蔚來 NIO Inc.（NIO）2023年20-F年度報告「NYSE」.pdf

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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR(g)OF THE SECURITIES EXCHANGE ACTOF 1934 ORANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year

2、ended December 31,2023.ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 ORSHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF1934 Date of event requiring this shell company report.For the transition period from to .Commission

3、 file number:001-38638NIO Inc.(Exact Name of Registrant as Specified in Its Charter)N/A(Translation of Registrants Name into English)Cayman Islands(Jurisdiction of Incorporation or Organization)Building 19,No.1355,Caobao Road,Minhang DistrictShanghai,Peoples Republic of China(Address of Principal Ex

4、ecutive Offices)Wei Feng,Chief Financial OfficerBuilding 19,No.1355,Caobao Road,Minhang DistrictShanghai,Peoples Republic of ChinaTelephone:+8621-6908 2018Email:(Name,Telephone,Email and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to S

5、ection 12(b)of the Act:Title of Each Class Trading Symbol Name of Each Exchange on Which RegisteredAmerican depositary shares(each representing oneClass A ordinary share),par value US$0.00025 per shareNIONew York Stock ExchangeClass A ordinary shares,par value US$0.00025 pershare9866The Stock Exchan

6、ge of Hong Kong LimitedClass A ordinary shares,par value US$0.00025 pershareNIOThe Singapore Exchange Securities TradingLimitedSecurities registered or to be registered pursuant to Section 12(g)of the Act:None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15

7、(d)of the Act:NoneTable of Contents(Title of Class)Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period coveredby the annual report:As of December 31,2023,there were(i)1,932,063,749 Class A ordinary shares outstanding,par v

8、alue US$0.00025 per share,and(ii)148,500,000 Class C ordinary shares outstanding,par value US$0.00025 per share.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes NoIf this report is an annual or transition report,indicate by che

9、ck mark if the registrant is not required to file reports pursuant to Section 13or 15(d)of the Securities Exchange Act of 1934.Yes NoIndicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the prec

10、eding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submit

11、ted pursuantto Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrantwas required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated fi

12、ler,or an emerginggrowth company.See the definitions of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 ofthe Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerEmerging growth companyIf an emerging growth company that prepares its financ

13、ial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a)of the Exchange Act.The term“new or revised financial account

14、ing standard”refers to any update issued by the Financial Accounting Standards Board to itsAccounting Standards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness ofits internal contro

15、l over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered publicaccounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the re

16、gistrantincluded in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-basedcompensation received by any of the registrants executive off

17、icers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAPInternational Financial Reporting Standards as issued by theInternational Accounting Standar

18、ds BoardOtherIf“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registranthas elected to follow.Item 17 Item 18If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 o

19、f the ExchangeAct).Yes No(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d)ofthe Securities Exchange Act of 1934 subsequent to the

20、distribution of securities under a plan confirmed by a court.Yes NoTable of ContentsiTABLE OF CONTENTSINTRODUCTION1FORWARD-LOOKING INFORMATION3PART I.4ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS4ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE4ITEM 3.KEY INFORMATION4ITEM 4.INFORMATION

21、ON THE COMPANY75ITEM 4A.UNRESOLVED STAFF COMMENTS116ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS116ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES133ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS144ITEM 8.FINANCIAL INFORMATION147ITEM 9.THE OFFER AND LISTING148ITEM 10.ADDITIONAL INF

22、ORMATION149ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK167ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES168PART II.177ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES177ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OFPROCEEDS177I

23、TEM 15.CONTROLS AND PROCEDURES178ITEM 16.179ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT179ITEM 16B.CODE OF ETHICS179ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES179ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES179ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIAT

24、ED PURCHASERS180ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT180ITEM 16G.CORPORATE GOVERNANCE180ITEM 16H.MINE SAFETY DISCLOSURE180ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS180ITEM 16J.INSIDER TRADING POLICIES180ITEM 16K.CYBERSECURITY180PART III.181ITEM 17.FIN

25、ANCIAL STATEMENTS181ITEM 18.FINANCIAL STATEMENTS181ITEM 19.EXHIBITS182SIGNATURES185Table of Contents1INTRODUCTIONIn this annual report on Form 20-F,except where the context otherwise requires and for purposes of this annual report only:“ADAS”refers to advanced driver assistance system;“ADR”refers to

26、 the American depositary receipt that evidences the ADS;“ADSs”refer to our American depositary shares,each of which represents one Class A ordinary share;“AI”refers to artificial intelligence;“Anhui NIO AT”refers to Anhui NIO AI Technology Co.,Ltd.,one of the VIEs;“Anhui NIO DT”refers to Anhui NIO D

27、ata Technology Co.,Ltd.,one of the VIEs;“Beijing NIO”refers to Beijing NIO Network Technology Co.,Ltd.,one of the VIEs;“China”or the“PRC”refers to the Peoples Republic of China,excluding,for the purpose of this annual report only,HongKong,Macau and Taiwan;“Class A ordinary shares”refer to our Class

28、A ordinary shares,par value US$0.00025 per share;“Class B ordinary shares”refer to the Class B ordinary shares that we historically authorized and issued,par valueUS$0.00025 per share.All the authorized Class B ordinary shares were redesignated as Class A ordinary shares at theannual general meeting

29、 held on August 25,2022;“Class C ordinary shares”refer to our Class C ordinary shares,par value US$0.00025 per share;“EV”refers to electric passenger vehicle;“Hong Kong”or“HK”refers to the Hong Kong Special Administrative Region of the Peoples Republic of China;“Hong Kong Listing Rules”refer to the

30、Rules Governing the Listing of Securities on The Stock Exchange of Hong KongLimited,as amended or supplemented from time to time;“Hong Kong Stock Exchange”refers to The Stock Exchange of Hong Kong Limited;“ICE”refers to internal combustion engine;“Main Board of the Hong Kong Stock Exchange”refers to

31、 the stock market(excluding the option market)operated by theHong Kong Stock Exchange which is independent from and operated in parallel with the Growth Enterprise Market of theHong Kong Stock Exchange;“Main Board of the Singapore Exchange”refers to the stock market operated by The Singapore Exchang

32、e SecuritiesTrading Limited;“NEVs”refer to new energy passenger vehicles;Table of Contents2“NIO,”“we,”“us,”“our company,”and“our”refer to NIO Inc.,our Cayman Islands holding company and its subsidiaries,and,in the context of describing our operations and consolidated financial information,include th

33、e VIEs,namely BeijingNIO,Anhui NIO AT and Anhui NIO DT,and their respective subsidiaries,where applicable;“Ordinary shares”refer to our Class A ordinary shares and Class C ordinary shares,each of par value US$0.00025 pershare;“Relevant Period”refers to the period commencing from the date on which an

34、y of our shares first become secondary listedon the Hong Kong Stock Exchange to and including the date immediately before the day on which the secondary listing iswithdrawn from the Hong Kong Stock Exchange.As of the date of this annual report,we are in the Relevant Period;“RMB”or“Renminbi”refers to

35、 the legal currency of China;“Singapore Exchange”refers to The Singapore Exchange Securities Trading Limited;and“US$,”“dollars”or“U.S.dollars”refer to the legal currency of the United States.Unless otherwise noted,all translations from Renminbi to U.S.dollars and from U.S.dollars to Renminbi in this

36、 annual reportare made at a rate of RMB7.0999 to US$1.00,the exchange rate in effect as of December 29,2023 as set forth in the H.10 statisticalrelease of the Board of Governors of the Federal Reserve System.We make no representation that any Renminbi or U.S.dollar amountscould have been,or could be

37、,converted into U.S.dollars or Renminbi,as the case may be,at any particular rate,or at all.Unlessotherwise specified,the description of our vehicles,services and business models in this report refers to our business in China.Table of Contents3FORWARD-LOOKING INFORMATIONThis annual report contains f

38、orward-looking statements that reflect our current expectations and views of future events.Theseforward-looking statements are made under the“safe-harbor”provisions of the U.S.Private Securities Litigation Reform Act of 1995.Known and unknown risks,uncertainties and other factors,may cause our actua

39、l results,performance or achievements to be materiallydifferent from those expressed or implied by the forward-looking statements.These statements involve known and unknown risks,uncertainties and other factors,including those listed under“Item 3.Key InformationD.Risk Factors,”that may cause our act

40、ualresults,performance or achievements to be materially different from those expressed or implied by the forward-looking statements.You can identify these forward-looking statements by words or phrases such as“may,”“will,”“expect,”“anticipate,”“aim,”“estimate,”“intend,”“plan,”“believe,”“likely to,”“

41、potential,”“continue”or other similar expressions.We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affectour financial condition,results of operations,business strategy and financial needs.

