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(Mark One)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT
OF 1934
OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022.
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
OR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of event requiring this shell company report.
Commission file number: 001-38638
NIO Inc.
(Exact Name of Registrant as Specified in Its Charter)
N/A
(Translation of Registrant’s Name Into English)
Cayman Islands
(Jurisdiction of Incorporation or Organization)
Building 20, No. 56 AnTuo Road, Anting Town, Jiading District
Shanghai 201804, People’s Republic of China
(Address of Principal Executive Offices)
Wei Feng, Chief Financial Officer
Building 20, No. 56 AnTuo Road, Anting Town, Jiading District
Shanghai 201804, People’s Republic of China
Telephone: +8621-6908 2018
Email: ir@nio.com
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class
American depositary shares (each representing one
Class A ordinary share),par value US$0.00025 per share
Class A ordinary shares, par value US$0.00025 per
share
Class A ordinary shares, par value US$0.00025 per
share
Trading Symbol
NIO
Name of Each Exchange On Which Registered
New York Stock Exchange
9866
NIO
The Stock Exchange of Hong Kong Limited
The Singapore Exchange Securities Trading
Limited
Securities 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(d) of the Act:
None
(Title of Class)
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Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered
by the annual report:
As of December 31, 2022, there were (i) 1,570,605,680 Class A ordinary shares outstanding, par value 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 ☐ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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 ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of
the Exchange Act.
Large accelerated filer
Non-accelerated filer
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Accelerated filer
Emerging growth company
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards†
provided pursuant to Section 13(a) of the Exchange Act. ☐
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its
Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. § 7262(b)) by the registered
public accounting 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 registrant
included 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-based
compensation received by any of the registrant’s executive officers 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. GAAP
☐
International Financial Reporting Standards as issued by the
International Accounting Standards Board
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Other
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant
has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). ☐ 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) of
the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No
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INTRODUCTION
FORWARD-LOOKING INFORMATION
Part I.
TABLE OF CONTENTS
Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Item 3. KEY INFORMATION
Item 4. INFORMATION ON THE COMPANY
Item 4A. UNRESOLVED STAFF COMMENTS
Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Item 8. FINANCIAL INFORMATION
Item 9. THE OFFER AND LISTING
Item 10. ADDITIONAL INFORMATION
Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Part II.
Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Item 15. CONTROLS AND PROCEDURES
Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Item 16B. CODE OF ETHICS
Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Item 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Item 16G. CORPORATE GOVERNANCE
Item 16H. MINE SAFETY DISCLOSURE
Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Part III.
Item 17. FINANCIAL STATEMENTS
Item 18. FINANCIAL STATEMENTS
Item 19. EXHIBITS
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In this annual report on Form 20-F, or this annual report, except where the context otherwise requires and for purposes of this
annual report only:
INTRODUCTION
● “ADAS” refers to advanced driver assistance system;
● “ADRs” refer to the American depositary receipts that evidence the ADSs;
● “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 Data 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 People’s Republic of China, excluding, for the purpose of this annual report only, Hong
Kong, Macau and Taiwan;
● “Class A ordinary shares” refer to our Class 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 value
US$0.00025 per share. All the authorized Class B ordinary shares were redesignated as Class A ordinary shares at the
annual general meeting held on August 25, 2022;
● “Class C ordinary shares” refer to our Class C ordinary shares, par value US$0.00025 per share;
● “EVs” refer to electric passenger vehicles;
● “FOTA” refers to firmware over-the-air;
● “Hong Kong” or “HK” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;
● “Hong Kong Listing Rules” refer to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited, 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 the stock market (excluding the option market) operated by the
Hong Kong Stock Exchange which is independent from and operated in parallel with the Growth Enterprise Market of the
Hong Kong Stock Exchange;
● “Main Board of the Singapore Exchange” refers to the stock market operated by The Singapore Exchange Securities
Trading Limited;
● “NEVs” refer to new energy passenger vehicles;
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● “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 the VIEs, namely Beijing
NIO, 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$0.00025 per
share;
● “Relevant Period” refers to the period commencing from the date on which any of our shares first become secondary listed
on the Hong Kong Stock Exchange to and including the date immediately before the day on which the secondary listing is
withdrawn from the Hong Kong Stock Exchange;
● “RMB” or “Renminbi” refers to the legal currency of China;
● “Singapore Exchange” refers to The Singapore Exchange Securities Trading Limited; and
● “US$,” “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 annual report
are made at a rate of RMB6.8972 to US$1.00, the exchange rate in effect as of December 30, 2022 as set forth in the H.10 statistical
release of the Board of Governors of the Federal Reserve System. We make no representation that any Renminbi or U.S. dollar amounts
could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all. Unless
otherwise specified, the description of our vehicles, services and business models in this report refers to our business in China.
