Share Structure and Ownership - NIO has 1,570,605,680 Class A ordinary shares with a par value of $0.00025 per share outstanding as of December 31, 2022[4] - NIO has 148,500,000 Class C ordinary shares with a par value of $0.00025 per share outstanding as of December 31, 2022[4] - The dual-class voting structure limits the influence of A-class ordinary shares and ADS holders, with C-class shares holding 8 votes per share compared to 1 vote per A-class share, concentrating significant control in the hands of the founder and CEO[174] - The founder and CEO, Mr. Li Bin, beneficially owns approximately 44.2% of the company's voting rights through entities he controls, significantly influencing major corporate decisions[175] Corporate Structure and Operations - The company operates primarily through its Chinese subsidiaries and variable interest entities (VIEs) in China, with additional subsidiaries in the US, Germany, UK, Norway, and other jurisdictions[8] - The company relies on contractual arrangements with its Chinese subsidiaries and VIEs to maintain financial control and consolidate the VIEs into its financial statements under US GAAP[8] - The company's Cayman Islands holding company does not hold equity in the variable interest entities but has financial control through contractual arrangements[10] - The company's Chinese subsidiaries and variable interest entities have obtained necessary licenses and permits, including ICP and insurance brokerage licenses, crucial for operations[12] Financial Performance and Risks - NIO recorded net losses of RMB 5.3041 billion, RMB 4.0169 billion, and RMB 14.4371 billion ($2.0932 billion) for the years ended December 31, 2020, 2021, and 2022, respectively[30] - NIO experienced a net cash outflow from operating activities of RMB 3.866 billion ($560.5 million) in 2022[30] - The company may continue to record net losses and operating cash outflows due to insufficient demand for its cars and services, increased competition, and challenging macroeconomic conditions caused by COVID-19[31] - NIO's warranty reserve as of December 31, 2022, was RMB 2.9469 billion (USD 427.3 million), which may be insufficient to cover future warranty claims[91] Regulatory and Legal Risks - The company faces uncertainty regarding the enforceability of contractual arrangements with variable interest entities due to potential changes in Chinese laws and regulations[11] - The company may face penalties or restrictions if it fails to obtain or delay approvals for overseas fundraising activities under new Chinese regulations[13] - NIO's American Depositary Shares (ADS) may be delisted from U.S. exchanges if PCAOB cannot fully inspect or investigate auditors in China[26] - The company's operations in China are subject to risks from changes in political, social, or government policies, as well as uncertainties in the legal system[25] Product and Technology Development - The company plans to develop autonomous driving technology through Anhui NIO Zhixing Technology and obtain necessary licenses[8] - The company has delivered cars based on the NIO Technology Platform 2.0 (NT2.0) with partial features of the NAD autonomous driving technology, but cannot guarantee NAD will meet expectations[40] - The company provides two battery options: 70/75 kWh standard range and 100 kWh long-range, with a 150 kWh ultra-long-range battery expected to be delivered in 2023[42] - The company launched the Battery as a Service (BaaS) model on August 20, 2020, offering discounts on car purchases and monthly battery rental fees[57] Market and Competition - Intense competition in the automotive market may lead to decreased sales and increased inventory, exerting downward pressure on prices[45] - The company's competitive advantage in the Chinese EV market could be affected if competitors deliver earlier or offer better prices[45] - The company faces challenges in international expansion, including legal, regulatory, political, and economic risks[46] - Localization of products and compliance with regulatory and safety requirements are significant hurdles in new markets[47] Supply Chain and Manufacturing - The company collaborates with Jianghuai Automobile Group Co., Ltd. (JAC) for car production, paying monthly production fees per vehicle for all existing models[36] - The company's cooperation with Jianghuai Automobile for car production at the F1 factory will expire in May 2024, and the manufacturing cooperation agreement for the F2 factory will expire in September 2025[37] - The company transferred certain equipment and assets to Jianghuai Automobile in December 2022 as part of the manufacturing cooperation agreement[37] - The company faces risks related to production delays and capacity constraints due to reliance on third-party manufacturing partners[37] Data Security and Privacy - The company faces significant challenges in information security and privacy, including the storage, transmission, and sharing of confidential data[59] - Company disclosed a data