42、These forward-looking statements include,but arenot limited to,statements about our goals and growth strategies,our future business development,financial condition and results ofoperations,our expectations regarding demand for and market acceptance of our products and services,and assumptions underl

43、ying orrelated to any of the foregoing.Although we believe that our expectations expressed in these forward-looking statements are reasonable,our expectations maylater be found to be incorrect.Our actual results could be materially different from our expectations.Moreover,we operate in an evolvingen

44、vironment.New risk factors and uncertainties emerge from time to time,and it is not possible for our management to predict all riskfactors and uncertainties,nor can we assess the impact of all factors on our business or the extent to which any factor,or combination offactors,may cause actual results

45、 to differ materially from those contained in any forward-looking statements.This annual report contains certain data and information that we obtained from various government and private publications.Statistical data in these publications also include projections based on a number of assumptions.The

46、 electric vehicles industry may notgrow at the rate projected by market data,or at all.Failure of this market to grow at the projected rate may have a material adverse effecton our business and the market price of our ADSs or Class A ordinary shares.In addition,the rapidly evolving nature of the ele

47、ctricvehicles industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future conditionof our market.Furthermore,if any one or more of the assumptions underlying the market data are later found to be incorrect,actualresults may differ from th

48、e projections based on these assumptions.You should not place undue reliance on these forward-lookingstatements.The forward-looking statements made in this annual report relate only to events or information as of the date on which thestatements are made in this annual report.Except as required by la

49、w,we undertake no obligation to update or revise publicly anyforward-looking statements,whether as a result of new information,future events or otherwise,after the date on which the statements aremade or to reflect the occurrence of unanticipated events.You should read this annual report and the doc

50、uments that we refer to in thisannual report and exhibits to this annual report completely and with the understanding that our actual future results may be materiallydifferent from what we expect.We qualify all of our forward-looking statements by these cautionary statements.Table of Contents4PART I

51、.ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.ITEM 3.KEY INFORMATIONOur Holding Company Structure and Contractual Arrangements with the VIEsNIO Inc.is not an operating company in China but a Cayman Islands hold

52、ing company with no equity ownership in itsconsolidated variable interest entities,or VIEs.We conduct our operations in China(i)primarily through our PRC subsidiaries,and(ii)toa much lesser extent,through the VIEs,namely Beijing NIO,Anhui NIO AT,and Anhui NIO DT,with each of which we maintaincontrac

53、tual arrangements,and their subsidiary.We have also established subsidiaries in the United States,Germany,the UnitedKingdom,Norway and other overseas jurisdictions to promote our services and businesses,entering into business contracts with offshorecounterparties and holding overseas intellectual pr

54、operties.PRC laws and regulations(i)restrict and impose conditions on foreign investment in value-added telecommunication services,including without limitation,performing internet information services as well as holding certain related licenses;and(ii)prohibit foreigninvestment in certain services r

55、elated to autonomous driving as well as the holding of licenses by foreign entities.Additionally,inpractice,subject to the qualifications set by China Banking and Insurance Regulatory Commission for foreign shareholders of theinsurance brokerage companies,the China Banking and Insurance Regulatory C

56、ommission typically would not approve theestablishment of foreign-invested insurance brokerage companies which perform insurance brokerage services and hold certain relatedlicenses.Accordingly,we operate these businesses in China through Beijing NIO,Anhui NIO AT,and Anhui NIO DT,or as referred to as

57、the VIEs,and their subsidiary.We rely on contractual arrangements among our PRC subsidiaries,the VIEs and their nomineeshareholders to maintain a controlling financial interest as the primary beneficiary of each VIE(as defined in U.S.GAAP,ASC 810).Under U.S.GAAP,we consolidate each VIE within our co

58、nsolidated financial statements.Specifically,we operate value-addedtelecommunication services,including without limitation,performing internet information services,and hold certain related licenses,through Beijing NIO.We rely on the contractual arrangements with Anhui NIO DT and its shareholders to

59、operate insurance brokerageservices.NIO Insurance Broker Co.,Ltd.,the subsidiary of Anhui NIO DT,currently holds an insurance brokerage license and providesinsurance brokerage services primarily related to vehicles and properties.We intend to obtain requisite licenses for certain supportingfunctions

60、 during the development of our assisted and intelligent driving technology through Anhui NIO AT.As of the date of this annualreport,the business operations of the VIEs are insignificant in relation to our total revenues and net loss.As used in this annual report,“NIO,”“we,”“us,”“our company,”and“our

61、”refer to NIO Inc.,our Cayman Islands holding company and its subsidiaries,and in thecontext of describing our operations and consolidated financial information,include the VIEs and their respective subsidiaries,whereapplicable.Table of Contents5The following diagram illustrates our corporate struct

62、ure,including our principal subsidiaries and the VIEs,as of the date of thisannual report:In April 2018,we entered into a series of contractual arrangements through one of our PRC subsidiaries with Beijing NIO andits shareholders,which were replaced by a new set of contractual arrangements we entere

63、d into with the same parties in April 2021.Further,in November 2022 and December 2022,we entered into a series of contractual arrangements through our respective PRCsubsidiaries with each of Anhui NIO AT and Anhui NIO DT,respectively,and their respective shareholders,to conduct certain futureoperati

64、ons in China.These contractual arrangements enable us to:receive the economic benefits that could potentially be significant to the VIEs in consideration for the services provided byour subsidiaries;exercise effective control over the VIEs;andTable of Contents6hold an exclusive option to purchase al

65、l or part of the equity interests in the VIEs when and to the extent permitted by PRClaw.These contractual agreements include an exclusive business cooperation agreement,exclusive option agreement,equity pledgeagreement,loan agreement and power of attorney.For more details of these contractual arran

66、gements,see“Item 4.Information on theCompanyC.Organizational StructureContractual Agreements with the VIEs and Their Shareholders.”Beijing NIO,Anhui NIO AT,and Anhui NIO DT and its subsidiary,taking into account all of their respective business with orwithout foreign investment restrictions and proh

67、ibitions under PRC laws,contributed insignificantly to our total revenues,accounting fornil,nil and RMB13.8 million(US$2.0 million)for the years ended December 31,2021,2022 and 2023,respectively.The VIEs providedservices internally to our subsidiaries,and such services amounted to RMB0.6 million,RMB

68、89.2 million and RMB110.5 million(US$15.6 million)for the years ended December 31,2021,2022 and 2023,respectively.As of December 31,2021,2022 and 2023,noneof Beijing NIO,Anhui NIO AT and Anhui NIO DT had significant operations or any material assets or liabilities.Holdings of our ADSs and Class A or

69、dinary shares are not holding equity interests in the VIEs in China but instead are holdingequity interests in a holding company incorporated in the Cayman Islands.We do not have any equity interests in the VIEs.However,asa result of contractual arrangements,we have a controlling financial interest

70、over and are considered the primary beneficiary of each ofthe VIEs,and we have consolidated the financial results,pursuant to U.S.GAAP,each of these entities in our consolidated financialstatements.However,the contractual arrangements may not be as effective as direct ownership in providing us with

71、control over theVIEs and we may incur substantial costs to enforce the terms of the arrangements.If the VIEs or the nominee shareholders fail toperform their respective obligations under the contractual arrangements,we could be limited in our ability to enforce the contractualarrangements that give

72、us effective control over the VIEs.Furthermore,if we are unable to maintain effective control,we would not beable to continue to consolidate the financial results of the VIEs in our financial statements.See“Item 3.Key InformationD.RiskFactorsRisks Related to Our Corporate StructureWe rely on contrac

73、tual arrangements with the VIEs and their shareholders to hold acontrolling financial interest over each VIE,which may not be as effective as direct ownership in providing operational control”and“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureThe shareholders of the VIEs

74、 have conflicts ofinterest with us,which may materially and adversely affect our business and financial condition.”There are also substantial uncertainties regarding the interpretation and application of current and future PRC laws,regulationsand rules regarding the status of the rights of our Cayma

75、n Islands holding company with respect to its contractual arrangements with theVIEs and their nominee shareholders.It is uncertain whether any new PRC laws or regulations relating to contractual arrangements willbe adopted or if adopted,what they would provide.If we or any of the VIEs is found to be

76、 in violation of any existing or future PRClaws or regulations,or fail to obtain or maintain any of the required permits or approvals,the PRC regulatory authorities would havebroad discretion to take action in dealing with such violations or failures.Our Cayman Islands holding company,our PRC subsid

77、iariesand the VIEs,and investors of our company face uncertainty about potential future actions by the PRC government that could affect theenforceability of the contractual arrangements with the VIEs and,consequently,significantly affect the financial performance of the VIEsand our company as a whol

78、e.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureIf the PRCgovernment deems that our VIE arrangements do not comply with PRC laws,or if these PRC laws change,we could be subject to severepenalties or be forced to relinquish our interests in those operations.”PRC gove

79、rnments significant authority in regulating our operations and its oversight and control over offerings conductedoverseas by,and foreign investment in,China-based issuers could significantly limit or completely hinder our ability to offer or continueto offer securities to investors.Implementation of

80、 industry-wide regulations in this nature may cause the value of such securities tosignificantly decline or become worthless.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to DoingBusiness in ChinaThe PRC governments significant oversight over our business operation could res

81、ult in a material adverse change inour operations and the value of our ADSs.”Risks and uncertainties regarding the interpretation and enforcement of laws and quickly evolving rules and regulations inChina,could result in a material adverse change in our operations and the value of our ADSs.For more

82、details,see“Item 3.KeyInformationD.Risk FactorsRisks Related to Doing Business in ChinaUncertainties in the interpretation and enforcement of PRClaws and regulations could limit the legal protections available to you and us.”Table of Contents7Permissions Required from the PRC Authorities for Our Ope

83、rationsOur operations in China are governed by PRC laws and regulations.As of the date of this annual report,our PRC subsidiariesand the VIEs have obtained the requisite licenses and permits from the PRC government authorities that are material for the mainbusiness operations of our holding company,

84、our PRC subsidiaries and the VIEs in China,including,among others,a license forconducting internet content provision services,or the ICP license,and the insurance brokerage license.In addition,we have completedthe filing process for our electric passenger vehicle investment project with the authorit

85、ies in Anhui province and have been included inthe Ministry of Industry and Information Technologys catalogue of approved manufacturers.Given the uncertainties of interpretationand implementation of laws and regulations and the enforcement practice by government authorities,we may be required to obt

86、ainadditional licenses,permits,filings or approvals for our business operations in the future.For more detailed information,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaWe may be adversely affected by the complexity,uncertainties and changes in PRC regulations on i

87、nternet-related business,automotive businesses and other business carried out by ourPRC subsidiaries and the VIEs.”Meanwhile,the PRC government has sought to exert more oversight and control over capital raising activities of listedcompanies that are conducted overseas and/or foreign investment in C