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FORWARD-LOOKING INFORMATION
This annual report contains forward-looking statements that reflect our current expectations and views of future events. These
forward-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 actual results, performance or achievements to be materially
different 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 Information—D. Risk Factors,” that may cause our actual
results, 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,” “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 affect
our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, but are
not limited to, statements about our goals and growth strategies, our future business development, financial condition and results of
operations, our expectations regarding demand for and market acceptance of our products and services, and assumptions underlying or
related to any of the foregoing.
Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may
later be found to be incorrect. Our actual results could be materially different from our expectations. Moreover, we operate in an evolving
environment. New risk factors and uncertainties emerge from time to time, and it is not possible for our management to predict all risk
factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of
factors, may cause actual results 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 electric vehicles industry may not
grow 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 effect
on our business and the market price of our ADSs or Class A ordinary shares. In addition, the rapidly evolving nature of the electric
vehicles industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition
of our market. Furthermore, if any one or more of the assumptions underlying the market data are later found to be incorrect, actual
results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking
statements.
The forward-looking statements made in this annual report relate only to events or information as of the date on which the
statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are
made or to reflect the occurrence of unanticipated events. You should read this annual report and the documents that we refer to in this
annual report and exhibits to this annual report completely and with the understanding that our actual future results may be materially
different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
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PART I.
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
Our Holding Company Structure and Contractual Arrangements with the VIEs
NIO Inc. is not an operating company in China but a Cayman Islands holding company with no equity ownership in its
consolidated variable interest entities, or VIEs. We conduct our operations in China (i) primarily through our PRC subsidiaries, and (ii) to
a much lesser extent, through the VIEs, namely Beijing NIO, Anhui NIO AT, and Anhui NIO DT, with each of which we maintain
contractual arrangements. We have also established subsidiaries in the United States, Germany, the United Kingdom, Norway and other
overseas jurisdictions to promote our services and businesses, entering into business contracts with offshore counterparties and holding
overseas intellectual properties.
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 foreign
investment in certain services related to autonomous driving as well as the holding of relevant licenses by foreign entities. Additionally,
in practice, subject to the qualifications set by China Banking and Insurance Regulatory Commission, or the CBIRC, for foreign
shareholders of the insurance brokerage companies, the CBIRC typically would not approve the establishment of foreign-invested
insurance brokerage companies which perform insurance brokerage services and hold certain related licenses. Accordingly, we operate
these businesses in China through Beijing NIO, Anhui NIO AT, and Anhui NIO DT, or as referred to as the VIEs. We rely on contractual
arrangements among our relevant PRC subsidiaries, the VIEs and their nominee shareholders to maintain a controlling financial interest
as the primary beneficiary of each VIE (as defined in US GAAP, ASC 810). Under US GAAP we consolidate each VIE within our
consolidated financial statements. Specifically, we operate value-added telecommunication services, including without limitation,
performing internet information services, and hold certain related licenses, through Beijing NIO. We intend to obtain requisite licenses
for certain supporting functions during the development of our autonomous driving technology through Anhui NIO AT. We intend to
provide insurance brokerage services which are mainly vehicle-related and property-related and to hold the requisite licenses through
Anhui NIO DT. As of the date of this annual report, these businesses are still in early stage. As used in this annual report, “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 the VIEs and their respective subsidiaries, where applicable.
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The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIEs, as of the date of this
annual report:
In April 2018, we, through one of our PRC subsidiaries, entered into a series of contractual arrangements with Beijing NIO and
its shareholders, which were replaced by a new set of contractual arrangements we entered into with the same parties in April 2021.
Further, in November 2022 and December 2022, we, through our respective PRC subsidiaries, entered into a series of contractual
arrangements with each of Anhui NIO AT and Anhui NIO DT, respectively, and their respective shareholders, to conduct certain future
operations 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 by
our subsidiaries;
● exercise effective control over the VIEs; and
● hold an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC
law.
