Jim Chang

Jim Chang asked a follow-up question regarding NIO's R&D expense, specifically how the company allocates its limited R&D budget, balances short-term efficiency with long-term goals, and manages increasing industry investment in intelligence and AI-related areas, given the recent decrease in R&D expenses.

Answer

CEO William Li stated that the primary focus for R&D activities this year has been improving efficiency and prioritizing projects, with the CBU mechanism playing a crucial role. He assured that NIO would maintain its 12 full-stack R&D capabilities and long-term competitiveness, noting that significant past investments in fundamental technologies (chips, operating systems, intelligent chassis, 900-volt architecture) mean future iterations will be less costly. He emphasized continuing R&D intensity in AI (smart driving, Nomi, internal tools) but in a more efficient way, leveraging algorithms, data, and collective AI from vehicles to achieve computing performance with less investment, focusing on return on investment.

Jim Chang from CICC asked a follow-up question regarding the significant decrease in R&D expenses in Q3 2025, questioning how NIO allocates its R&D budget, balances short-term efficiency with long-term goals, especially given increasing industry investment in intelligence and AI.

Answer

William Li, Founder, Chairman, and CEO of NIO, explained that the R&D expense reduction was achieved by improving efficiency and prioritizing projects, particularly through the CBU mechanism, without compromising long-term competitiveness. He noted that significant foundational R&D investments in previous years (chips, OS, chassis, 900V platform) mean subsequent iterations are less costly. Li affirmed continued R&D intensity in AI (smart driving, Nomi, internal management) but with a focus on efficiency, leveraging algorithms, data, and NIO's closed-loop data system to achieve results with less computing power than competitors.