88、hina-based issuers.In December 2021,the CyberspaceAdministration of China,or the CAC,together with other authorities,jointly promulgated the Cybersecurity Review Measures,whichtook effect on February 15,2022 and replaces its predecessor regulation.Pursuant to the Cybersecurity Review Measures,critic

89、alinformation infrastructure operators that procure internet products and services and network platform operators that conduct data processactivities must be subject to the cybersecurity review if their activities affect or may affect national security.On February 17,2023,China Securities Regulatory

90、 Commission,or the CSRC,released several regulations regarding the filing requirements for overseasofferings and listings by domestic companies,including the Trial Administrative Measures of Overseas Securities Offering and Listingby Domestic Companies and five supporting guidelines,which were forma

91、lly implemented on March 31,2023.According to these rules,domestic enterprises like us that have completed overseas listings are not required to file with CSRC immediately,but shall carry outfiling procedures as required if we conduct refinancing or fall within other circumstances that require filin

92、g with the CSRC.Any failureto obtain or delay in obtaining such approval or completing such procedures could subject us to restrictions and penalties imposed by theCSRC,the CAC or other PRC regulatory authorities,which could include fines and penalties on our operations in China,delays of orrestrict

93、ions on the repatriation of the proceeds from our offshore offerings into China,or other actions that could materially and adverselyaffect our business,financial condition,results of operations,and prospects,as well as the trading price of our ADSs.For more detailedinformation,see“Item 3.Key Informa

94、tionD.Risk FactorsRisks Related to Doing Business in ChinaThe approval of or the filingwith the CSRC or other PRC government authorities may be required in connection with our future offshore listings and capital raisingactivities,and,if required,we cannot predict whether or for how long we will be

95、able to obtain such approval or filing.”Table of Contents8The Holding Foreign Companies Accountable ActPursuant to the Holding Foreign Companies Accountable Act,which was enacted on December 18,2020 and further amendedby the Consolidated Appropriations Act,2023,signed into law on December 29,2022,or

96、 the HFCAA,if the SEC determines that wehave filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public CompanyAccounting Oversight Board(United States),or the PCAOB,for two consecutive years,the SEC will prohibit our shares or ADSs fromb

97、eing traded on a national securities exchange or in the over-the-counter trading market in the United States.On December 16,2021,thePCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registeredpublic accounting firms headquarte

98、red in mainland China and Hong Kong,including our auditor.In May 2022,the SEC conclusivelylisted NIO Inc.as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscalyear ended December 31,2021.On December 15,2022,the PCAOB issued a report th

99、at vacated its December 16,2021 determinationand removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completelyregistered public accounting firms.For this reason,we were not identified as a Commission-Identified Issuer under the HFCAA afte

100、r wefiled our annual report on Form 20-F for the fiscal year ended December 31,2022 and do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F for the fiscal year ended December 31,2023.Each year,the PCAOB will determine whether

101、 it can inspect and investigate completely audit firms in mainland China and Hong Kong,amongother jurisdictions.If the PCAOB determines in the future that it no longer has full access to inspect and investigate completelyaccounting firms in mainland China and Hong Kong and we use an accounting firm

102、headquartered in one of these jurisdictions to issuean audit report on our financial statements filed with the SEC,we would be identified as a Commission-Identified Issuer following thefiling of the annual report on Form 20-F for the relevant fiscal year.There can be no assurance that we would not b

103、e identified as aCommission-Identified Issuer for any future fiscal year,and if we were so identified for two consecutive years,we would become subjectto the prohibition on trading under the HFCAA.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related toDoing Business in ChinaThe PCA

104、OB had historically been unable to inspect our auditor in relation to their audit work performed forour financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors withthe benefits of such inspections”and“Item 3.Key InformationD.Ri

105、sk FactorsRisks Related to Doing Business in ChinaOurADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect orinvestigate completely auditors located in China.The delisting or prohibition of trading of the ADSs,or the threat of their

106、being delistedor prohibited from trading,may materially and adversely affect the value of your investment.”Cash Flows through Our OrganizationNIO Inc.is a holding company with no material operations of its own.We conduct our operations in China(i)primarily throughour PRC subsidiaries,and(ii)to a muc

107、h lesser extent,the VIEs and their subsidiary.As a result,although other means are available forus to obtain financing at the holding company level,NIO Inc.s ability to pay dividends to the shareholders and to service any debt it mayincur may depend upon dividends paid by our PRC subsidiaries and se

108、rvice fees paid by the VIEs in China.If any of our subsidiariesincurs debt on its own behalf in the future,the instruments governing such debt may restrict its ability to pay dividends to NIO Inc.Inaddition,our PRC subsidiaries are permitted to pay dividends to NIO Inc.only out of their retained ear

109、nings,if any,as determined inaccordance with PRC accounting standards and regulations.Further,our PRC subsidiaries and the VIEs are required to makeappropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds,which are not distributable ascash dividends

110、 except in the event of a solvent liquidation of the companies.For more details,see“Item 5.Operating and FinancialReview and Prospects B.Liquidity and Capital Resources Holding Company Structure.”Under PRC laws and regulations,our PRC subsidiaries and the VIEs are subject to certain restrictions wit

111、h respect to payingdividends or otherwise transferring any of their net assets to us.Remittance of dividends by a wholly foreign-owned enterprise out ofChina is also subject to examination by the banks designated by the State Administration of Foreign Exchange of the PRC,or SAFE.Theamounts restricte

112、d include the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the net assets of the VIEs andtheir subsidiaries in which we have no legal ownership,totaling RMB38,902.1 million,RMB40,720.9 million and RMB42,256.2 million(US$5,951.7 million)as of December 31,2021,2022 and 2

113、023,respectively,and the net assets of the VIEs and their subsidiaries that arerestricted was nil,RMB50.0 million and RMB54.7 million(US$7.7 million)as of December 31,2021,2022 and 2023,respectively.Forrisks relating to the fund flows of our operations in China,see“Item 3.Key InformationD.Risk Facto

114、rsRisks Related to DoingBusiness in ChinaWe may rely on distributions by our PRC subsidiaries for our financing requirements,and any limitation on our PRCsubsidiaries to make payments to us could have a material and adverse effect on our business.”Table of Contents9For purposes of illustration,the f

115、ollowing discussion reflects the hypothetical taxes that might be required to be paid withinChina,assuming that:(i)we have taxable earnings,and(ii)we determine to pay dividends in the future.Tax calculation(1)Hypothetical pre-tax earnings 100%Tax on earnings at statutory rate of 25%(2)(25)%Net earni

116、ngs available for distribution 75%Withholding tax at standard rate of 10%(3)(7.5)%Net distribution to Parent/Shareholders 67.5%Notes:(1)For purposes of this example,the tax calculation has been simplified.The hypothetical book pre-tax earnings amount,notconsidering timing differences,is assumed to e

117、qual taxable income in China.(2)Certain of our subsidiaries qualifies for a 15%preferential income tax rate in China.For purposes of this hypothetical example,thetable above reflects a maximum tax scenario under which the full statutory rate would be effective.(3)The PRC Enterprise Income Tax Law im

118、poses a withholding income tax of 10%on dividends distributed by a foreign investedenterprise to its immediate holding company outside of China.A lower withholding income tax rate of 5%is applied if the foreigninvested enterprises immediate holding company is registered in Hong Kong or other jurisdi

119、ctions that have a tax treatyarrangement with China,subject to a qualification review at the time of the distribution.For purposes of this hypothetical example,the table above assumes a maximum tax scenario under which the full withholding tax would be applied.Under PRC law,NIO Inc.may provide fundi

120、ng to our PRC subsidiaries only through capital contributions or loans,and to theVIEs only through loans,subject to satisfaction of applicable government registration and approval requirements.NIO Inc.and itssubsidiaries extended loans to the nominee shareholders of the VIEs for their investment in

121、the VIEs,with outstanding principal amountof RMB0.1 million,RMB50.1 million and RMB50.1 million(US$7.1 million)as of December 31,2021,2022 and 2023,respectively.Inaddition,NIO Inc.and its subsidiaries also extended loans to the VIEs for operations with outstanding principal amount of RMB7.0million,R

122、MB32.8 million and RMB86.9 million(US$12.2 million)as of December 31,2021,2022 and 2023,respectively.Pursuant to the exclusive business cooperation agreements between NIO Co.,Ltd.,or Shanghai NIO,a wholly-ownedsubsidiary of our company,and Beijing NIO,Shanghai NIO may adjust the payment time and pay

123、ment method of the service fees,andBeijing NIO will accept any such adjustment.For the years ended December 31,2021,2022 and 2023,no service under the contractualarrangements was provided by Shanghai NIO and no service fee was paid by Beijing NIO to Shanghai NIO accordingly.We intend todetermine the

124、 amount of service fee and payment method based on the working capital needs of Shanghai NIO and Beijing NIO,andsettle such service fees accordingly in the future.Pursuant to a separate service agreement,for the years ended December 31,2021,2022and 2023,Shanghai NIO paid Beijing NIO RMB0.6 million,R

125、MB0.7 million and RMB0.7 million(US$0.1 million)for servicesprovided by Beijing NIO.Pursuant to the exclusive business cooperation agreement dated November 30,2022 between Anhui NIO Autonomous DrivingTechnology Co.,Ltd.,or Anhui NIO AD,a wholly-owned subsidiary of our company,and Anhui NIO AT,Anhui

126、NIO AD may adjust thepayment time and payment method of the service fees,and Anhui NIO AT will accept any such adjustment.For the years endedDecember 31,2022 and 2023,no service under the contractual arrangements was provided by Anhui NIO AD and no service fee waspaid by Anhui NIO AT to Anhui NIO AD