breach in December 2022 involving user and vehicle sales information from August 2021, which was illegally sold online[60] - Company expects increased focus and scrutiny on data security and data protection compliance from domestic and global regulators, potentially raising compliance costs and risks[61] - The company is subject to China's Data Security Law, effective September 2021, which includes security review procedures for data-related activities affecting national security[63] Strategic Investments and Partnerships - The company invested RMB 42.6 billion in cash and contributed assets worth RMB 177.7 billion to NIO China as part of the Hefei strategic investment agreement[85] - NIO China's registered capital is RMB 6.429 billion, with the company holding a 92.114% controlling interest as of the report date[85] - Hefei strategic investors have minority shareholder rights, including redemption rights at an 8.5% compound annual interest rate under certain conditions[87] - NIO China must apply for a qualified IPO by July 2024 and complete it by July 2025, or Hefei strategic investors may redeem their shares[87] Shareholder and Investor Relations - NIO's American Depositary Shares (ADS) traded between $9.25 and $33.47 in 2022[172] - NIO's A-class ordinary shares traded between HK$70.35 and HK$193.50 from March 10, 2022, to year-end 2022[172] - The company does not expect to pay dividends in the foreseeable future, and shareholders will rely on stock price appreciation for returns[180] - The board has full discretion on dividend payments, which depend on future performance, cash flow, capital needs, and other factors[181] Legal and Compliance Risks - The company faces multiple shareholder class action lawsuits, which could significantly impact its business, financial condition, operating results, cash flow, and reputation[122] - The company's variable interest entity (VIE) structure in China may be deemed non-compliant with foreign investment regulations, potentially leading to severe penalties or loss of business interests[123] - The company relies on contractual arrangements with VIEs and their shareholders for financial control, which may not be as effective as direct ownership[126] - The company's Chinese legal counsel believes the current VIE structure complies with Chinese laws, but there is uncertainty regarding future interpretations and applications of regulations[124] Environmental and Social Risks - The company's operations could be disrupted by safety issues or fires related to lithium batteries stored in its facilities[110] - The company's brand image could be damaged if suppliers fail to comply with ethical business practices or applicable laws[107] - The company's financial and operational performance may be adversely affected by future lithium battery incidents, even if unrelated to its vehicles[110] - The company's IT and communication systems are vulnerable to disruptions from fires, terrorist attacks, natural disasters, power outages, telecom failures, computer viruses, and cyberattacks, which could lead to service interruptions[111] Economic and Market Risks - The company's revenue and financial performance are significantly impacted by China's economic conditions, with a slowdown since 2010 potentially reducing domestic trade[116] - Global economic challenges, including energy price increases and supply chain disruptions due to the Ukraine conflict, may negatively affect the company's international expansion[116] - High-end consumer products, such as the company's electric vehicles, are particularly vulnerable to adverse changes in economic conditions, potentially leading to reduced sales[116] - Recent financial market instability could hinder the company's ability to raise funds under acceptable terms[120] Intellectual Property and Innovation - The company holds 3,703 granted patents and 2,338 pending patents as of December 31, 2022[94] - The company’s pending patent applications may not be approved, and granted patents could face disputes, invalidation, or limited scope[94] - Intellectual property protection in China is less effective compared to the U.S. or other developed countries[93] - Unauthorized use of the company’s intellectual property could harm its revenue and reputation[93] Taxation and Financial Regulations - The company may be classified as a Chinese resident enterprise, subjecting it to a 25% corporate income tax rate on global income and a 10% withholding tax on dividends or interest paid to non-Chinese shareholders[161][162] - If classified as a Chinese resident enterprise, non-Chinese shareholders may face a 20% tax rate on dividends, interest, or gains from transferring ADS or ordinary shares, potentially reduced by tax treaties[162] - Dividends from Chinese subsidiaries to Hong Kong subsidiaries may not qualify for the reduced 5% withholding tax rate under the tax arrangement between Mainland China and Hong Kong[163] - Indirect transfers of Chinese resident enterprise equity by non-Chinese holding