These contractual agreements include an exclusive business cooperation agreement, exclusive option agreement, equity pledge
agreement, loan agreement and power of attorney. For more details of these contractual arrangements, see “Item 4. Information on the
Company—C. Organizational Structure—Contractual Agreements with the VIEs and Their Shareholders.”
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Beijing NIO, Anhui NIO AT and Anhui NIO DT, taking into account all of their respective business with or without foreign
investment restrictions and prohibitions under PRC laws, did not contribute to our total revenues in 2020, 2021 and 2022. The VIEs
provided services internally to our subsidiaries, and such services amounted to RMB0.2 million, RMB0.6 million and RMB89.2 million
(US$12.9 million) for the years ended December 31, 2020, 2021 and 2022, respectively. As of December 31, 2020, 2021 and 2022, none
of 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 ordinary shares are not holding equity interests in the VIEs in China but instead are holding
equity interests in a holding company incorporated in the Cayman Islands. We do not have any equity interests in the VIEs. However, as
a result of contractual arrangements, we have a controlling financial interest over and are considered the primary beneficiary of each of
the VIEs, and we have consolidated the financial results, pursuant to US GAAP, each of these entities in our consolidated financial
statements. However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the
VIEs and we may incur substantial costs to enforce the terms of the arrangements. If the VIEs or the nominee shareholders fail to
perform their respective obligations under the contractual arrangements, we could be limited in our ability to enforce the contractual
arrangements that give us effective control over the VIEs. Furthermore, if we are unable to maintain effective control, we would not be
able to continue to consolidate the financial results of the VIEs in our financial statements. See “Item 3. Key Information—D. Risk
Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their shareholders to hold a
controlling financial interest as the primary beneficiary over each VIE and its related business, which may not be as effective as direct
ownership in providing operational control” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure
—The shareholders of the VIEs have conflicts of interest 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, regulations
and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the
VIEs and their nominee shareholders. It is uncertain whether any new PRC laws or regulations relating to contractual arrangements will
be adopted or if adopted, what they would provide. If we or any of the VIEs is found to be in violation of any existing or future PRC
laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would
have broad discretion to take action in dealing with such violations or failures. Our Cayman Islands holding company, our PRC
subsidiaries and VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could
affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance
of the VIEs and our company as a whole. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—
If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on
foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we
could be subject to severe penalties or be forced to relinquish our interests in those operations.”
PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted
overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors. Implementation of industry-wide regulations in this nature may cause the value of such securities to
significantly decline or become worthless. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing
Business in China—The PRC government’s significant oversight and discretion over our business operation could result in a material
adverse change in our operations and the value of our ADSs.”
Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of
laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our
ADSs. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Uncertainties in
the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.”
Permissions Required from the PRC Authorities for Our Operations
Our operations in China are governed by PRC laws and regulations. As of the date of this annual report, our PRC subsidiaries
and VIEs have obtained the requisite licenses and permits from the PRC government authorities that are material for the main business
operations of our holding company, our PRC subsidiaries and the VIEs in China, including, among others, a license for conducting
Internet content provision services, or the ICP license, and the insurance brokerage license. Given the uncertainties of interpretation and
implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we may be required to
obtain additional licenses, permits, filings or approvals for our business operations in the future. For more detailed information, see “Item
3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity,
uncertainties and changes in PRC regulations on internet-related business, automotive businesses and other business carried out by our
PRC subsidiaries and VIEs.”
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Meanwhile, the PRC government has recently sought to exert more oversight and control over capital raising activities of listed
companies that are conducted overseas and/or foreign investment in China-based issuers. In December 2021, the Cyberspace
Administration of China, or the CAC, together with other authorities, jointly promulgated the Cybersecurity Review Measures, which
became effective on February 15, 2022 and replaces its predecessor regulation. Pursuant to the Cybersecurity Review Measures, critical
information infrastructure operators that procure internet products and services and network platform operators that conduct data process
activities must be subject to the cybersecurity review if their activities affect or may affect national security. On February 17, 2023,
China Securities Regulatory Commission, or the CSRC, released several regulations regarding the filing requirements for overseas
offerings and listings by domestic companies, including the Trial Administrative Measures of Overseas Securities Offering and Listing
by Domestic Companies and five supporting guidelines (collectively, the “Overseas Listing Filing Rules”), which were formally
implemented on March 31, 2023. According to the Overseas Listing Filing Rules, domestic enterprises like us that have completed
overseas listings are not required to file with CSRC immediately, but shall carry out filing procedures as required if we conduct
refinancing or fall within other circumstances that require filing with the CSRC. Any failure to obtain or delay in obtaining such approval
or completing such procedures could subject us to restrictions and penalties imposed by the CSRC, the CAC or other PRC regulatory
authorities, which could include fines and penalties on our operations in China, delays of or restrictions on the repatriation of the
proceeds from our offshore offerings into China, or other actions that could materially and adversely affect our business, financial
condition, results of operations, and prospects, as well as the trading price of our ADSs. For more detailed information, see “Item 3. Key
Information — D. Risk Factors — Risks Related to Doing Business in China — The approval of or the filing with the CSRC or other
PRC government authorities may be required in connection with our future offshore listings and capital raising activities under PRC law,
and, if required, we cannot predict whether or for how long we will be able to obtain such approval or filing.”
