NIO STOCK CEO URGENTLY WARNS INVESTORS🚨 FULL SPEECH ENGLISH

Respected President Wang Shia, fellow readers, distinguished guests, good afternoon everyone. It is a great honor to participate in our Chongqing forum again, sharing some new developments for the future and some of our thoughts on the industry. First, let me report on some of our recent situations. Since the second half of last year, the future is entering the third stage of development. We also call this the third stage of high-quality development. A key highlight is our fourth quarter last year. Profitability has been achieved. Indeed, it is not easy because in the first quarter of last year, we still lost quite a bit. In the fourth quarter of last year, we achieved an operating profit of 1.25 billion RMB, and in the first quarter of this year, we achieved a profit of 68 million. It's still not easy. Of course, they are also our main selling products, but it sells relatively well from the first quarter of this year to now. From January this year until now, we have delivered over 150,000 new vehicles cumulatively. All three brands should be said to be year-on-year growing. The year-on-year growth rate for the entire period from January to May is 68.7%. Everyone knows that this year has indeed been a very challenging market for the entire market. We are positioned in the mid to high-end market. Such a brand's lineup able to achieve such growth also reflects the competitiveness of our products and services. In May, we have just begun delivering our executive flagship SUV, the S9. The response is still very good. We should be in the not too distant future. It is expected to reach the delivery of the 10,000th vehicle. Demand is still quite good. Now, of course, our ES8 has been the bestselling large SUV for six consecutive months. It's also over 400,000 regardless of energy form, the sales champion regardless of body form. Then in May, we have also delivered over 11,000 units. It's also high-end in this price range, the only model with sales exceeding 10,000 units. Our ES8 is the third generation ES8. Many records have also been achieved. For example, we delivered over 100,000 units in 215 days. Over 110,000 units delivered in 245 days. As mentioned earlier, it has been the sales champion for six consecutive months. On May 9th, we have just delivered our new Leau L90. Speaking of the L90, actually since the delivery last August, during the same period in the 30,000 unit level in this kind of sales range price range, we also ranked first in sales at the same time. This is regardless of energy type. As for the L80, we officially launched and began deliveries on May 15th. In the 15 days of May, we also delivered nearly 6,000 vehicles, over 5,900 cars, also set a record for the fastest delivery for a large 5-seater pure electric SUV. Just 2 days ago, we just released our 2026 new Leton L60. This should be a 200,000 level, a midsize SUV that is a technological flagship. We also showed everyone our future flagship technology. We fully loaded it into this 200,000 yen into this kind of midsize SUV. The buzz these two days has been very good indeed. The market response is very positive. Of course, our Yinwa Chong car indeed performed better than we expected. Sales volume is quite good. We have been delivering for a year since last April. From delivering to now, even today, there is still a demand exceeding our supply. Need more of this kind of status? We still, if you now order the Yinwong, you still need to wait a while. The waiting time isn't as long now, but you still need to wait. Moreover, in the high-end small car market, its sales volume surpassed the totals of Mini and Smart over twice as much. In the high-end small car market, we occupy about 72% of this kind of share. Also, consistently basically since then, in the high-end small car market sales champion. So actually behind the scenes this reflects a kind of trend from future volume growth because we still have the future. Why does it suddenly feel like we're doing it again? Actually even during the hardest times our sales volume still maintained annual growth of over 30%. Indeed since the second half of last year we entered a new growth cycle. Our expectation for this year is that there's a chance to achieve 40 to 50% growth. The main reason I believe still steadfastly in our judgment of the market on the turning point for pure electric vehicles should still basically meet our expectations. In fact, since the second half of last year, we can clearly see in any emerging market, the penetration rate of pure electric. The market share of pure electric is accelerating significantly. What is the reason behind this? On August 21st last year, when the new ES8 was released, product technology launch event, I brought it up right away. I'm talking about the pure electric big three row version. The era of pure electric large three row SUVs is coming. At that time we made judgments. Actually we look at it from two perspectives. One is what we think pure electric technology for a large SUV like the ES8 experienced the benefits. It is getting higher and higher and many of them are very obvious like the front trunk of our Lauo L90 that is very obvious a user value and the usage ratio of our front trunk beyond the trunk. This one comes from an extended range plug-in hybrid gasoline car experience. It simply cannot be done. There is also the advantage of interior space. Another one it's the charging and battery swapping infrastructure. Rapid popularization later. It is also a quantitative change to a qualitative change using