companies may be subject to a 10% withholding tax under Chinese tax regulations[164][165] Expansion and Growth Strategy - The company's future performance depends on its ability to manage growth, including expanding production, sales networks, and infrastructure[102] - The company's expansion risks include managing larger organizations, training employees, controlling costs, and entering new markets[102] - The company's future growth depends on the demand for electric vehicles and consumer willingness to use them[70] - The company relies heavily on revenue generated from a limited number of vehicle models, including ES8, ES7, ES6, EC7, EC6, ET7, and ET5[72] Employee and Management Risks - The company's success heavily relies on the efforts of its senior management and core employees, whose departure could disrupt operations[69] - The company faces challenges in attracting and retaining qualified personnel due to high demand and competition in the industry[69] - The company may incur significant costs to train employees in electric vehicle technology and software development[69] - The company does not have "key person" insurance for its core personnel, increasing financial risk if key employees leave[69] Product Liability and Safety - The company faces inherent product liability risks, particularly in the automotive sector, which could lead to substantial financial losses and reputational damage[78] - Vehicles must comply with mandatory safety standards in China and other markets, with non-compliance potentially impacting business operations and performance[79] - Advanced driver-assistance systems (ADAS) and autonomous driving technologies pose regulatory and safety risks, which could lead to legal liabilities and negative publicity[80] - A voluntary recall of 997 ET5 electric vehicles in January 2023 due to safety concerns highlights potential future recall risks and associated costs[81] Market Volatility and Investor Risks - NIO's stock price volatility may be influenced by factors such as quarterly performance, analyst estimates, and market conditions[173] - NIO's stock price could be affected by new product announcements, acquisitions, or strategic partnerships by competitors[173] - NIO's stock price may fluctuate due to currency exchange rate changes between RMB and USD[173] - NIO's stock price could be impacted by legal or regulatory proceedings, including government investigations[173] Financial Instruments and Debt - NIO issued $750 million of 4.50% convertible senior notes due 2024, with no holders exercising their repurchase rights by January 28, 2022[96] - NIO converted approximately $581.7 million of the 2024 convertible notes into American Depositary Shares (ADS) on January 15, 2021[96] - NIO issued $750 million of 0.00% convertible senior notes due 2026 and $750 million of 0.50% convertible senior notes due 2027 in January 2021[98] - NIO repurchased $192.9 million of the 2026 convertible notes in 2022, with a total cash consideration of $170.5 million[99] Government and Regulatory Compliance - The company must comply with anti-corruption, anti-bribery, anti-money laundering, and financial sanctions laws, with violations potentially resulting in significant penalties and reputational damage[111] - The company interacts with government agencies and state-owned entities, increasing compliance risks, and its policies may not fully prevent misconduct[112] - Violations of anti-corruption or financial sanctions laws could lead to whistleblower complaints, negative media coverage, investigations, and severe legal consequences[113] - The company's operations are subject to significant supervision and discretion by the Chinese government, which may impact its business and ADS value[149] Environmental and Sustainability Risks - The company's operations could be disrupted by natural disasters, pandemics, and other outbreaks, which could disrupt car production, sales, and service delivery[115] - In July 2021, the company's car deliveries and energy services were disrupted by floods in Henan and typhoons in Shanghai and neighboring cities[115] - The company's backup systems may not fully protect against data loss or service interruptions caused by disasters or system failures[115] - The company's financial and operational performance may be adversely affected by future lithium battery incidents, even if unrelated to its vehicles[110] International Expansion and Market Risks - The company faces challenges in international expansion, including legal, regulatory, political, and economic risks[46] - Localization of products and compliance with regulatory and safety requirements are significant hurdles in new markets[47] - The company's car rental and leasing services in Europe face risks such as theft, damage, and operational difficulties of partners[48] - Macroeconomic factors and credit assessment errors may lead to higher-than-expected default rates in car rental services[48] Financial Reporting and Internal Controls - The company identified