The Holding Foreign Companies Accountable Act
Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed audit
reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting
Oversight Board (United States), or the PCAOB, for two consecutive years, the SEC will prohibit our shares or ADSs from being traded
on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB
issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public
accounting firms headquartered in mainland China and Hong Kong, including our auditor. In May 2022, the SEC conclusively listed NIO
Inc. as a Commission-Identified Issuer under the HFCAA following the filing of the annual report on Form 20-F for the fiscal year ended
December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed
mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public
accounting firms. For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file
this annual report on Form 20-F. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in
mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect
and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm
headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified
as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no
assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for
two consecutive years, we would become subject to the prohibition on trading under the HFCAA. For more details, see “Item 3. Key
Information—D. Risk Factors—Risks Related to Doing Business in China—The PCAOB had historically been unable to inspect our
auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of
our auditor in the past has deprived our investors with the benefits of such inspections” and “Item 3. Key Information—D. Risk Factors
—Risks Related to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the HFCAA in the
future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of the ADSs, or the threat of
their being delisted, may materially and adversely affect the value of your investment.”
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Cash Flows through Our Organization
NIO Inc. is a holding company with no material operations of its own. We conduct our operations in China (i) primarily through
our PRC subsidiaries, and (ii) to a much lesser extent, the VIEs. As a result, although other means are available for us to obtain financing
at the holding company level, NIO Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend
upon dividends paid by our PRC subsidiaries and service fees paid by the VIEs in China. If any of our subsidiaries incurs debt on its own
behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to NIO Inc. In addition, our PRC
subsidiaries are permitted to pay dividends to NIO Inc. only out of their retained earnings, if any, as determined in accordance with PRC
accounting standards and regulations. Further, our PRC subsidiaries and VIEs are required to make appropriations to certain statutory
reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event
of a solvent liquidation of the companies. For more details, see “Item 5. Operating and Financial Review and Prospects — B. Liquidity
and Capital Resources — Holding Company Structure”.
Under PRC laws and regulations, our PRC subsidiaries and VIEs are subject to certain restrictions with respect to paying
dividends or otherwise transferring any of their net assets to us. Remittance of dividends by a wholly foreign-owned enterprise out of
China is also subject to examination by the banks designated by the State Administration of Foreign Exchange of the PRC, or SAFE. The
amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the net assets of the VIEs in
which we have no legal ownership, totaling RMB20,656.8 million, RMB38,902.1 million and RMB40,720.9 million (US$5,904.0
million) as of December 31, 2020, 2021 and 2022, respectively, and the net assets of the VIEs that are restricted was nil, nil and
RMB50.0 million (US$7.2 million) as of December 31, 2020, 2021 and 2022, respectively. For risks relating to the fund flows of our
operations in China, see “Item 3. Key Information — D. Risk Factors — Risks Related to Doing Business in China — We may rely on
dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and
any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to
conduct our business”.
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid within
China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay dividends in the future.
Hypothetical pre-tax earnings
Tax on earnings at statutory rate of 25% (2)
Net earnings available for distribution
Withholding tax at standard rate of 10% (3)
Net distribution to Parent/Shareholders
Notes:
Tax calculation (1)
100 %
(25)%
75 %
(7.5)%
67.5 %
(1) For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings amount, not
considering timing differences, is assumed to equal 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, the
table above reflects a maximum tax scenario under which the full statutory rate would be effective.