127、 accordingly.We intend to determine the amount of service fee and payment method based onthe working capital needs of Anhui NIO AD and Anhui NIO AT,and settle such service fees accordingly in the future.Pursuant to aseparate service agreement,for the years ended December 31,2021,2022 and 2023,Anhui

128、NIO AD paid Anhui NIO AT nil,RMB70.1million and RMB58.4 million(US$8.2 million)for services provided by Anhui NIO AT.Pursuant to the exclusive business cooperation agreement dated December 12,2022 between NIO Holding Co.,Ltd.,or NIOChina,a PRC subsidiary in which we hold 92.114%controlling equity in

129、terests,and Anhui NIO DT,NIO China may adjust the paymenttime and payment method of the service fees,and Anhui NIO DT will accept any such adjustment.For the years ended December 31,2022 and 2023,no service under the contractual arrangements was provided by NIO China and no service fee was paid by A

130、nhui NIODT to NIO China accordingly.We intend to determine the amount of service fee and payment method based on the working capital needsof NIO China and Anhui NIO DT,and settle such service fees accordingly in the future.Table of Contents10NIO Inc.has not declared or paid any cash dividends,nor do

131、es it have any present plan to pay any cash dividends on ourordinary shares in the foreseeable future.We currently intend to retain most,if not all,of our available funds and any future earnings tooperate and expand our business.See“Item 8.Financial Information A.Consolidated Statements and Other Fi

132、nancial Information Dividend Policy.”For Cayman Islands,PRC and United States federal income tax considerations of an investment in our ADSs orClass A ordinary shares,see“Item 10.Additional Information E.Taxation.”As of December 31,2021,2022 and 2023 and for the years ended December 31,2021,2022 and

133、 2023,none of Beijing NIO,Anhui NIO AT and Anhui NIO DT had significant operations or any material assets or liabilities.As a result,the financial informationrelated to the consolidated VIEs were insignificant to our consolidated financial statements.A.ReservedB.Capitalization and IndebtednessNot ap

134、plicable.C.Reasons for the Offer and Use of ProceedsNot applicable.D.Risk FactorsSummary of Risk FactorsAn investment in our ADSs and Class A ordinary shares involves significant risks.Below is a summary of material risks weface,organized under relevant headings.These risks are discussed more fully

135、in“Item 3.Key InformationD.Risk Factors.”Risks Related to Our Business and IndustryRisks and uncertainties related to our business and industry include,but are not limited to,the following:The automotive market is highly competitive,and we face significant challenges in competing in our industry;Our

136、 ability to develop and manufacture vehicles of sufficient quality and appeal to customers on schedule and on a largescale is still evolving;We have not been profitable,and only generated positive cash flows from operations in certain periods;We have limited experience in independent manufacturing.A

137、ny delays in the manufacturing and launching of our products,or ramping up of our production capacity,could have a material adverse effect on our business;Manufacturing in collaboration with partners is subject to risks;The unavailability,reduction or elimination of government and economic incentive

138、s or governmental policies which arefavorable for electric vehicles and domestically produced vehicles could have a material adverse effect on our business;Our current or future vehicles may not perform in line with customer expectations;We may face challenges providing our power solutions;Our produ

139、cts and services may not be generally accepted by our users.If we are unable to provide or arrange satisfactoryproducts or customer service for our users,our business and reputation may be materially and adversely affected;We are dependent on our suppliers,many of whom are our single source supplier

140、s for the components they supply;andTable of Contents11We rely on Battery Asset Company to provide Battery as a Service to our users.If Battery Asset Company fails to achievesmooth and stable operations,our Battery as a Service may be materially and adversely affected.Risks Related to Our Corporate

141、StructureWe are also subject to risks and uncertainties related to our corporate structure,including,but not limited to,the following:We are a Cayman Islands holding company with no equity ownership in the VIEs and we conduct our operations in China(i)primarily through our PRC subsidiaries,and(ii)to

142、 a much lesser extent,the VIEs with which we maintain contractualarrangements,and their subsidiary.Investors in our ADSs and Class A ordinary shares thus are not purchasing equityinterests in the VIEs in China but instead are purchasing equity interests in a Cayman Islands holding company.If the PRC

143、government deems that our VIE arrangements do not comply with PRC laws,or if these PRC laws change,we could besubject to severe penalties or be forced to relinquish our interests in those operations.Our holding company in the CaymanIslands,the VIEs and investors of our company face uncertainty about

144、 potential future actions by the PRC government thatcould affect the enforceability of the contractual arrangements with the VIEs and,consequently,significantly affect thefinancial performance of the VIEs and our company as a group;We rely on contractual arrangements with the VIEs and their sharehol

145、ders to hold a controlling financial interest over eachVIE,which may not be as effective as direct ownership in providing operational control;Our ability to enforce the equity pledge agreements between us and the VIEs shareholders may be subject to limitationsbased on PRC laws and regulations;andThe

146、 shareholders of the VIEs have conflicts of interest with us,which may materially and adversely affect our business andfinancial condition.Risks Related to Doing Business in ChinaWe face risks and uncertainties related to doing business in China in general,including,but not limited to,the following:

147、Changes in Chinas political or social conditions or government policies could have a material and adverse effect on ourbusiness and results of operations;Risks and uncertainties regarding the interpretation and enforcement of laws and quickly evolving rules and regulations inChina,could result in a

148、material adverse change in our operations and the value of our ADSs and Class A ordinary shares.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaUncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal prote

149、ctions availableto you and us”;The PRC governments significant authority in regulating our operations and its oversight and control over capital raisingactivities of listed companies conducted overseas by,and foreign investment in,China-based issuers could significantlylimit or completely hinder our

150、 ability to offer or continue to offer securities to investors.Implementation of industry-wideregulations in this nature may cause the value of such securities to significantly decline.For more details,see“Item 3.KeyInformation D.Risk Factors Risks Related to Doing Business in China The PRC governme

151、nts significantoversight over our business operation could result in a material adverse change in our operations and the value of ourADSs”;The approval of or the filing with the CSRC or other PRC government authorities may be required in connection with ourfuture offshore listings and capital raisin

152、g activities,and,if required,we cannot predict whether or for how long we will beable to obtain such approval or filing;We may be adversely affected by the complexity,uncertainties and changes in PRC regulations on internet-relatedbusiness,automotive businesses and other business carried out by our

153、PRC subsidiaries and the VIEs;Table of Contents12The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financialstatements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors withthe ben

154、efits of such inspections;andOur ADSs may be prohibited from being traded in the United States under the HFCAA in the future if the PCAOBdetermines that it is unable to inspect or investigate completely auditor located in China.The delisting or prohibition oftrading of the ADSs,or the threat of thei

155、r being delisted or prohibited from trading,may materially and adversely affect thevalue of your investment.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to DoingBusiness in ChinaOur ADSs may be prohibited from trading in the United States under the HFCAA in the future if th

156、ePCAOB is unable to inspect or investigate completely auditors located in China.The delisting or prohibition of trading ofthe ADSs,or the threat of their being delisted or prohibited from trading,may materially and adversely affect the value ofyour investment.”Risks Related to Our ADSs and Class A O

157、rdinary SharesIn addition to the risks described above,we are subject to risks related to our ADSs and Class A ordinary shares:We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong StockExchange;If we change the listing venue of our securiti

158、es,you may lose the shareholder protection mechanisms afforded under theregulatory regimes of the applicable securities exchange;The trading prices of our listed securities have been and are likely to continue to be,volatile,which could result insubstantial losses to investors;If securities or indus

159、try analysts do not publish research or reports about our business,or if they adversely change theirrecommendations regarding our Class A ordinary shares and/or ADSs,the market price for our Class A ordinary sharesand/or ADSs and trading volume could decline;andOur dual-class voting structure will l

160、imit the holders of our Class A ordinary shares and ADSs to influence corporatematters,provide certain shareholders of ours with substantial influence and could discourage others from pursuing anychange of control transactions that holders of our Class A ordinary shares and ADSs may view as benefici

161、al.Risks Related to Our Business and IndustryThe automotive market is highly competitive,and we face significant challenges in competing in our industry.The automotive market is highly competitive and we expect it will become more competitive in the future as additional playersenter into this market

162、.We compete with both NEV and ICE vehicles targeting the mid-to high-end segment.Many of our current andpotential competitors,particularly international competitors,have significantly greater financial,engineering,manufacturing,marketingand other resources than we do and may be able to devote greate

163、r resources to the design,development,manufacturing,promotion,saleand support of their products.Factors affecting competition include,among others,pricing,technological innovation,product design andperformance,product quality and safety,service and charging options,user experience,and manufacturing

164、efficiency.Increasedcompetition may lead to lower vehicle unit sales and increased inventory,which may result in downward price pressure and adverselyaffect our business,financial condition,operating results and prospects.Table of Contents13Moreover,we expect competition in the China automotive mark

165、et to intensify in the future in light of intense price competitionand phase-out of government subsidies.Increasing competition may lead to lower vehicle unit sales and increasing inventory,which mayresult in downward price pressure and may adversely affect our business,financial condition,results o

166、f operations,and prospects.Furthermore,our competitive advantage as the company with the first-to-market and leading EV volume-manufactured domestically inChina will be severely compromised if our competitors begin making deliveries earlier than expected,or offer more favorable pricingthan we do.We

167、may also be affected by the growth of the overall China automotive market.There have been fluctuations in the retailsales of the passenger vehicles in China in recent years.If the demand for automobiles in China decreases,our business,results ofoperations and financial condition could be materially

168、adversely affected.Our ability to successfully compete in our industry will befundamental to our future success in existing and new markets and our market share.There can be no assurance that we will be able tocompete successfully in our markets.If our competitors introduce new vehicles or services