a material weakness in its internal control over financial reporting as of December 31, 2019, which was subsequently remediated by December 31, 2020[105] - The company's financial reporting controls may become ineffective, potentially leading to material misstatements and loss of investor confidence[106] - The company has implemented several remedial measures to address the material weakness in financial reporting, including hiring experienced personnel and enhancing internal controls[105] - The company's financial performance may vary significantly due to seasonal factors and fluctuations in operating costs, particularly in the electric vehicle industry where Q4 typically sees higher demand[83] Shareholder Rights and Governance - The company's amended and restated memorandum and articles of association contain anti-takeover provisions that may significantly adversely affect the rights of Class A ordinary shares and ADS holders[186] - Shareholders may face difficulties in protecting their rights under Cayman Islands law, and their ability to enforce rights through U.S. courts may be limited[187] - The company follows home country practices rather than certain NYSE corporate governance standards, which may result in lower protection for shareholders compared to U.S. domestic issuers[188] - Overseas regulators face significant legal and practical obstacles in conducting investigations or collecting evidence within China[189] Investor Relations and Market Perception - The company's A-class ordinary shares and/or American Depositary Shares (ADS) may be negatively impacted by adverse changes in analyst recommendations or coverage, potentially leading to a decline in market price and trading volume[174] - Short-selling activities, such as the report by Grizzly Research LLC in June 2022, can lead to market price instability and negative publicity, even if allegations are unfounded[177] - The company may face future short-selling attacks, which could result in costly investigations, management distraction, and potential harm to shareholder value[178] - Large-scale sales or the anticipation of sales of A-class ordinary shares and/or ADS could adversely affect their market price and the company's ability to raise capital through equity offerings[179] Financial and Operational Risks - The company's ability to secure financing depends on market conditions and investor acceptance of its business plan, which could impact the timing, amount, and terms of funding[89] - The company's future debt securities may impose operational restrictions, such as limiting new debt, dividend payments, or share repurchases[90] - The company's convertible bond terms could delay or prevent acquisition attempts, potentially affecting shareholder interests[90] - The company's warranty program includes a 3-year or 120,000 km warranty for the entire vehicle and an 8-year or 120,000 km warranty for key EV components in China[91] Legal and Regulatory Risks - The company faces potential patent or trademark infringement claims, which could result in significant costs and operational disruptions[92] - A German automaker has filed an infringement lawsuit against the company, alleging similarity in vehicle designs, with ongoing legal proceedings[92] - The company’s pending patent applications may not be approved, and granted patents could face disputes, invalidation, or limited scope[94] - The company’s limited liability insurance coverage may expose it to significant costs and business interruptions[95] Market and Economic Risks - The company's revenue is predominantly generated in China, with all manufacturing activities conducted there, making it highly sensitive to China's economic, political, and legal developments[138] - Uncertainties in the interpretation and enforcement of Chinese laws and regulations may limit legal protections for the company[139] - The newly enacted Foreign Investment Law introduces uncertainties regarding the classification and treatment of variable interest entities (VIEs) under foreign investment regulations[140] - The Foreign Investment Law's "negative list" could classify certain business activities as restricted or prohibited, potentially invalidating existing contractual arrangements[141] Financial and Operational Risks - The company may face penalties or delays in obtaining approval from the China Securities Regulatory Commission (CSRC) for overseas listings or capital raising activities, which could significantly impact its operations and financial performance[142] - Non-compliance with the Overseas Listing Filing Rules could result in fines ranging from RMB 1 million to RMB 10 million for the company and RMB 500,000 to RMB 5 million for responsible individuals[143] - The company is not required to file with the CSRC immediately under the Overseas Listing Filing Rules but must do so for subsequent financing or other specified events[143] - The company may be required to suspend overseas listings or future capital raising activities before settlement and delivery of proceeds, adding uncertainty to its operations[144] Regulatory and Compliance Risks - The company operates in industries (automotive and internet) that are heavily regulated in China, with evolving laws that may lead to government investigations or penalties[145] - The company relies on contractual arrangements with Beijing NIO and its subsidiaries to hold an ICP license, and plans to transfer internet service business to Beijing NIO if required[146] - The company's mobile applications are regulated by the "Mobile Internet Application Information Service Management Regulations" effective from August 1, 2022, and non-compliance could lead to penalties[146] - The