pure electric vehicles. Previously, charging and swapping batteries were inconvenient. Such an experience is a loss getting smaller and smaller. So, we think last year that's the turning point. Users are following the pure electric technology route, bringing experienced benefits. This far exceeds the inconvenience of charging and swapping. Home appliances are inconvenient. The resulting loss of experience. This is a turning point. Actually, let's look at it now. That's still true. The judgment is still correct. Behind this is also our future. We have always been committed to research and development. It has always been in infrastructure construction. Persistence in investing results in one way. It has been established for 11 years. We will accumulate in R&D in the future. Invested more than 68.8 billion RMB. We excel in charging and battery swapping facilities. It also includes our battery swapping technology. Investment in battery swapping services. The cumulative amount also exceeds 20 billion RMB. But our investments in technology and infrastructure. This also earned recognition from users. Actually from the future to some developments after so many years of development such an experience we can actually take a look ourselves. The industry is today. What kind of person should we have? A trend judgment. We believe China's automotive industry is important. In the past two years we have entered a new phase especially starting this year. It should be said that we have entered a new stage of development. We mainly focus on four aspects of this kind of thinking. The first is entering the most brutal stage of the finals. Actually in 2019, we brought it up right away almost 2024 or 2025. You will advance to a final. It's not much different from our judgment. This year's market environment actually it's very difficult especially in the domestic retail market. From January to May, domestic data is based on daily meetings. Domestic retail market. Yes, it has decreased by 19.5% year-on-year. It turns out that in the first quarter, during the time of perhaps everyone still thinks there will be some reasons for last year's policies, some are released in advance. But after entering April and May, actually we should say the industry probably no longer has such illusions. In fact, it has entered June. This is also based on daily data. In fact, the decline is still widening further. Than in May actually it's a bit higher than 19.5%. Probably about 21% dropped by 21%. So in the first few days of June then it has dropped by more than 22%. Will the whole thing go back? Are you saying it will come back in the second half of the year? Will it grow against the trend? We ourselves think our own assessment I don't think so. Annual domestic retail volume. We think it's year-on-year compared to last year. We ourselves must do well. The entire industry should do well down 15% to 20%. This is a mental preparation. Actually, the reasons behind it are not complicated. Mainly, it's still just one. We need to look at the relationship between holdings because of the total number of passenger cars nationwide. In fact, the total number of vehicles in stock is 370 million. You can actually see it too. In fact, many families already have more than one car. Now, the whole car has started to enter one. This is an era of growth for stock. It is not like the original words. It is an era of growth. I think this point could affect the entire industry. I haven't really come to understand this matter yet. I believe that if there is such a perception, in fact, there are many marketing strategies. Product strategies may be somewhat different. Of course, our exports are still very good. Indeed, the entire automotive industry is exported to China. It has brought a major highlight. The export is indeed very good. It is also increasingly becoming a driving force for our growth. So secondly, we think starting this year, pure electric cars have hit a turning point and are picking up speed. If we look at May this year, the penetration rate of new energy vehicles had reached 62.9%. How much of that was pure electric? Pure electric cars made up 67.1%. Within the new energy sector, pure electric's penetration hit 67.1%. Pure electric cars now have a 42.2% penetration rate in the whole auto market. We can make a comparison. Last year at the same time, this number was 31.4%. In just a year, the penetration rate of pure electric cars increased by 10.8 percentage points. This is a significant jump considering it's just been one year. As of May this year, pure electric cars have already taken the top spot among all types of power trains. This 42.2% has already surpassed gasoline cars and all other power types ranking first. We believe this will accelerate even more. It will speed up further. What does the endgame look like? Actually, Norway has given us a great example. Norway's environment for using new energy cars is both cold and humid. It's not the ideal setting, but Norway has already hit a 98% penetration rate for new energy. Out of that 98%, 96% are already pure electric. We believe this trend is unstoppable and it's only going to speed up. Third, what do we think this new stage is about? We've moved from a chaotic brand phase to a formative one. How do we understand this? In the past, when buying cars in the gasoline era, people had strong brand preferences. Should I buy a Japanese car, a German car, a domestic brand, or an American car? Everyone had their own preferences for which brands to buy. Should I get a BMW, a Mercedes, or an Audi? This brand preference was