169、that successfully compete with or surpass thequality or performance of our vehicles or services at more competitive prices,we may be unable to satisfy existing customers or attractnew customers at the price levels that would allow us to generate attractive rates of return on our investment.You shoul

170、d consider our business and prospects in light of the risks and challenges we face in our industry,including,among otherthings,with respect to our ability to:design and produce safe,reliable and quality vehicles on an ongoing basis;build a well-recognized and respected brand;establish and expand our

171、 customer base;successfully market our vehicles and services;competitively price our products and services,and successfully anticipate the sales volume of our vehicle products and thetake-rate of services provided to users;improve and maintain our operational efficiency;maintain a reliable,secure,hi

172、gh-performance and scalable technology infrastructure;successfully develop and protect our core technologies;attract,retain and motivate talented employees;anticipate and adapt to changing market conditions,including technological developments and changes in competitivelandscape;andnavigate an evolv

173、ing and complex regulatory environment.If we fail to address any or all of these risks and challenges,our business may be materially and adversely affected.Furthermore,our vehicles are highly technical products that will require maintenance and support.If we were to cease or cutback operations,even

174、years from now,buyers of our vehicles from years earlier might encounter difficulties in maintaining their vehiclesand obtaining satisfactory support.We also believe that our service offerings,including user confidence in our ability to provide ourpower solutions and honor our obligations under our

175、service package,will be key factors in marketing our vehicles.As a result,consumers will be less likely to purchase our vehicles now if they are not convinced that our business will succeed or that our operationswill continue for many years.Similarly,suppliers and other third parties will be less li

176、kely to invest time and resources in developingbusiness relationships with us if they are not convinced that our business will succeed.Our ability to develop and manufacture vehicles of sufficient quality and appeal to customers on schedule and on a large scale is stillevolving.Our future business d

177、epends in large part on our ability to execute on our plans to develop,manufacture,market and sell ourelectric vehicles.We plan to manufacture our vehicles in higher volumes than our present production capabilities.Table of Contents14Our continued development and manufacturing of our current and fut

178、ure vehicle models are and will be subject to risks,including with respect to:our ability to secure necessary funding;the equipment we use being able to accurately manufacture the vehicle within specified design tolerances;compliance with environmental,workplace safety and similar regulations;securi

179、ng necessary components on acceptable terms and in a timely manner;delays in delivery of final component designs to our suppliers,or delays in the development and delivery of our coretechnologies and new vehicle models,such as our NIO Assisted and Intelligent Driving,or NAD,and technologies forbatte

180、ries;our ability to attract,recruit,hire and train skilled employees;quality controls;delays or disruptions in our supply chain;our ability to maintain solid partnership with our suppliers;andother delays in manufacturing and production capacity expansion,and cost overruns.Currently,our product port

181、folio consists of the ES8,a six-seater smart electric flagship SUV,the ES7(or the EL7),a mid-largefive-seater smart electric SUV,the ES6(or the EL6),a five-seater all-round smart electric SUV,the EC7,a five-seater smart electricflagship coupe SUV,the EC6,a five-seater smart electric coupe SUV,the ET

182、9,a smart electric executive flagship,the ET7,a smartelectric flagship sedan,the ET5,a mid-size smart electric sedan,and the ET5T,a smart electric tourer.Our vehicles may not meetcustomer expectations and our future models may not be commercially viable.Historically,automobile customers have expecte

183、d autocompanies to periodically introduce new and improved vehicle models.In order to meet these expectations,we may be required tointroduce new vehicle models and enhanced versions of existing vehicle models.To date,we have limited experience designing,testing,manufacturing,marketing and selling ou

184、r electric vehicles and therefore cannot assure you that we will be able to meet customerexpectations.Any of the foregoing could have a material adverse effect on our results of operations and growth prospects.We have not been profitable,and only generated positive cash flows from operations in cert

185、ain periods.We have not been profitable since our inception,and only generated positive cash flows from operations in certain periods.Weincurred net losses of RMB4,016.9 million,RMB14,437.1 million and RMB20,719.8 million(US$2,918.3 million)for the years endedDecember 31,2021,2022 and 2023,respectiv

186、ely.In addition,although we generated positive operating cash flows in 2021,we hadnegative operating cash flows of RMB3,866.0 million and RMB1,381.5 million(US$194.6 million)in 2022 and 2023,respectively.There can be no assurance that we will not experience liquidity problems in the future.We may no

187、t be able to fulfill ourobligations in providing vehicles,embedded products or services to our users in respect of advances from customers,the failure of whichmay negatively affect our cash flow position.If we fail to generate sufficient revenue from our operations,or if we fail to maintainsufficien

188、t cash and financing,we may not have sufficient cash flows to fund our business,operations and capital expenditure and ourbusiness and financial position will be adversely affected.Table of Contents15We have made significant up-front investments in research and development,power network,service netw

189、ork,and sales andmarketing to rapidly develop and expand our business.We expect to continue to invest significantly in research and development,salesand service network,and in production capacity expansion,to further develop and expand our business,and these investments may notresult in an increase

190、in revenue or positive cash flow on a timely basis,or at all.For example,we are working on the development ofelectric vehicles targeting the mass market,assisted and intelligent driving technologies,other core technologies,and smart devices.Wecannot assure you that we will be able to compete success

191、fully against existing or future competitors in those new areas.Additionally,theelectric vehicle industry is witnessing a trend where numerous market players are resorting to aggressive pricing strategies to carve out alarger market share.Maintaining our current margins could become increasingly cha

192、llenging amidst this price-cutting competition.Adjusting our pricing may become essential to remain competitive,while this could lead to a direct contraction of our margin levels,andadversely affect our financial condition and results of operations.We may continue to record net losses and negative o

193、perating cash flows in the near future.We may not generate sufficientrevenues,or we may incur substantial losses for a number of reasons,including lack of demand for our vehicles and services,increasingcompetition,challenging macro-economic environment,as well as other risks discussed herein,and we

194、may incur unforeseen expenses,or encounter difficulties,complications and delays in generating revenue or achieving profitability.If we are unable to achieveprofitability,we may have to reduce the scale of our operations,which may impact our business growth and adversely affect our financialconditio

195、n and results of operations.In addition,our continuous operation depends on our capability to improve operating cash flows aswell as our capacity to obtain sufficient external equity or debt financing.If we do not succeed in doing so,we may have to limit thescale of our operations,which may limit ou

196、r business growth and adversely affect our financial condition and results of operations.We have limited experience in independent manufacturing.Any delays in the manufacturing and launching of our products,orramping up of our production capacity,could have a material adverse effect on our business.

197、Auto companies often experience delays in the design,manufacture and commercial release of new vehicle models.We hadbeen,and will continue to target a broader market with our future vehicles,and to the extent we need to delay the launch of our vehicles,our growth prospects could be adversely affecte

198、d as we may fail to grow our market share.We also plan to periodically perform faceliftsor refresh existing models,which could also be subject to delays.We may introduce in the future new or unique manufacturing processesand design features for our products.As we expand our vehicle offerings and glo

199、bal footprint,there is no guarantee that we will be ableto successfully and timely introduce and scale such processes or features.Furthermore,we rely on third-party suppliers for the provisionand development of many of the key components and materials used in our vehicles.To the extent our suppliers

200、 experience any delays inproviding us with or developing necessary components,we could experience delays in delivering on our timelines.In addition,our manufacturing model has transitioned from joint manufacturing to independent manufacturing,potentiallyintroducing new risks.Such a shift poses addit

201、ional challenges due to our limited experience in manufacturing independently.Theintricacies of overseeing all aspects of production independently,such as managing the entire production line and supervising productionpersonnel,may lead to unforeseen obstacles in maintaining efficiency and timeliness

202、,and,ultimately,delays in product launch anddelivery.Therefore,we may be required to invest in more time and resources to assure that vehicles manufactured at our own facilitiescomply with our quality standards and regulatory requirements.We have limited experience in managing our manufacturing work

203、force,and we may also face challenges in providing training to our production personnel.Additionally,we cannot assure you that we will beable to attract or retain qualified personnel or other highly skilled employees in a timely and cost-efficient manner.Any failure toeffectively manage or provide a

204、dequate training to our manufacturing workforce and production personnel,as well as attract or retainqualified personnel,may result in delays in production,reduced efficiency,and potential quality issues.Furthermore,we may need to expand or convert our existing manufacturing facilities in the future

205、 to ramp up the production ofour current and future vehicle models.The expansion or conversion of our manufacturing facilities could experience delays or otherdifficulties,potentially affecting the timeline for increasing production capacity.Moreover,as we increase our production capacity andimprove

206、 our operation efficiency,significant capital may also be required to maintain our property,plant and equipment,and such costsmay exceed our current anticipations.There is substantial uncertainty about our ability to achieve these objectives.We cannot assure youthat we will be able to complete the e

207、xpansion or conversion of our manufacturing bases or ramp up our production capacity on scheduleand within budget.Any delay in production ramp-up of our current vehicle models,or in the development,manufacture,launch and productionramp-up of our future vehicle models,including in the build-out of th

208、e manufacturing facilities in China for these models or due to anyother factors,or in refreshing or performing facelifts to existing models,could subject us to customer complaints and materially andadversely affect our reputation,demand for our vehicles,results of operations and growth prospects.Tab

209、le of Contents16Manufacturing in collaboration with partners is subject to risks.In the past,we partnered with Anhui Jianghuai Automobile Group Co.,Ltd.(formerly known as Anhui Jianghuai AutomobileCo.,Ltd.),or JAC,a major state-owned automobile manufacturer in China,for the joint manufacturing of ou

210、r vehicles in the firstadvanced manufacturing base,or the F1 Plant,and the second advanced manufacturing base,or the F2 Plant.Under our previous jointmanufacturing arrangement,we and JAC jointly manufactured a series of our vehicle models in the F1 Plant and the F2 Plant.We werein charge of vehicle

211、development and engineering,trademarks and technology licensing,supply chain management,manufacturingtechniques and quality management and assurance.Jianglai Advanced Manufacturing Technology(Anhui)Co.,Ltd.,or Jianglai,a jointventure for operation management established by JAC and us,was responsible

212、 for parts assembly and operation management.We entered into definitive agreements with JAC in December 2023,pursuant to which we agreed to acquire the manufacturingequipment and assets of the F1 Plant and the F2 Plant from JAC for a total consideration of approximately RMB3.16 billion,excludingtax.