Financial Performance - Total revenue for Q3 2022 reached RMB 13.0021 billion (USD 1.8278 billion), an increase of 32.6% year-over-year and 26.3% quarter-over-quarter[5]. - Vehicle deliveries in Q3 2022 amounted to 31,607 units, a historical high, representing a 29.3% increase year-over-year and a 26.1% increase quarter-over-quarter[4]. - Vehicle sales revenue for Q3 2022 was RMB 11.9327 billion (USD 1.6775 billion), up 38.2% year-over-year and 24.7% quarter-over-quarter[8]. - Gross profit for Q3 2022 was RMB 1.7351 billion (USD 243.9 million), down 12.9% year-over-year but up 29.5% quarter-over-quarter[13]. - Operating loss for Q3 2022 was RMB 3.8703 billion (USD 544.1 million), a 290.2% increase year-over-year and a 36.0% increase quarter-over-quarter[6]. - Net loss for Q3 2022 was RMB 4.1108 billion (USD 577.9 million), a 392.1% increase year-over-year and a 49.1% increase quarter-over-quarter[7]. - Other sales revenue for Q3 2022 was RMB 1.0694 billion (USD 150.3 million), down 8.5% year-over-year but up 48.2% quarter-over-quarter[12]. - The total comprehensive loss for the three months ended September 30, 2022, was RMB 3,678.51 million[35]. Cash and Assets - Cash and cash equivalents, restricted cash, short-term investments, and long-term deposits totaled RMB 51.4 billion (USD 7.2 billion) as of September 30, 2022[7]. - As of September 30, 2022, the total assets of NIO Group amounted to RMB 96,877,215 thousand (approximately USD 13,618,783 thousand), reflecting a significant increase from RMB 82,883,601 thousand as of December 31, 2021[32]. - Cash and cash equivalents as of September 30, 2022, were RMB 18,080,674 thousand (approximately USD 2,541,741 thousand), an increase from RMB 15,333,719 thousand as of December 31, 2021[32]. - The total current liabilities increased to RMB 39,729,428 thousand (approximately USD 5,585,074 thousand) as of September 30, 2022, from RMB 29,198,152 thousand as of December 31, 2021[33]. - NIO Group's inventory as of September 30, 2022, was RMB 6,671,568 thousand (approximately USD 937,874 thousand), significantly higher than RMB 2,056,352 thousand as of December 31, 2021[32]. Research and Development - R&D expenses for Q3 2022 were RMB 2.9445 billion (USD 413.9 million), a 146.8% increase year-over-year and 37.0% increase quarter-over-quarter[15]. - The R&D expenses for the three months ended September 30, 2022, were RMB 2,944.52 million, representing a significant investment in technology development[36]. Future Outlook - In Q4 2022, the company expects vehicle deliveries to be between 43,000 and 48,000 units, representing a growth of approximately 71.8% to 91.7% compared to Q4 2021[24]. - The projected total revenue for Q4 2022 is between RMB 17.368 billion (USD 2.442 billion) and RMB 19.225 billion (USD 2.703 billion), reflecting a growth of approximately 75.4% to 94.2% year-over-year[24]. - The company has indicated plans for market expansion and new product development, although specific details were not disclosed in the earnings call[34]. Share Issuance - The company issued 8,805,770 Class A ordinary shares on August 23, 2022, due to the conversion of certain convertible preferred bonds maturing in 2022[23]. - On November 4, 2022, the company issued 18,000,000 Class A ordinary shares to Deutsche Bank Trust Company Americas for future stock option exercises under its 2018 equity incentive plan[23]. Competitive Position - The company is a pioneer in the high-end smart electric vehicle market, focusing on innovation in autonomous driving, digital technology, and electric powertrains[26]. - The product lineup includes flagship SUVs ES8, ES7 (or EL7), ES6, EC6, and sedans ET7 and ET5, catering to various market segments[26]. - The company emphasizes its leading battery swapping technology and battery-as-a-service (BaaS) model as key competitive advantages[26]. Management and Governance - The company launched its first ESG report on September 30, 2022, detailing its management and performance in environmental, social, and governance aspects[10]. - The management will hold an earnings conference call on November 10, 2022, to discuss the financial results and future outlook[25]. - The company uses non-GAAP financial measures to assess its operating performance, excluding stock-based compensation expenses[28]. - The company acknowledges inherent risks and uncertainties that may cause actual results to differ significantly from forward-looking statements[27].

