<p>On the evening of March 5th, NIO-SW presented a mixed bag of fourth-quarter and full-year earnings report. Despite the company's Q4 gross margin of 11.9%, maintaining double digits for two consecutive quarters, expenses also increased significantly, leading to an operating loss higher than market expectations.</p>
<p>During the conference call following the financial report announcement, the NIO-SW management elaborated on the upcoming multi-brand strategy and cost control efficiency plan.</p>
<p>Chairman Li Bin stated that a new brand targeting the mass market will be launched in the second quarter, with the first product set to be released in the third quarter and mass deliveries in the fourth quarter. Li Bin mentioned that the new brand, adopting a battery-swapping model, will compete with Tesla's best-selling Model Y but at a 20% lower price; the second model of the new brand is an SUV for large families, currently in the mold development stage with smooth progress in R&amp;D; the third product is already in the development process. Li Bin also emphasized that the new brand will focus on sales volume, while the main brand will ensure gross profit margins.</p>
<p>Here is an excerpt from the analyst Q&amp;A session:</p>
<h2>Q1: Can you share more details about the second brand, Alps?</h2>
<p>The Alps brand targeting the mass market will be officially announced in the second quarter. The plan is to release the first Alps product in the third quarter and start mass deliveries in the fourth quarter. The first model of Alps was already offline in Q4 last year, and the company is very satisfied internally.</p>
<p>Alps will have a separate sales network, after-sales system, and battery-swapping network, partially shared with the main brand. The main brand will retain some exclusive battery-swapping stations. It's like the relationship between private and public clouds.</p>
<p>The fourth-generation battery-swapping stations will be compatible with the new brand and other car brands, with construction starting in April. NIO-SW has reached agreements with several companies to promote the sharing of public energy replenishment facilities.</p>
<h2>Q2: What is the full-year profit target for 2024?</h2>
<h2>Q3: With the ongoing price war in the automotive industry, for NIO-SW, which is more important, profitability or sales volume?</h2>
<p>Starting from the second half of this year, we will be selling two brands simultaneously, and the main brand will not introduce models cheaper than the ET5 in the future.</p>
<p>In terms of price and volume, maintaining gross profit margin is a priority, and we will not engage in price wars to boost sales.</p>
<p>However, from the perspective of the second brand, it is indeed targeting the family market, and competition will undoubtedly be more intense, so the second brand will prioritize sales volume. In the early stages, profit margin will not be the focus, and sales volume will take precedence.</p>
<p>Overall, the two brands will have different strategies.</p>
<p>(Updating)</p>

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<p>The second brand is mainly responsible for volume sales, while the main brand is tasked with ensuring profit margins.</p>

NIO's conference call: This year's capital expenditure will be significantly lower than in 2023.