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 in the not too distant future expect to reach the delivery of the 10,000th vehicle; demand is still quite good. Our ES8 is for six consecutive months the bestselling large SUV over 400,000 regardless of energy form, the sales champion regardless of body form. In May, we have also delivered over 11,000 units. It's 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 delivered our new Leao L90. Since delivery last August, in the 30,000 unit level sales range price range, we ranked first in sales 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. Two days ago, we released our 2026 Leton L60. This should be a 200,000 level midsize SUV that is a technological flagship. We also showed everyone our future flagship technology. We fully loaded it into this 200,000 level midsize SUV. The buzz these two days has been very good indeed. The market response is very positive. Our Yinuo Chong car performed better than we expected. Sales volume is quite good. We have been delivering for a year since last April. From delivering until now, even today, there is still demand exceeding supply. If you now order Yinuo Chong, you still need to wait a while; the waiting time isn't as long now, but you still need to wait. In the high-end small car market, its sales volume surpassed the totals of Mini and Smart by over twice as much. In the high-end small car market, we occupy about 72% share. Since then, it has been the consistent sales champion in the high-end small car market. 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? Even during the hardest times, our sales volume still maintained annual growth of over 30%. 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. Since the second half of last year, we can clearly see in any emerging market, 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 at the 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. 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 Laou L90, that is very obvious a user value, and the usage ratio of our front trunk beyond the trunk. This 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 is the charging and battery swapping infrastructure rapid popularization later. It is a quantitative change to a qualitative change using pure electric vehicles. Previously, charging and swapping batteries were inconvenient; such an experience loss is getting smaller and smaller. So, we think last year that's the turning point. Users are experiencing the benefits of pure electric technology far exceeding the inconvenience of charging and swapping. This is a turning point. Looking at it now, that judgment is still correct. Behind this is 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. Established for 11 years, we will accumulate in R&D, investing more than 68.8 billion RMB. We excel in charging and battery swapping facilities, including our battery swapping technology investment in battery swapping services. The cumulative amount exceeds 20 billion RMB. Our investments in technology and infrastructure earned recognition from users. Looking at our development over these years, we can assess the industry today and what kind of trend judgment we should have. We believe China's automotive industry has entered a new phase, especially starting this year. We focus on four aspects. The first is entering the most brutal stage of the finals. In 2019, we brought up that by 2024 or 2025, we would advance to a final. It's not much different from our judgment. This year's market environment is very difficult, especially in the domestic retail market. From January to May, domestic data based on daily meetings shows domestic retail market decreased by 19.5% year-on-year. It turns out that in the first quarter, perhaps everyone thought there would be reasons from last year's policies, some released in advance. But after entering April and May, the industry probably no longer has such illusions. In June, the decline is still widening, around 21% drop. In the first few days of June, it has dropped by more than 22%. Will it come back in the second half? We ourselves think our own assessment: annual domestic retail volume 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. The reasons behind it are not complicated. Mainly, we need to look at the relationship between holdings because the total number of passenger cars nationwide is 370 million. Many families already have more than one car. Now, the whole car has started to enter an era of growth for stock. This point could affect the entire industry. I don't think I have really come to understand this matter yet. Of course, our exports are still very good. The entire automotive industry's exports from China have brought a major highlight, and it is increasingly becoming a driving force for our growth. Secondly, starting this year, pure electric cars have hit a turning point and are picking up speed. In May this year, the penetration rate of new energy vehicles reached 62.9%. 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. 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. As of May this year, pure electric cars already took the top spot among all types of power trains, surpassing gasoline cars and all other power types ranking first. We believe this will accelerate even more. What does the endgame look like? 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, 96% are pure electric. We believe this trend is unstoppable and it's only going to speed up. Third, we think this new stage is about moving from a chaotic brand phase to a formative one. In the gasoline era, people had strong brand preferences. Should I buy a Japanese, German, domestic, or American car? Everyone had their own preferences for which brands to buy. In the new energy era, product technology isn't fully developed, so many new brands popped up, leading to a long chaotic period. Brand building is not easy. At a certain point, product differences might not be that big. Now, brand choice has become more important. A McKenzie survey shows that a year ago, brand choice was only the fifth most important factor in new energy vehicle area, but now it's jumped to second place. Behind a brand, besides technical products, it includes the company's values and philosophy. This change is significant. Lastly, 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. Now, it's about the depth of tech, supply chain, cost management, quality, production, sales, service systems, and brand building. It's a complete system competition. Looking to the future, today's theme is about navigating economic cycles. As a car company, we're still pretty young. To handle this transition, we are committed to several things. First, create value for users and act in their interests. This has been and will be our firm commitment. Starting last year, our whole company has been driving an organizational transformation so that everyone contributes to creating user value. Second, we'll make solid investments in tech innovation. R&D spending compared to last year has decreased a bit, but our investment in fundamental core tech R&D has actually gone up. We reduced development in certain applications. If certain car models don't make financial sense, we won't develop them. When it comes to underlying core technologies—chips, operating systems, autonomous driving materials, high voltage components and systems, and our latest technologies—we will make resolute investments. Another area we'll firmly invest in is infrastructure. We will build over 1,000 battery swap stations this year. We hope to strengthen and promote industry cooperation through a win-win concept. At the Beijing 100 Talents Forum, I mentioned that promoting chip standardization and cell standardization can bring the entire industry a cost reduction opportunity worth hundreds of billions. 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 cooperate with innovative supply chain companies in deep level collaboration. Saving money that doesn't add value for users is an immense opportunity. This is a win-win symbiotic process. Over the past two years, we've been saying internally that the automotive industry is like running a marathon on a muddy road. I've been in this industry for over 20 years and have witnessed many ups and downs. The longer I'm in it, the more I appreciate the importance of mastering the basics. We've constantly emphasized perseverance, making steady daily progress, achieving long-term success through sustained effort. We hope to encourage all our industry peers to persevere together.