Financial Performance - In Q2 2022, NIO delivered 25,059 vehicles, a 14.4% increase year-over-year but a 2.8% decrease from Q1 2022[5] - Total revenue for Q2 2022 reached RMB 10.2924 billion (USD 1.5366 billion), representing a 21.8% year-over-year increase and a 3.9% increase from Q1 2022[6] - Vehicle sales in Q2 2022 amounted to RMB 9.5708 billion (USD 1.4289 billion), up 21.0% year-over-year and 3.5% quarter-over-quarter[8] - NIO reported a net loss of RMB 2.7575 billion (USD 0.4117 billion) in Q2 2022, a 369.6% increase compared to Q2 2021 and a 54.7% increase from Q1 2022[7] - The operating loss for Q2 2022 was RMB 28.456 billion (USD 4.248 billion), a 272.8% increase year-over-year and a 30.0% increase from Q1 2022[6] - Adjusted net loss for Q2 2022 was RMB 22.670 billion (USD 3.385 billion), reflecting a 575.1% increase year-over-year and a 73.1% increase from Q1 2022[7] - Gross profit for Q2 2022 was RMB 1.3403 billion (USD 200.1 million), a decrease of 14.8% year-over-year and 7.4% quarter-over-quarter, with a gross margin of 13.0%[13] - The company expects vehicle deliveries for Q3 2022 to be between 31,000 and 33,000 units, representing a year-over-year growth of approximately 26.8% to 35.0%[22] - Total revenue for Q3 2022 is projected to be between RMB 12.845 billion (USD 1.918 billion) and RMB 13.598 billion (USD 2.030 billion), reflecting a year-over-year growth of approximately 31.0% to 38.7%[22] Cash and Assets - As of June 30, 2022, NIO had cash and cash equivalents totaling RMB 54.4 billion (USD 8.1 billion)[7] - Cash and cash equivalents, restricted cash, and short-term investments totaled RMB 54.4 billion (USD 8.1 billion) as of June 30, 2022[21] - As of June 30, 2022, NIO Group reported total assets of RMB 93.90 billion, an increase from RMB 82.88 billion as of December 31, 2021, representing a growth of approximately 13.4%[30] - The total liabilities of NIO Group increased to RMB 58.20 billion as of June 30, 2022, up from RMB 44.82 billion at the end of 2021, marking a rise of about 30%[31] Research and Development - R&D expenses for Q2 2022 were RMB 2.1495 billion (USD 320.9 million), an increase of 143.2% year-over-year, primarily due to increased personnel costs and new product development[15] - Research and development expenses for the six months ended June 30, 2022, were RMB 3,911,166, up from RMB 1,570,214 for the same period in 2021, representing an increase of about 149%[35] Vehicle Sales and Production - The production and delivery of the ES7, a new model based on the NIO Technology 2.0 platform, began in August 2022[9] - Vehicle sales revenue for Q2 2022 was RMB 9.5708 billion (USD 1.4289 billion), up 21.0% year-over-year and 3.5% quarter-over-quarter, driven by increased delivery volume and higher average selling prices[12] - Vehicle gross margin for Q2 2022 was 16.7%, down from 20.3% in Q2 2021 and 18.1% in Q1 2022, mainly due to increased battery costs[14] Strategic Focus and Innovations - NIO aims to expand its manufacturing capacity and enhance customer energy solutions, including the Battery as a Service (BaaS) and Autonomous Driving as a Service (ADaaS) offerings[25] - The company is committed to continuous technological breakthroughs and innovations to maintain its competitive edge in the electric vehicle market[24] - The company plans to continue investing in new product development and market expansion strategies to drive future growth[52] - The company is focusing on enhancing its technology and product offerings to improve competitive positioning in the market[52] Corporate Governance - The company has established a nomination and environmental, social, and governance (ESG) committee, which consists of independent non-executive directors, including Ms. Long Yu as the chairperson[62] - The committee reviewed the company's compliance with corporate governance policies and legal regulations, ensuring adherence to the Hong Kong Listing Rules[63] - The committee monitored potential conflicts of interest between shareholders and different voting rights beneficiaries, ensuring proper management of these risks[63] - The committee is committed to ensuring effective communication with shareholders, particularly regarding the requirements of the Hong Kong Listing Rules[64] Shareholder Information - As of June 30, 2022, Li Bin controls a total of 148,500,000 Class C ordinary shares, representing approximately 44.4% of the voting rights outside of certain reserved matters[53] - Upon conversion of all issued and outstanding Class C ordinary shares to Class A ordinary shares, the company will have 148,500,000 Class A ordinary shares, accounting for about 8.9% of the issued share capital as of June 30, 2022[54] - The company adopted the thirteenth version of the amended and restated articles of association on August 25, 2022, to incorporate applicable provisions including those under the Hong Kong Listing Rules[55]