213、The asset transfer was completed in December 2023.In addition,we have completed the filing process for our electric passengervehicle investment project with the authorities in Anhui province and have been included in the Ministry of Industry and InformationTechnologys catalogue of approved manufactu

214、rers.Our manufacturing model has transitioned from joint manufacturing to independentmanufacturing.We have commenced independent manufacturing of all our current vehicles models in the F1 Plant and the F2 Plant.Wehave also entered into a manufacturing technical services agreement with Jianglai,pursu

215、ant to which Jianglai provides certain technicalsupport and services to us in support of our independent manufacturing,including logistics and planning,production quality control,andtechnical training and skills enhancement for our production personnel.We were subject to operational risks under our

216、previous joint manufacturing arrangement.Although we have transitioned toindependent manufacturing,we expect Jianglai to provide technical support and services to us in support of our independentmanufacturing.We may have limited ability to control the actions of Jianglai and its performance under th

217、e manufacturing technicalservices agreement.In addition,to the extent JAC or Jianglai are subject to negative publicity or harm to their reputation relating to theirbusiness,we may also suffer negative publicity or harm to our reputation by virtue of our association with them.Any of the foregoingcou

218、ld adversely affect our business,financial condition and results of operations.The unavailability,reduction or elimination of government and economic incentives or governmental policies which are favorable forelectric vehicles and domestically produced vehicles could have a material adverse effect o

219、n our business.Our growth has benefited significantly from the government subsidies,economic incentives and government policies thatsupport the growth of new energy vehicles.Favorable government incentives and subsidies in China include one-time governmentsubsidies,exemption from vehicle purchase ta

220、x,exemption from license plate restrictions in certain cities,preferential utility rates forcharging facilities and more.Changes in government subsidies,economic incentives and government policies to support NEVs couldadversely affect the results of our operations.Chinas central government provided

221、subsidies for purchases of certain NEVs until 2022 and reviews and further adjusts thesubsidy standard on an annual basis.We have seen a general decrease in the amount of government subsidies available to purchase ofNEVs in recent years.For example,the 2020 subsidy standard,effective from April 23,2

222、020,reduces the base subsidy amount in generalby 10%for each NEV,and sets subsidies for around two million vehicles as the upper limit of annual subsidy scale.The 2022 subsidystandard was further reduced by 30%compared to the standard of 2021.In addition,the subsidy policy for the purchase of NEVs i

223、n 2022was terminated on December 31,2022,and that subsidy will no longer be granted to vehicles where car licenses are issued afterDecember 31,2022.We believe that our sales performance in 2021,2022 and 2023 was negatively affected by the reduction in thesubsidy standard to some extent.In addition,l

224、ocal governments in China have been implementing incentives and subsidy policies forconsumers,such as NEV replacement subsidies.If these favorable government incentives and subsidies are scaled back in the future,itcould potentially reduce consumers willingness to purchase NEVs,thereby negatively im

225、pacting our vehicle sales.Table of Contents17Our vehicle sales may also be impacted by government policies such as tariffs on imported vehicles and foreign investmentrestrictions in the industry.The tariff in China on imported passenger vehicles(other than those originating in the United States ofAm

226、erica)was reduced to 15%starting from July 1,2018.As a result,pricing advantage of domestically manufactured vehicles could bediminished.There used to be a certain limitation on foreign ownership of automakers in China,but for automakers of NEVs,such limitwas lifted in 2018.Further,pursuant to the S

227、pecial Administrative Measures(Negative List)for Foreign Investment Access(2021Version),or 2021 Negative List,most recently jointly promulgated by the Ministry of Commerce of the PRC and the NationalDevelopment and Reform Commission of the PRC,or the NDRC,on December 27,2021 and took effect on Janua

228、ry 1,2022,the limit onforeign ownership of automakers for ICE passenger vehicles was also lifted.As a result,foreign NEV competitors could build wholly-owned facilities in China without the need for a domestic joint venture partner.These changes could affect the competitive landscape ofthe NEV indus

229、try and reduce our pricing advantage,which may adversely affect our business,results of operations and financialcondition.Apart from vehicle purchase subsidies,Chinas central government has adopted an NEV credit scheme that incentivizes OEMsto increase the production and sale of NEVs.On June 29,2023

230、,the Ministry of Industry and Information Technology of the PRC,theMinistry of Finance,the Ministry of Commerce,the General Administration of Customs of the PRC,and the State Administration forMarket Regulation,jointly promulgated the Decision on Amending Measures for the Parallel Administration of

231、the Average FuelConsumption and New Energy Vehicle Credits of Passenger Vehicle Enterprises,which took effect on August 1,2023.Under thesemeasures,each of the vehicle manufacturers and vehicle importers above a certain scale is required to,among other things,maintain itsnew energy vehicles credits,o

232、r the NEV credits,and corporate average fuel consumption credits,above zero,regardless of whetherNEVs or ICE vehicles are manufactured or imported by it,and NEV credits can be earned only by manufacturing or importing NEVs.Therefore,NEV manufacturers will enjoy preferences in obtaining and calculati

233、ng NEV credits.Additionally,the Ministry of Industryand Information Technology will establish an NEV credits pool for passenger vehicle enterprises to store or withdraw positive NEVcredits,and decide whether to open such pool before July 30 each year based on the average fuel consumption of passenge

234、r vehicleenterprises across the country and the supply and demand of NEV credits.The positive NEV credits stored in the credit pool do not havea carryover ratio requirement and are valid for five years.Furthermore,NEV credits are equal to the aggregate actual scores of a vehiclemanufacturer or a veh

235、icle importer minus its aggregate targeted scores.The actual scores shall be calculated by multiplying the score ofeach new energy vehicle model,which depends on various metrics such as the driving range,battery energy efficiency and the ratedpower of fuel cell systems,and is calculated based on for

236、mula published by the Ministry of Industry and Information Technology(in thecase of a battery electric vehicle,the NEV credit of each vehicle is calculated by multiplying 0.0034 by the vehicles mileage,adding 0.2to the result,and then multiplying the total by the mileage adjustment coefficient,batte

237、ry energy density adjustment coefficient,andelectricity consumption coefficient),by the respective production or import volume,while the targeted scores shall be calculated bymultiplying the annual production or import volume of traditional ICEs of a vehicle manufacturer or importer by the NEV credi

238、t ratio setby the Ministry of Industry and Information Technology.The NEV credit ratios are 14%,16%and 18%for the years of 2021,2022 and2023.Excess positive NEV credits,or the automotive regulatory credits,are tradable and may be sold to other enterprises through acredit trading scheme established b

239、y the Ministry of Industry and Information Technology while excess positive corporate average fuelconsumption credits can only be carried forward or transferred among related parties.Negative NEV credits can be offset by purchasingautomotive regulatory credits from other manufacturers or importers.W

240、e have earned positive NEV credits through manufacturing newenergy vehicles and sold some of our automotive regulatory credits to other vehicle manufacturers or importers.We generated revenuefrom the sale of automotive regulatory credits totaled RMB516.5 million,RMB67.3 million and RMB10.6 million(U

241、S$1.5 million)in2021,2022 and 2023,respectively.The credits earned are calculated based on the formula published by the Ministry of Industry andInformation Technology,which is dependent on various metrics such as vehicle mileage and battery energy efficiency.There is noguarantee that we will continu

242、e to earn a similar level or amount of credits going forward.Moreover,as the prices for automotiveregulatory credits are subject to market demand,which affects the amount of regulatory credits generated by other vehicle manufacturersduring a given period,we cannot assure you that we will continue to

243、 sell our automotive regulatory credits at the current price or a higherprice.Any changes in government policies to restrict or eliminate such automotive regulatory credits trading could adversely affect ourbusiness,financial condition and results of operations.On June 19,2023,the Ministry of Indust

244、ry and Information Technology,the Ministry of Finance and the State TaxationAdministration jointly promulgated the Announcement on Continuing and Optimizing the Vehicle Purchase Tax Reduction andExemption Policies for New Energy Vehicles.Pursuant to such announcement,the NEVs purchased during the pe

245、riod from January 1,2024 to December 31,2025,shall be exempt from vehicle purchase tax,with the amount of tax exemption for each new energypassenger vehicle not exceeding RMB30,000,and the vehicle purchase tax on the NEVs purchased during the period from January 1,2026 to December 31,2027,shall be r

246、educed by half,with the amount of tax reduction for each new energy passenger vehicle notexceeding RMB15,000.Table of Contents18Such negative influence and our undermined sales performance resulted therefrom could continue.Furthermore,Chinas centralgovernment provides certain local governments with

247、funds and subsidies to support the roll-out of charging infrastructure.See“Item 4.Information on the CompanyB.Business OverviewRegulationsFavorable Government Policies Relating to New Energy Vehiclesin the PRC.”These policies are subject to change and beyond our control.We cannot assure you that any

248、 changes would be favorable toour business.Furthermore,any reduction,elimination,delayed payment or discriminatory application of government subsidies andeconomic incentives because of policy changes,the reduced need for such subsidies and incentives due to the perceived success ofelectric vehicles,

