NIO Inc. American depositary shares, each representing one Class A ordinary share 2026 Q2 Earnings Call

Please go ahead, Rui. Good morning and good evening, everyone.

Welcome to NIO's second quarter 2026 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website. On today's call, we have Mr. William Li, Founder, Chairman of the Board, and Chief Executive Officer, and Mr. Stanley Qu, Chief Financial Officer. 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 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. Hello, everyone, and thank you for joining NIO Inc.'s 2026 Q2 earnings call.

In Q2, the company delivered a total of 107,658 smart EVs, achieving year-over-year growth of 49.4%.

In Q2, the NIO, ONVO, and Firefly brands all achieved year-over-year and quarter-over-quarter growth in both sales volume and average transaction price. More specifically, the NIO brand delivered 60,945 vehicles, leading China's passenger vehicle market with transaction prices above 350,000 RMB across all powertrain types. The ONVO brand delivered 29,124 vehicles, demonstrating strong growth momentum. The Firefly brand delivered 17,589 vehicles, maintaining its leadership in the high-end compact car market.

In July and August, the company delivered 35,534 and 35,836 vehicles respectively. In Q3, the total deliveries are expected to range between 108,000 and 111,000 units.

On the financial side, in Q2, the company's gross margin stood at 18.4%, driven by continued strong performance from the higher-margin products and ongoing cost optimization. Despite pressure from sharply rising raw material and chip costs, the vehicle gross margin remained solid at 18.5%. The gross margin of other sales was 17%, with services and community-related businesses continuing to contribute to profitability.

On the financial side, in Q2, the company's gross margin stood at 18.4%, driven by continued strong performance from the higher-margin products and ongoing cost optimization. Despite pressure from sharply rising raw material and chip costs, the vehicle gross margin remained solid at 18.5%. The gross margin of other sales was 17%, with services and community-related businesses continuing to contribute to profitability.

In Q2, the company continued to generate non-GAAP operating profit, as well as positive operating cash flow and free cash flow, further increasing its cash reserves to RMB 56.7 billion. This helped strengthen the company's business fundamentals while laying solid groundwork for its long-term sustainable development.

接下来我跟大家交流一下公司产品研发和运营方面的进展。 Now turning to our product R&D and operations.

蔚来品牌方面，7月9日全场景科技旗舰SUV ES8大五座版正式上市，并随后开启交付，以大五座空间优势更好地满足用户多元化全场景的出行需求。全新ES8上市以来，市场表现持续强劲，上市335天即实现第14万辆新车交付，在40万级乘用车市场以及大型SUV市场均保持领先。在捷兰路用户净推荐值研究中，蔚来ES8位列纯电车型第一，实现销量与用户口碑的双冠军。与此同时，科技行政旗舰SUV ES9 5月底开始交付，在逐步转化传统豪华燃油SUV的用户群体。6月及7月在中国成交价50万以上的乘用车市场销量位居第一。旗舰车型的持续放量，进一步巩固蔚来品牌在高端纯电市场的领先优势。 For the NIO brand, on July 9th, the flagship SUV ES9 launched and began deliveries of the five-seat version, catering to more diverse user needs and scenarios with its five-seat layout and spacious interior.

The ES8 has maintained strong momentum since launch and achieved the 140,000 units delivery milestone in just 335 days, leading China's passenger vehicle segment in the RMB 400,000 price range and the large SUV segment. In the Net Promoter Score survey by J.L.Ro, the new ES8 achieved the highest NPS among BEVs, ranking first in both sales volume and product reputation. In the meantime, the flagship executive SUV ES9, which began deliveries in late May, has started winning over users from traditional luxury fuel-powered SUVs, leading in sales volume among passenger vehicles with transactional prices above RMB 500,000 in June and July.