their feedback? And we can see the official version will be charged for subscription. So, can you share more of your understanding of subscription charge? And also in the second quarter of this year, you can see that highway navigation function to swapping stations were launched. So, what do we think of the improvement of customers' experience with this new function? And last one is, is there any timeframe for our [indiscernible] function in the second half year?

[Foreign Language] [Interpreted] Thank you for your question. I will answer the NOP Plus related question and Steven is going to address the question about the Power Swap stations. For the NOP Plus, right now we have over 50,000 users using the NOP Plus services. And for us, the accumulated mileage of NOP Plus is over 41 million kilometers. And every week the mileage is around 2 million kilometers. We have already started the test of the NOP Plus in the city scenarios and use cases. This year, we're going to accelerate the test of the NOP Plus in the city use cases or the urban use cases. We will also -- when it gets ready, we will also release this feature to the users. Based on our internal evaluation right now, we are very confident regarding the performance of the NOP Plus in the urban scenarios. At the same time, regarding the NAD, we're also doing some tests. And if in the future the regulations and the laws are in the right place for the NOP Plus release, then we will release the -- sorry, we will release the NAD for our users when the regulation is in the right place. And we believe this is probably -- right now, all the R&D of our NOP Plus and NAD is basically on track and according to our schedule.

[Foreign Language] My second question is about the battery swapping station. We can see that you have gotten nearly 1,500 stations at present, now -- and yearly we can see 200 stations has been added since this year. So, have you seen that denser of our battery swapping stations network has been built and is quite good for ourselves -- of our new models, especially for our penetration of lower-tier cities?

Yang, this is Steven. I think the short answer is a very clear, yes. We see -- we have seen a very clear flywheel effect between the Power Swap station network and our sales growth. As just William mentioned, we have already deployed 1,500 Power Swap stations across China. And at the end of the year, the number of Power Swap stations will be right around 2,400. And every day we offer around 60,000 to 70,000 times of Power Swaps to our users. So, in average every day, one Power Swap station offers 40 to 50 times of Power Swaps to our users. So that means, on one hand, our users rely on Power Swap station as their favorite charging method. On other hand, the Power Swap stations are very efficiently utilized. So that's why we see a clear flywheel effect. And that's why we're very determined to accelerate our Power Swap station deployment and also we're very confident that more Power Swap stations will lead to more sales growth. And actually in the [indiscernible] and some Tier-1 cities, we have seen that after all the charging experience improves, our volume also grow. So that's why we're very confident that with more and more Power Swap stations penetrate into the low-tier cities, naturally, NIO sales will lead to a very strong momentum or a solid growth in the low-tier cities. Last, but not least, I think looking forward, as more and more OEMs serious look at Power Swap stations as more or less standard way, the Power Swap stations will become a more and more convenient way for many more EV users.

[Foreign Language]

Thank you.

Thank you. Your next question comes from Vijay Rakesh from Mizuho Securities. Please go ahead.

Yes, hi, just a quick question. Given some of the new ramps with the five-year models, it looks like you're getting a good response from it. Would you expect second half or even third quarter production run rates to get to that 20,000 per month on average? And just wondering what the expectation is on second half to first half deliveries?

[Foreign Language] [Interpreted] Thank you, Vijay, for the question. Of course, for us, the target for the second quarter of this year is to deliver over 20,000 units every month and we're very confident to achieve this target.

Got it. And just one other question. If you look at some of the subsidiaries -- if you look at some of the subsidiaries moving to Tier-2 cities, is that a near-term -- could that be a challenge for NIO, given you don't have enough Swap stations, et cetera in the Tier-2 cities, et cetera? Thanks.

[Foreign Language] [Interpreted] This year our target is to deploy 1,000 additional Power Swap stations and the majority of those Power Swap stations will be deployed on highways and some of them will be installed in the Tier-3 and the Tier-4 cities. We believe that this is going to directly boost the sales performance of our products. Actually, in April, we started the deployment of the Power Swap Station 3.0, and we accelerated the deployment in May. In June, we believe we're going to deploy around 100 Power Swap Station 3.0, and we believe gradually from now on, we're going to speed up the deployment of the Power Swap stations.

Thank you.

Thank you, Vijay.

As there are no further questions at this time, I would now like to turn the call back to the company for closing remarks.

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