249、fiscal tightening or other factors may result in the diminished competitiveness of the alternative fuel vehicle industrygenerally or our electric vehicles in particular.In addition,as we seek to increase our revenues from vehicle sales,we may alsoexperience an increase in accounts receivable relatin

250、g to government subsidies.However,the collection of the government subsidies issubject to the appropriation arrangement and cadence of the governmental authority.Any uncertainty or delay in collection of thegovernment subsidies may also have an adverse impact on our financial condition.For more deta

251、ils,please refer to“10.Other Non-current Assets”set forth in our consolidated financial statements included elsewhere in this annual report.Any of the foregoing couldmaterially and adversely affect our business,results of operations,financial condition and prospects.Our current or future vehicles ma

252、y not perform in line with customer expectations.Our current or future vehicles may not perform in line with customers expectations.For example,our vehicles may not havethe durability or longevity of other vehicles in the market,and may not be as easy and convenient to repair as other vehicles in th

253、emarket.Any product defects or any other failure of our vehicles to perform as expected could harm our reputation and result in adversepublicity,lost revenue,delivery delays,product recalls,product liability claims,harm to our brand and reputation,and significantwarranty and other expenses,and could

254、 have a material adverse impact on our business,financial condition,operating results andprospects.In addition,the range of our vehicles on a single charge declines principally as a function of usage,time and charging patternsas well as other factors.For example,a customers use of his or her electri

255、c vehicle as well as the frequency with which he or she chargesthe battery can result in additional deterioration of the batterys ability to hold a charge.Furthermore,our vehicles may contain defects in design and manufacture that may cause them not to perform as expected orthat may require repair.W

256、e have delivered vehicles based on NIO Technology 2.0,or NT2.0,with certain features of the NAD,and planto gradually turn on more features of the NAD.We cannot assure you that the NAD will ultimately perform in line with expectations.Our vehicles use a substantial amount of software code to operate

257、and software products are inherently complex and often containdefects and errors when first introduced.While we have performed extensive internal testing on our vehicles software and hardware systems,we have a limited frame ofreference by which to evaluate the long-term performance of our systems an

258、d vehicles.There can be no assurance that we will be able todetect and fix any defects in the vehicles prior to their sale to consumers.If any of our vehicles fail to perform as expected,we may needto delay deliveries,initiate product recalls and provide servicing or updates under warranty at our ex

259、pense,which could adversely affectour brand in our target markets and could adversely affect our business,prospects and results of operations.We may face challenges providing our power solutions.We provide our users with comprehensive power solutions.Our power solutions include home charger,which we

260、 refer to asPower Home;battery swapping,which we refer to as Power Swap;supercharging piles,which we refer to as Power Charger;destinationcharging piles,which we refer to as Destination Charger;and mobile charging,which we refer to as Power Mobile.In addition,we offerour users our One Click for Powe

261、r valet service where we pick up,charge and then return the vehicle.For each of our vehicle models,wecurrently offer two battery options:(i)the 75 kWh battery,or the Standard Range Battery and(ii)the 100 kWh battery,or the LongRange Battery.We expect to deliver the 150 kWh battery,or the Ultra-long

262、Range Battery,with the next generation battery technology inthe near future.We have experienced delays in delivering our power solutions in the past,and we cannot assure you that such delays willnot occur again in the future.Table of Contents19We have very limited experience in the actual provision

263、of our power solutions to users and providing these services is subjectto challenges,including the challenges associated with sorting out the logistics of rolling out our network and teams in appropriate areas,inadequate capacity or over capacity of our services in certain areas,security risks or ri

264、sk of damage to vehicles during One Click forPower valet services and the potential for lack of user acceptance of our services.In addition,although the Chinese government hassupported the roll-out of a public charging network,the current number of charging infrastructures is generally considered to

265、 beinsufficient.We also face uncertainties with regard to governmental support and public infrastructure as we roll out our power solutions,including whether we can obtain and maintain access to sufficient charging infrastructure,whether we can obtain any required permitsand land use rights and comp

266、lete any required filings,and whether the government support in this area may discontinue.Furthermore,wemay be subject to illegal activities perpetrated against us and our power solutions,which may disrupt our operations and damage userconfidence in our vehicles and service offerings,thereby negativ

267、ely affect our business and results of operations.Furthermore,given our limited experience in providing power solutions,there could be unanticipated challenges which mayhinder our ability to provide our solutions or make the provision of our solutions costlier than anticipated.To the extent we are u

268、nable tomeet user expectations or experience difficulties in providing our power solutions,our reputation and business may be materially andadversely affected.Our products and services may not be generally accepted by our users.If we are unable to provide or arrange satisfactory products orcustomer

269、service for our users,our business and reputation may be materially and adversely affected.We aim to provide users with satisfactory products and a good customer service experience,including by providing our userswith access to a full suite of services conveniently through our mobile application and

270、 vehicle applications.In addition,we seek toengage with our users on an ongoing basis using online and offline channels,in ways which are non-traditional for automakers.We arealso expanding our service scope to meet our users evolving demands.For example,in January 2021,we launched NIO Certified,our

271、official used car business.We have established a nationwide used vehicle business network,covering services including vehicleinspection,evaluation,acquisition and sales.We also partner with various used car dealers through our NIO app to assist users incompleting their used car transactions more eff

272、iciently and conveniently.In addition,we have also started to offer auto financingarrangements to our users directly through our subsidiary,NIO Financial Leasing Co.,Ltd.,in late 2020.New service offerings willsubject us to unknown risks.In addition,we may from time to time roll out new vehicle mode

273、ls and upgraded versions of existingvehicle models to meet the evolving expectations and demands of our users.However,we cannot assure you that our products andservices,including new vehicle models or upgraded versions of existing vehicle models,our service package and energy package,ourpower soluti

274、on services,our used car service,our auto financing services or our efforts to engage with our users using both our onlineand offline channels,will be successful,which could impact our revenues as well as our customer satisfaction and marketing.Our servicing will partially be carried out through thi

275、rd parties which we certified.Although such servicing partners may haveexperience in servicing other vehicles,we and such partners have very limited experience in servicing our vehicles.Servicing electricvehicles is different from servicing ICE vehicles and requires specialized skills,including high

276、 voltage training and servicing techniques.There can be no assurance that our service arrangements will adequately address the service requirements of our users to theirsatisfaction,or that we and our partners will have sufficient resources to meet these service requirements in a timely manner as th

277、evolume of vehicles we deliver increases.In addition,if we are unable to roll out and establish a widespread service network,user satisfaction could be adversely affected,which in turn could materially and adversely affect our sales,results of operations and prospects.We are dependent on our supplie

278、rs,many of whom are our single source suppliers for the components they supply.Each of our vehicle models uses a great amount of purchased parts from suppliers,many of whom are currently our singlesource suppliers for these components,and we expect that this will be similar for any future vehicle we

279、 may produce.The supply chainexposes us to multiple potential sources of delivery failure or component shortages.While we obtain components from multiple sourceswhenever possible,similar to other players in our industry,many of the components used in our vehicles are components we purchasedfrom a si

280、ngle source.To date,we have not qualified alternative sources for most of the single sourced components used in our vehiclesand we do not maintain long-term agreements with some of our single source suppliers.In addition,part of our supply chain isgeographically concentrated.The lack of geographic d

281、iversification in our suppliers could lead to increased costs and delays inproduction of our vehicles.Table of Contents20Qualifying alternative suppliers or developing our own replacements for certain highly customized components of our vehicles,may be time-consuming and costly.Any disruption in the

282、 supply of components,whether or not from a single source supplier,couldtemporarily disrupt the production of our vehicles until an alternative supplier is fully qualified or is otherwise able to supply us with therequired material.There can be no assurance that we would be able to successfully reta

283、in alternative suppliers or supplies on a timelybasis,on acceptable terms or at all.Furthermore,our collaboration with startup suppliers poses a potential risk to our operations.Thesesuppliers may lack the experience and resources to effectively manage their supply chains,leading to potential disrup

284、tions in the deliveryof goods or services to us.In addition,operational inefficiencies within these suppliers may lead to inconsistencies in product or servicequality,thereby affecting our own ability to deliver high-quality products or services to our customers.Some of these suppliers may havelimit

285、ed financial resources and rely on external financing to sustain their operations.If they experience financial constraints or fail tosustain their operations,it could impact their ability to meet our requirements,potentially causing delays or disruptions in our operations.Changes in business conditi

286、ons,force majeure and other factors beyond our control or which we do not presently anticipate,could also affect our suppliers ability to deliver components to us on a timely basis.For example,the global supply constraint ofsemiconductor chips had negatively impacted our production activity and volu

287、me,as a result of which,we temporarily suspended thevehicle production activity in the F1 Plant for five working days starting from March 29,2021.In May 2021,our vehicle delivery wasadversely impacted for several days due to the volatility of semiconductor supply and certain logistical adjustments.I

288、n April 2022,wesuspended our vehicle production as a result of the component shortages.In July 2022,the production of our ET7 and EC6 wasconstrained by the short supply of casting parts.Although the reduced production volume and number of vehicles delivered as a result ofsupply chain volatilities ha

289、ve not had a material impact on our liquidity and capital resources,our results of operations in these periodshave been negatively affected.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryOurbusiness,financial condition and results of operations may be adversely aff

290、ected by natural disasters,health epidemics and otheroutbreaks.”While we have been working closely with supply chain partners and have been actively seeking alternative sources of supply,our production activity and results of operations may be impacted should the supply chain volatilities continue.I

291、n addition,even if wesucceed in locating alternative sources of supply,cooperating with new suppliers will subject us to uncertainties with respect to thereliability of these suppliers and the quality of the components they provide.We cannot assure you that the new sources of componentsupply will en

