[Management View]
NIO delivered 72,056 smart EVs in Q2 2025, marking a 25.6% YoY growth. Total revenue reached RMB19 billion, up 57.9% QoQ, driven by vehicle sales and other sales such as R&D services and after-sales support. Management emphasized cost optimization through proprietary technology platforms, including the NX9031 smart driving chip and 900V high-voltage architecture. The company is focusing on maximizing production output for existing models, with no new launches planned for 2025.

[Outlook]
NIO expects Q3 deliveries to range between 87,000 and 91,000 units, representing 40.7%-47.1% YoY growth. For Q4, the company targets average monthly deliveries of 50,000 units across three brands, totaling 150,000 units. Vehicle gross margin is projected at 16%-17% for Q4, with flagship models L90 and ES8 targeted at 20%. Non-GAAP operating breakeven is anticipated in Q4, supported by disciplined R&D and SG&A spending.

[Financial Performance]
- Vehicle sales revenue: RMB16.1 billion (+2.9% YoY, +62.3% QoQ).
- Other sales revenue: RMB2.9 billion (+62.6% YoY, +37.1% QoQ).
- Vehicle gross margin: 10.3% (stable QoQ, down from 12.2% YoY).
- Overall gross margin: 10% (up from 7.6% QoQ, stable YoY).
- Non-GAAP operating loss: RMB4 billion (-14% YoY, -32.1% QoQ).
- Non-GAAP net loss: RMB4.1 billion (-9% YoY, -34.3% QoQ).

[Q&A Highlights]
Question 1: What is the capacity ramp-up pace for ES8 and L90, and can December deliveries hit 55,000 units?
Answer: NIO targets full supply chain capacity for L90 at 15,000 units/month by October and ES8 at 150,000 units in December. Q4 delivery target is 150,000 units across three brands, averaging 50,000 units/month.

Question 2: Can Q4 achieve breakeven at the bottom line level, and what are the margin trends for L90 and ES8?
Answer: Q4 vehicle gross margin is expected at 16%-17%, with L90 and ES8 targeted at 20%. Non-GAAP breakeven is anticipated, supported by cost control and competitive pricing enabled by proprietary technology.

Question 3: What are the R&D and SG&A expense targets for Q3 and Q4, and is breakeven based on GAAP or non-GAAP?
Answer: R&D expenses are guided at RMB2 billion per quarter for Q3 and Q4. SG&A expenses are expected to be within 10% of sales revenue in Q4. Breakeven is based on non-GAAP operating metrics.

Question 4: Will the robust demand for L90 and ES8 affect the launch schedule for upcoming models?
Answer: No new models will be launched in 2025 due to capacity constraints. The L80 launch has been delayed, and two new large SUVs (ES9 and ES7) are planned for 2026.

Question 5: How does the pricing strategy for L90 and ES8 impact gross margins and future models?
Answer: Aggressive pricing is supported by cost-efficient product design and proprietary technology. Long-term gross margin targets are 20% for the group, with higher margins for flagship models.

Question 6: What factors contributed to the success of L90 and ES8?
Answer: Success is attributed to advanced technology (900V architecture, NX9031 chip), lightweight design, and optimized cost structure. Supply chain partnerships also played a key role.

Question 7: What is the financial impact of making 100 kWh batteries standard for certain models?
Answer: The change has no major impact on vehicle margins or transaction prices, but it has boosted sales leads for the affected models.

Question 8: What are the cost savings from switching to self-developed chips?
Answer: NX9031 chip offers cost advantages over industry flagship chips, but specific savings per unit were not disclosed.

Question 9: How does pricing for ES8 and L90 affect other models and market trends?
Answer: L90 has boosted L60 sales, while ES8 pricing enhances brand awareness. The market is shifting towards large three-row battery electric SUVs, benefiting NIO's portfolio.

Question 10: What are the OpEx optimization targets for 2025 and 2026?
Answer: R&D expenses are targeted at RMB2 billion per quarter for 2025 and RMB2-2.5 billion for 2026. SG&A expenses aim to achieve higher efficiency and utilization.

Question 11: What is the stabilized sales volume outlook for L90 and ES8?
Answer: Long-term stabilized sales volumes are difficult to predict due to market competition, but NIO aims to prolong their market impact through new sales and marketing paradigms.

[Sentiment Analysis]
Management displayed confidence in achieving aggressive production and margin targets, emphasizing cost control and technological innovation. Analysts were optimistic but sought clarity on breakeven timelines, cost savings, and long-term sales stability.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | YoY Change (%) | QoQ Change (%) |
|----------------------------|-----------------|-----------------|----------------|----------------|
| Vehicle Deliveries | 72,056 | 44,400 | +25.6% | +62.3% |
| Total Revenue (RMB) | 19 billion | 12 billion | +9% | +57.9% |
| Vehicle Gross Margin (%) | 10.3% | 10.2% | -1.9% | Stable |
| Non-GAAP Operating Loss | RMB4 billion | RMB5.9 billion | -14% | -32.1% |
| Non-GAAP Net Loss | RMB4.1 billion | RMB6.2 billion | -9% | -34.3% |

[Risks and Concerns]
1. Supply chain constraints may limit production ramp-up for flagship models.
2. Aggressive pricing strategies could pressure margins if cost efficiencies are not sustained.
3. Dependence on proprietary technology may pose risks if adoption or performance issues arise.
4. Market competition in the EV segment remains intense, potentially impacting sales stability.

[Final Takeaway]
NIO's Q2 2025 results highlight strong revenue growth and improving margins, driven by flagship models L90 and ES8. Management's focus on cost optimization and proprietary technology positions the company for Q4 breakeven on a non-GAAP basis. While supply chain constraints and market competition pose risks, NIO's strategic priorities and aggressive production targets signal confidence in capturing greater market share. Investors should monitor execution on margin improvement and delivery targets in the coming quarters.