(3) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign invested
enterprise, or the FIE, to its immediate holding company outside of China. A lower withholding income tax rate of 5% is applied if
the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement 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 funding to our PRC subsidiaries only through capital contributions or loans, and to the
VIEs only through loans, subject to satisfaction of applicable government registration and approval requirements. NIO Inc. and its
subsidiaries extended loans to the nominee shareholders of the VIEs for their investment in the VIEs, with outstanding principal amount
of RMB19.7 million, RMB0.08 million and RMB50.09 million (US$7.26 million) as of December 31, 2020, 2021 and 2022,
respectively. In addition, NIO Inc. and its subsidiaries also extended loans to the VIEs for operations with outstanding principal amount
of nil, RMB7.0 million and RMB32.8 million (US$4.7 million) as of December 31, 2020, 2021 and 2022, respectively.
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Pursuant to the exclusive business cooperation agreements dated April 19, 2018 and April 12, 2021, respectively, between NIO
Co., Ltd., or Shanghai NIO, a wholly-owned subsidiary of our company, and Beijing NIO, Shanghai NIO may adjust the payment time
and payment method of the service fees, and Beijing NIO will accept any such adjustment. For the years ended December 31, 2020, 2021
and 2022, no service under the contractual arrangements was provided by Shanghai NIO and no service fee was paid by Beijing NIO to
Shanghai NIO accordingly. We intend to determine the amount of service fee and payment method based on the working capital needs of
Shanghai NIO and Beijing NIO, and settle such service fees accordingly in the future. Pursuant to a separate service agreement, for the
years ended December 31, 2020, 2021 and 2022, Shanghai NIO paid Beijing NIO RMB0.2 million, RMB0.6 million and RMB0.7
million (US$0.1 million) for services provided by Beijing NIO.
Pursuant to the exclusive business cooperation agreement dated November 30, 2022 between Anhui NIO Autonomous Driving
Technology Co., Ltd., or Anhui NIO AD, a wholly-owned subsidiary of our company, and Anhui NIO AT, Anhui NIO AD may adjust the
payment time and payment method of the service fees, and Anhui NIO AT will accept any such adjustment. For the year ended
December 31, 2022, no service under the contractual arrangements was provided by Anhui NIO AD and no service fee was paid by
Anhui NIO AT to Anhui NIO AD accordingly. We intend to determine the amount of service fee and payment method based on the
working capital needs of Anhui NIO AD and Anhui NIO AT, and settle such service fees accordingly in the future. Pursuant to a separate
service agreement, for the years ended December 31, 2020, 2021 and 2022, Anhui NIO AD paid Anhui NIO AT RMB nil, RMB nil and
RMB70.1 million (US$10.2 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 NIO
China, a PRC subsidiary in which we hold 92.114% controlling equity interests, and Anhui NIO DT, NIO China may adjust the payment
time and payment method of the service fees, and Anhui NIO DT will accept any such adjustment. For the year ended December 31,
2022, no service under the contractual arrangements was provided by NIO China and no service fee was paid by Anhui NIO DT to NIO
China accordingly. We intend to determine the amount of service fee and payment method based on the working capital needs of NIO
China and Anhui NIO DT, and settle such service fees accordingly in the future.
NIO Inc. has not declared or paid any cash dividends, nor does it have any present plan to pay any cash dividends on our
ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to
operate and expand our business. See “Item 8. Financial Information — A. Consolidated Statements and Other Financial Information —
Dividend Policy.” For Cayman Islands, PRC and United States federal income tax considerations of an investment in our ADSs or
Class A ordinary shares, see “Item 10. Additional Information — E. Taxation.”
As of December 31, 2020, 2021 and 2022 and for the years ended December 31, 2020, 2021 and 2022, 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 information
related to the consolidated VIEs were insignificant to our consolidated financial statements.
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
Summary of Risk Factors
An investment in our ADSs and Class A ordinary shares involves significant risks. Below is a summary of material risks we
face, organized under relevant headings. These risks are discussed more fully in Item 3. Key Information—D. Risk Factors.