292、able us to meet the quality,price,design,engineering,and production standards,as well as the production volumes tosatisfy the market demand for our vehicles.Any defects of or quality issues with these components or any non-compliance incidentsassociated with these third-party suppliers could result

293、in quality issues with our vehicles and hence compromise our brand image andresults of operations.Any of the foregoing could materially and adversely affect our results of operations,financial condition andprospects.We rely on Battery Asset Company to provide Battery as a Service to our users.If Bat

294、tery Asset Company fails to achieve smooth andstable operations,our Battery as a Service may be materially and adversely affected.On August 20,2020,we introduced the Battery as a Service,or BaaS,which allows users to purchase electric vehicles andsubscribe for the usage of batteries separately.If us

295、ers opt to purchase a vehicle and subscribe for the battery under the BaaS,they canenjoy a deduction off the original vehicle purchase price and pay a monthly subscription fee for the battery.For each user under the BaaS model,we sell a battery to Wuhan Weineng Battery Asset Co.,Ltd.,or the Battery

296、AssetCompany,and the user subscribes for the usage of the battery from the Battery Asset Company.The service we provide to our usersunder the BaaS relies,in part,on the smooth operation of and stability and quality of service delivered by the Battery Asset Company,which we cannot guarantee.We invest

297、ed in the Battery Asset Company with CATL,Hubei Science Technology Investment Group Co.,Ltd.and a subsidiary of Guotai Junan International Holdings Limited,which we refer to as the Initial BaaS Investors in this annualreport.We and the Initial BaaS Investors each invested RMB200 million and held 25%

298、equity interests in the Battery Asset Company atits establishment.In December 2020,April 2021,August 2021 and July 2022,respectively,the Battery Asset Company entered intoagreements with new and existing investors for additional financing.We refer to the Initial BaaS Investors together with the othe

299、rinvestors of the Battery Asset Company that subsequently joined as the Battery Asset Company Investors.As of the date of this annualreport,we beneficially own approximately 19.4%of the equity interests in the Battery Asset Company.As a result,we have significantinfluence,but not control,over the bu

300、siness operations of the Battery Asset Company.If it fails in delivering smooth and stableoperations,we will suffer from negative customer reviews and even returns of products or services and our reputation may be materiallyand adversely affected.Table of Contents21Additionally,given that we generat

301、e a portion of our total revenues from sales of battery purchases and provision of service tothe Battery Asset Company,our results of operations and financial performance will be negatively affected if the Battery Asset Companyfails to operate smoothly.The Battery Asset Company may finance the purch

302、ase of batteries through issuance of equity and debt or bankborrowing.If the Battery Asset Company is unable to obtain future financings from the Battery Asset Company Investors or other thirdparties to meet its operational needs,it may not be able to make payments to us for the batteries purchased

303、from us on time,to continuepurchasing batteries from us and providing them to our users through battery subscription,or to otherwise maintain its healthy andsustainable operations.On the other hand,if the Battery Asset Company bears a significant rate of customer default on its paymentobligations,it

304、s results of operations and financial performance may be materially impacted,which will in turn reduce the value of ourand the Battery Asset Company Investors investments in the Battery Asset Company.In addition,in furtherance of the BaaS,we agreedto provide a guarantee to the Battery Asset Company

305、for the default in payment of monthly subscription fees from users,while themaximum amount of guarantee that can be claimed shall not be higher than the accumulated service fees we receive from the BatteryAsset Company.As the BaaS user base is expanding,if an increased number of default occurs,our r

306、esults of operations and financialperformance will be negatively affected.As of December 31,2023,the guarantee liability we provided to Battery Asset Company wasimmaterial.Reservations for our vehicles are subject to cancellation.Reservations for our vehicles are subject to cancellation by the custo

307、mer until delivery of the vehicle.We have experiencedcancellations in the past.While we require a deposit of less than 2.0%of the manufacturers suggested retail price,such deposit becomesnon-refundable after a certain period of time upon which the reservation will be automatically confirmed.Notwiths

308、tanding the non-refundable deposit,our users may still cancel their reservations for many reasons outside of our control.The potentially long wait fromthe time a reservation is made until the time the vehicle is delivered could also impact user decisions on whether to ultimately make apurchase,due t

309、o potential changes in preferences,competitive developments and other factors.If we encounter delays in the delivery ourcurrent or future vehicle models,we believe that a significant number of reservations may be cancelled.As a result,no assurance can bemade that reservations will not be cancelled a

310、nd will ultimately result in the final purchase,delivery,and sale of the vehicle.Suchcancellations could harm our financial condition,business,prospects and operating results.We may be subject to risks associated with assisted and intelligent driving technologies.We provide an enhanced advanced driv

311、er assistance system,or ADAS,and plan to offer higher levels of assisted and intelligentdriving functionalities,and through our research and development,we continually update and improve our assisted and intelligentdriving technologies.Regulatory,safety and reliability issues,or the perception there

312、of,many of which are beyond our control,couldcause the public,our users or our potential business partners to lose confidence in the assisted and intelligent driving solutions in general.The safety of such technology depends in part on end users of vehicles equipped with ADAS and higher levels of as

313、sisted and intelligentdriving systems,as well as other drivers,pedestrians,other obstacles on the roadways or other unforeseen events.For example,therehave been traffic accidents involving vehicles equipped with ADAS,including our NIO vehicles.Even though the actual causes of suchtraffic accidents m

314、ay not be associated with the use of ADAS,they resulted in,and any future similar accidents could result in,significant negative publicity,and,in the future,could result in suspension or prohibition of vehicles equipped with ADAS and otherassisted and intelligent driving systems,as well as regulator

315、y investigations,recalls,systems or features modifications and relatedactions.In addition,to the extent accidents associated with our ADAS and other assisted and intelligent driving systems(once launched)occur,we could be subject to liability,government scrutiny and further regulation.For example,ou

316、r research and development activitiesrelated to ADAS are subject to regulatory restrictions on surveying and mapping,as well as driverless road testing.Any furthertightening of regulatory restrictions could significantly impede our development of assisted and intelligent driving technologies.Any oft

317、he foregoing could materially and adversely affect our results of operations,financial condition and growth prospects.Table of Contents22We may face challenges in expanding our business and operations internationally and our ability to conduct business in internationalmarkets may be adversely affect

318、ed by legal,regulatory,political and economic risks.We face challenges and risks associated with expanding our business and operations globally into new geographic markets.Forexample,following our entry into the Norwegian market in 2021,we announced our provision of products and services for Germany

319、,theNetherlands,Denmark,and Sweden in October 2022.New geographic markets may have competitive conditions,user preferences,anddiscretionary spending patterns that are more difficult to predict or satisfy than our existing markets.In certain markets,we haverelatively little operating experience and m

320、ay not benefit from any first-to-market advantages or otherwise succeed.We may also faceprotectionist policies that could,among other things,hinder our ability to execute our business strategies and put us at a competitivedisadvantage relative to domestic companies.For example,in September 2023,the

321、European Commission announced that aninvestigation will be launched on whether to impose punitive tariffs to protect European Union producers against lower-priced Chineseelectric vehicle imports it says are benefiting from state subsidies.If there are any adverse findings during or upon the conclusi

322、on of suchinvestigation,the European Commission may impose countervailing duties or punitive tariffs,which may in turn negatively affect ouroperations and expansions in Europe.Local companies may have a substantial competitive advantage because of their greaterunderstanding of,and focus on,the local

323、 users,as well as their more established local brand names,requiring us to build brandawareness in that market through greater investments in advertising and promotional activity.International expansion may also requiresignificant capital investment,which could strain our resources and adversely imp

324、act current performance,while adding complexity toour current operations.We are subject to PRC law in addition to the laws of the foreign countries in which we operate.If any of ouroverseas operations,or our associates or agents,violate such laws,we could become subject to sanctions or other penalti

325、es,which couldnegatively affect our reputation,business and operating results.In addition,we may face operational issues that could have a material adverse effect on our reputation,business and results ofoperations,if we fail to address certain factors including,but not limited to,the following:lack

326、 of acceptance of our products and services,and challenges of localizing our offerings to appeal to local tastes;conforming our products to regulatory and safety requirements and charging and other electric infrastructures;failure to attract and retain capable personnel with international perspectiv

327、es who can effectively manage and operate localbusinesses;challenges in identifying appropriate local business partners and establishing and maintaining good working relationshipswith them;availability,reliability and security of international payment systems and logistics infrastructure;challenges

328、of maintaining efficient and consolidated internal systems,including technology infrastructure,and of achievingcustomization and integration of these systems with the other parts of our technology platform;challenges in replicating or adapting our company policies and procedures to operating environ

329、ments different from that ofChina;national security policies that restrict our ability to utilize technologies that are deemed by local governmental regulators topose a threat to their national security;the need for increased resources to manage regulatory compliance across our international busines

330、ses;compliance with privacy laws and data security laws and compliance costs across different legal systems;heightened restrictions and barriers on the transfer of data between different jurisdictions;differing,complex and potentially adverse customs,import/export laws,tax rules and regulations or o

331、ther trade barriers orrestrictions related compliance obligations and consequences of non-compliance,and any new developments in these areas;business licensing or certification requirements of the local markets;Table of Contents23challenges in the implementation of BaaS and other innovative business

332、 models in countries and regions outside of China;exchange rate fluctuations;political instability and general economic or political conditions in particular countries or regions,including territorial ortrade disputes,war and terrorism;andsignificant capital required for entering into new geographic

333、al markets,including cost of promoting our current and futurebrands in the new markets,building sales and services networks and power infrastructures.Failure to manage these risks and challenges could negatively affect our ability to expand our business and operations overseasas well as materially and adversely affect our business,financial condition and results of operations.Rising international