Financial Performance - Total revenue for Q1 2022 reached RMB 9.9106 billion (USD 1.5634 billion), an increase of 24.2% year-over-year and 0.1% quarter-over-quarter[5]. - Vehicle sales revenue for Q1 2022 was RMB 9.244 billion (USD 1.4582 billion), up 24.8% year-over-year and 0.3% quarter-over-quarter[9]. - Gross profit for Q1 2022 was RMB 1.4468 billion (USD 228.2 million), a decrease of 6.9% year-over-year and 14.9% quarter-over-quarter[15]. - Operating loss for Q1 2022 was RMB 2.1887 billion (USD 345.3 million), a 639.7% increase year-over-year but a 10.5% decrease quarter-over-quarter[7]. - Net loss for Q1 2022 was RMB 1.7827 billion (USD 281.2 million), a 295.3% increase year-over-year and a 16.8% decrease quarter-over-quarter[8]. - The total sales, general, and administrative expenses for the quarter were RMB 2.015 billion, up from RMB 1.802 billion, reflecting a 12% increase year-over-year[39]. - The company reported a significant increase in sales, with total costs amounting to RMB 12.240 billion for the quarter, compared to RMB 11.767 billion in the same quarter last year, marking a 4% increase[39]. - The net loss for the three months ended March 31, 2022, was RMB 1.783 billion, compared to RMB 1.310 billion in the same period last year, representing a 36% increase[39]. Vehicle Deliveries - Vehicle deliveries in Q1 2022 amounted to 25,768 units, representing a 28.5% increase compared to Q1 2021 and a 2.9% increase compared to Q4 2021[4]. - The company achieved a record quarterly delivery of 25,768 vehicles in Q1 2022 and surpassed 200,000 cumulative vehicle deliveries in May 2022[12]. - In April 2022, the company delivered 5,074 vehicles, and in May 2022, it delivered 7,024 vehicles, bringing total deliveries to 204,936 units by May 31, 2022[10]. - Vehicle deliveries are expected to be between 23,000 and 25,000 units, representing a growth of approximately 5.0% to 14.2% compared to Q2 2021[25]. Cash and Investments - As of March 31, 2022, cash and cash equivalents, restricted cash, and short-term investments totaled RMB 53.3 billion (USD 8.4 billion)[8]. - The cash and cash equivalents stood at RMB 15,900,150 thousand as of March 31, 2022, compared to RMB 15,333,719 thousand at the end of 2021, representing an increase of approximately 3.7%[33]. - The total current assets as of March 31, 2022, were RMB 64,308,455 thousand, slightly up from RMB 63,641,315 thousand at the end of 2021, marking an increase of about 1.0%[33]. Research and Development - R&D expenses in Q1 2022 were RMB 1.7617 billion (USD 277.9 million), an increase of 156.6% year-over-year[17]. - Research and development expenses for the same period were RMB 1.762 billion, up from RMB 1.514 billion, indicating a 16% increase year-over-year[39]. - Research and development expenses for the first quarter of 2022 were RMB 1,761,687 thousand, a decrease from RMB 1,828,516 thousand in the previous quarter, reflecting a reduction of approximately 3.7%[36]. Market Position and Strategy - NIO aims to create a community centered around smart electric vehicles, emphasizing innovation in autonomous driving and battery technologies[26]. - The company has launched several high-end smart electric vehicles, including the ES8, ES6, EC6, ET7, and ET5, with deliveries starting from 2018 to 2022[27]. - NIO's innovative technologies include battery swapping (BaaS) and autonomous driving subscription services (ADaaS), which are expected to enhance its market position[26]. - The company is focusing on expanding its market presence and developing new technologies, although specific details were not disclosed in the earnings call[42]. - The company plans to launch the ET5 in September 2022 and the ES7 in August 2022, expanding its product lineup[12]. Financial Metrics and Adjustments - NIO uses non-GAAP financial metrics to assess operational performance, excluding stock-based compensation expenses to provide clearer insights into business trends[29]. - The company encourages investors to consider a comprehensive review of financial data rather than relying solely on non-GAAP metrics[30]. - The financial data presented is preliminary and subject to potential adjustments during the year-end audit, which may lead to significant differences[32]. - The exchange rate used for converting RMB to USD is set at 6.3393 RMB per 1 USD, based on the rate as of March 31, 2022[31]. Assets and Liabilities - As of March 31, 2022, NIO Group reported total assets of RMB 87,194,294 thousand, an increase from RMB 82,883,601 thousand as of December 31, 2021, representing a growth of approximately 5.8%[33]. - The total liabilities increased to RMB 49,708,039 thousand as of March 31, 2022, up from RMB 44,820,178 thousand at the end of 2021, indicating a rise of about 10.5%[35]. - NIO Group's total equity attributable to shareholders was RMB 33,940,237 thousand as of March 31, 2022, a decrease from RMB 34,709,924 thousand at the end of 2021, indicating a decline of about 2.2%[35].