actually quite clear. So, in the new energy era, since the product technology isn't fully developed yet, you've got a lot of new brands popping up. There's been this long chaotic period maybe about six or seven years with lots of brands showing up. New startups and new brands from existing car companies have emerged. So there are quite a bunch of them. But building a brand isn't easy and creating clear user recognition for a brand is not simple. However, at a certain point you realize that the differences between products might not be that big. In the past, people compared features, but now, even with self-driving, the differences aren't as significant, and same goes for range and acceleration. It's all just a bit excessive, and the designs look pretty similar, too. Now, the choice of brand has become more important. Let's also look at a McKenzie survey. Actually, in the new energy vehicle area a year ago, brand choice was only the fifth most important factor, but now it's jumped to second place, and this year has just flown by. There is a lot of support behind a brand. Besides technical products, it also includes the company's values and philosophy. It covers a lot. So, it's not only about product features anymore. This change is really significant and many of our peers are accelerating brand building which we also believe is very crucial. As for the last bit, we believe the whole industry is shifting from single point competition to more systematic competition. In the past, a company could ride on a killer feature like excelling in a certain power mode or having a standout product like a special fridge or massive sofa could gain strong momentum for the whole company. These days, it's not just about how you define your product. It's about the depth of your tech, your supply chain, cost management, quality, production, sales, and service systems. Plus, like I mentioned, the ability to build a brand. It's now a complete system competition evolving from a single point competition to an era of systems competition. This reflects our thoughts on the whole industry stepping into a new phase. Looking to the future. Today's theme is about navigating economic cycles. How to tackle challenges or transition through them. As a car company, we're still pretty young. So, how do we handle this transitional period? We've had lots of internal discussions. We're really staying committed to a few things. First, we need to create value for users and act in their interests. This has been and will be our firm commitment moving forward. Starting last year, our whole company has been driving an organizational transformation so that everyone contributes to creating user value. The goal is to clearly define what value we bring to users with everything we do. We believe this is fundamental to how a business operates. So what's the second point? We'll still make solid investments in tech innovation, but if you look at our R&D spending compared to last year and before, it has decreased a bit. However, our investment in fundamental core tech research and development has actually gone up, not down. We've probably reduced some development in certain applications. What does that mean? If certain car models don't make financial sense for us, we won't develop them. We'd rather cut back on developing such models. Even if there are global market versions, if they don't make financial sense, we simply won't pursue them. We calculate these investments based on the return on investment. If something isn't profitable, we won't do it. But when it comes to underlying core technologies, whether it's our chips, operating systems, autonomous driving materials, high voltage components and systems, or our latest technologies, we will still make resolute investments. So, we will firmly invest in technological innovation. Another area we'll firmly invest in is infrastructure. Today, we will build over 1,000 battery swap stations, and we are absolutely committed to doing that. Another point is that we hope to strengthen and promote industry cooperation through a win-win and symbiosis concept. In fact, if we cooperate, China's automotive industry has tremendous opportunities. Last time at the Beijing 100 Talents Forum, I mentioned that we believe promoting chip standardization and cell standardization can bring the entire industry a cost reduction opportunity worth hundreds of billions. It's not about cutting corners. It's pure gain for everyone. We have always been very open offering our chips, operating systems, and battery swapping networks to the industry. We also cooperate with innovative supply chain companies within the industry. Engaging in deep level collaboration is something we believe the entire industry should tackle together during these challenging transition times. Saving money that doesn't add value for users. We see immense opportunities here. This isn't a zero sum game, but a win-win symbiotic process that creates value for users. So over the past 2 years, we've been saying internally that the automotive industry is like running a marathon on a muddy road. It's not about an easy win or miracles. I've been in this industry since starting to build cars back in 2000, over 20 years now, and I've witnessed many ups and downs. The longer I'm in it, the more I appreciate the importance of mastering the basics. So, over the last two years, we've constantly emphasized perseverance internally with our company, making steady daily progress, achieving long-term success through sustained effort. And we hope to encourage all our industry peers to persevere together.