Ben Wang

Ben Wang asked for a breakdown of the drivers behind NIO's significant Q3 margin jump, specifically quantifying the contribution from the ONVO L90's volume and from cost reduction efforts. He also inquired about the business model and rationale behind NIO's latest chip joint venture with Accelra, including whether it's a sales company, a chip-making entity, and if license fees are involved.

Answer

CEO William Li explained that Q3 vehicle gross margin improvement was primarily driven by cost reduction from the supply chain due to increased sales volume, and the sales and delivery of the high-margin ONVO L90. CFO Stanley Yu Qu provided specific model margins: new ES8 at 20%, ET5/ET5T between 15-20%, ES6/EC6 over 20% (up to 25%), and L90 between 15-20%. Regarding the chip joint venture, William Li clarified that it leverages partners to sell NIO's chip and IC design capabilities to other clients, acting as a Tier 1 provider. He noted it's not an exclusive partnership and sees opportunities for non-automotive applications, highlighting the partners' experience and network as a win-win.

Ben Wang from Deutsche Bank asked for a detailed breakdown of the 4.4% margin jump in Q3 2025, specifically quantifying the contribution from the ONVO L90's volume versus cost reduction efforts. He also inquired about the rationale behind NIO's chip joint venture with Accelra, its business model, and any potential license fees.

Answer

William Li, Founder, Chairman, and CEO of NIO, and Stanley Yu Qu, CFO, explained that the Q3 vehicle gross margin improvement was primarily driven by supply chain cost reduction due to increased sales volume and the delivery of the high-margin ONVO L90. Stanley Yu Qu provided specific vehicle margin ranges: ES8 at 20%, ET5/ET5T at 15-20%, ES6/EC6 over 20% (up to 25%), and L90 at 15-20%. Regarding the chip JV, William Li clarified it's a partnership to sell NIO's in-house chip and IC design capabilities to automotive and non-automotive clients, leveraging partners' experience and resources for a win-win collaboration.

Ben Wang of Deutsche Bank requested clarification on the company's Q4 breakeven target. He asked for specific guidance on R&D and SG&A expenses for Q3 and Q4, and whether the breakeven goal was for the operating or net profit level, on a GAAP or non-GAAP basis.

Answer

A moderator, speaking for management, clarified that the quarterly breakeven target is on a non-GAAP basis. They guided for non-GAAP R&D expenses to be approximately RMB 2 billion per quarter for Q3 and Q4. For SG&A, the target for Q4 is to be within 10% of sales revenue as volumes increase and efficiencies are realized.

Ben Wang inquired about the outlook for fare charging revenues, especially given the significant growth observed in Q3 2025, as Pony AI deploys more vehicles.

Answer

Leo Wang, CFO, reported that Q3 fare charging revenue surged 233%, even before the commercial rollout of Gen-7 vehicles. This growth was driven by robust user demand in Tier 1 cities, evidenced by a doubling of registered users year-over-year in Q3, and operational optimizations like enhanced fleet dispatching, a 50% reduction in wait times compared to Q3 2024, and expanded pickup/drop-off points (over 10,000 in Shenzhen). He anticipates sustained strong growth with exponential fleet expansion, leading to better network effects, higher utilization, and increased average order value.