Share Structure and Stock Information - As of December 31, 2021, NIO had 1,415,333,557 shares of Class A common stock outstanding, 128,293,932 shares of Class B common stock outstanding, and 148,500,000 shares of Class C common stock outstanding[3] - All Class B common stock was converted into Class A common stock on March 10, 2022[3] - The total number of shares outstanding increased to 1,643,669,180 in 2021 from 1,526,539,388 in 2020, reflecting potential dilution[35] Business Operations and Market Focus - NIO is registered as a large accelerated filer under the Securities Exchange Act[5] - The company operates in the electric vehicle market, focusing on pure electric passenger vehicles[7] - NIO's market strategy includes expanding its presence in the Chinese market, excluding Hong Kong, Macau, and Taiwan[7] - NIO's operational headquarters is located in Shanghai, China[2] - The company has established subsidiaries in the US, Germany, the UK, Norway, and other jurisdictions to promote its services and business[15] Financial Performance and Revenue - Total revenue for 2021 reached RMB 36,136,423 thousand, a significant increase from RMB 16,257,933 thousand in 2020, representing a growth of approximately 122%[32] - Vehicle sales in 2021 amounted to RMB 33,169,740 thousand, up from RMB 15,182,522 thousand in 2020, indicating a growth of about 118%[32] - Gross profit for 2021 was RMB 6,821,433 thousand, compared to a gross loss of RMB 1,198,822 thousand in 2019, showing a substantial turnaround[32] - The company reported a total comprehensive loss of RMB 4,223,070 thousand in 2021, down from RMB 5,166,486 thousand in 2020, showing a reduction in losses[33] Research and Development - The company is committed to developing new products and technologies, including advanced driver assistance systems (ADAS)[7] - Research and development expenses in 2021 totaled RMB 4,591,852 thousand, an increase from RMB 2,487,770 thousand in 2020, reflecting a growth of approximately 84%[32] Risks and Uncertainties - NIO's financial performance is subject to various risks and uncertainties, which may lead to significant differences from forward-looking statements[10] - The electric vehicle industry is expected to grow, but actual growth may not align with market data predictions, impacting NIO's business and stock prices[11] - The company faces significant risks related to regulatory changes in China that could impact its business operations and financial performance[41] - The company has not yet achieved profitability and continues to face challenges as a new entrant in the automotive industry[39] Regulatory and Compliance Issues - The company relies on contractual arrangements with its variable interest entities to operate in China due to regulatory restrictions on foreign investment[15] - There is significant uncertainty regarding the interpretation and application of current and future Chinese laws affecting the company's contractual arrangements with VIEs[20] - The Chinese government has substantial power to regulate the company's operations, which may severely restrict its ability to issue securities[21] Cash Flow and Liquidity - The company has not declared or paid any cash dividends and currently has no plans to do so in the foreseeable future, intending to retain most of its available funds for business operations and expansion[29] - The company’s ability to pay dividends and repay debts may depend on the dividends paid by its Chinese subsidiaries and the service fees paid by its variable interest entities[24] - The company’s cash flow from its operations in China is subject to various restrictions under Chinese laws and regulations, which may impact its financial flexibility[25] Supply Chain and Production Challenges - The semiconductor chip supply shortage has negatively impacted production activities, leading to temporary suspensions of vehicle production in March 2021 and April 2022[85] - The company may face increased operational costs due to rising raw material prices and potential supply disruptions[82] - The company is reliant on partnerships for battery rental services, which poses risks if these partners do not operate smoothly[39] Strategic Partnerships and Collaborations - The company has entered into a cooperation framework agreement with the Hefei government, involving a total cash investment of RMB 70 billion from strategic investors and an asset contribution of RMB 177.7 billion from the company[117] - The partnership with Jianghuai Automobile may face risks, including production delays and potential disputes, which could adversely affect business performance[57] Intellectual Property and Legal Risks - The effectiveness of intellectual property protection in China is generally considered weaker than in the U.S. and other developed countries, posing risks to the company's proprietary rights[133] - The company may need to defend against patent or trademark infringement claims, which could lead to substantial costs and operational challenges[130] Employee and Management Considerations - The company’s ability to attract and retain skilled employees is critical for its operations and growth, particularly in the development of new technologies and vehicle models[45] - The company relies heavily on its senior management and core employees, and any loss of key personnel could disrupt operations and negatively impact financial performance[97] Market Competition and Consumer Demand - The automotive market is highly competitive, with the company strategically entering the high-end electric vehicle segment, facing significant competition from both domestic and international players[74] - Future growth depends on the demand for electric vehicles and consumer willingness to use them[99] Environmental and Safety Considerations - The company has experienced safety incidents related to lithium batteries, leading to a voluntary recall of 4,803 ES8 vehicles in 2019[159] - Compliance with mandatory safety standards for vehicles is crucial, as failure to meet these standards could have a detrimental impact on the company's business and operating performance[110] Data Security and Privacy - The company collects user data from its vehicles to enhance diagnostics and optimize user experience, but faces legal and reputational risks if data is mishandled[87] - The evolving regulatory landscape in China regarding data protection may lead to increased compliance costs and operational challenges[88] Future Outlook and Growth Strategy - The company aims to launch at least one new vehicle model annually as part of its growth strategy, but delays in production and release could adversely affect market share and growth prospects[65] - The company anticipates significant capital expenditures in the foreseeable future due to expansion plans, including R&D and the establishment of service networks[123]