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Risks Related to Our Business and Industry
Risks and uncertainties related to our business and industry include, but are not limited to, the following:
● Our ability to develop and manufacture vehicles of sufficient quality and appeal to customers on schedule and on a large
scale is still evolving;
● We have not been profitable, and only generated positive cash flows from operations in certain periods;
● Our business, financial condition and results of operations may be adversely affected by the COVID-19 pandemic;
● We have a limited operating history and face significant challenges as a new entrant into our industry;
● Manufacturing in collaboration with partners is subject to risks;
● The unavailability, reduction or elimination of government and economic incentives or government policies which are
favorable for electric vehicles and domestically produced vehicles could have a material adverse effect on our business,
financial condition, operating results and prospects;
● Our vehicles may not perform in line with customer expectations;
● Any delays in the manufacturing and launch of the commercial production vehicles in our pipeline could have a material
adverse effect on our business;
● We may face challenges providing our power solutions;
● Our services may not be generally accepted by our users. If we are unable to provide good customer service, our business
and reputation may be materially and adversely affected;
● We are dependent on our suppliers, many of whom are our single source suppliers for the components they supply;
● We rely on Battery Asset Company to work together with us to provide Battery as a Service to our users. If Battery Asset
Company fails to achieve smooth and stable operations, our Battery as a Service and reputation may be materially and
adversely affected; and
● Our business is subject to a variety of laws, regulations, rules, policies and other obligations regarding cybersecurity,
privacy, data protection and information security. Any failure to comply with these laws, regulations and other obligations
or any losses, unauthorized access or releases of confidential information or personal data could subject us to significant
reputational, financial, legal and operational consequences.
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Risks Related to Our Corporate Structure
We 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 a much lesser extent, the VIEs with which we maintain contractual
arrangements. Investors in our ADSs and Class A ordinary shares thus are not purchasing equity interests in the VIEs in
China but instead are purchasing equity interests in a Cayman Islands holding company. If the PRC government deems that
our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the
relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be
subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company in the Cayman
Islands, the VIEs and investors of our company face uncertainty about potential future actions by the PRC government that
could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the
financial performance of the VIEs and our company as a group;
● We rely on contractual arrangements with the VIEs and their shareholders to exercise a controlling financial interest as the
primary beneficiary over each VIE and its related business, 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 limitations
based on PRC laws and regulations; and
● The shareholders of the VIEs have conflicts of interest with us, which may materially and adversely affect our business and
financial condition.
Risks Related to Doing Business in China
We face risks and uncertainties related to doing business in China in general, including, but not limited to, the following:
● Changes in China’s political or social conditions or government policies could have a material and adverse effect on our
business and results of operations;
● Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement
of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and
the value of our ADSs and Class A ordinary shares. For more details, see “Item 3. Key Information — D. Risk Factors —
Risks Related to Doing Business in China — Uncertainties in the interpretation and enforcement of PRC laws and
regulations could limit the legal protections available to you and us”;
● The PRC government’s significant authority in regulating our operations and its oversight and control over capital raising
activities of listed companies conducted overseas by, and foreign investment in, China-based issuers could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide
regulations in this nature may cause the value of such securities to significantly decline. For more details, see “Item 3. Key
Information — D. Risk Factors — Risks Related to Doing Business in China — The PRC government’s significant
oversight and discretion over our business operation could result in a material adverse change in our operations and the
value of our ADSs”;
● The approval of or the filing with the CSRC or other PRC government authorities may be required in connection with our
future offshore listings and capital raising activities under PRC law, and, if required, we cannot predict whether or for how
long we will be able to obtain such approval or filing;
● We may be adversely affected by the complexity, uncertainties and changes in PRC regulations on internet-related
business, automotive businesses and other business carried out by our PRC subsidiaries and VIEs;
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● The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial
statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with
the benefits of such inspections; and
● Our ADSs may be prohibited from being traded in the United States under the HFCAA in the future if the PCAOB
determines that it is unable to inspect or investigate completely auditor located in China. The delisting of the ADSs, or the
threat of their being delisted, may materially and adversely affect the value of your investment. For more details, see “Item
3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Our ADSs may be prohibited from
trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely
auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely
affect the value of your investment.”
Risks Related to Our ADSs and Class A Ordinary Shares
In 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 Stock
Exchange;
● If we change the listing venue of our securities, including delisting from the New York Stock Exchange, the Hong Kong
Stock Exchange, or the Singapore Exchange, you may lose the shareholder protection mechanisms afforded under the
regulatory 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 in
substantial losses to investors;
● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their
recommendations regarding our Class A ordinary shares and/or ADSs, the market price for our Class A ordinary shares
and/or ADSs and trading volume could decline; and
● Our dual-class voting structure will limit the holders of our Class A ordinary shares and ADSs to influence corporate
matters, provide certain shareholders of ours with substantial influence and could discourage others from pursuing any
change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.
Risks Related to Our Business and Industry
Our ability to develop and manufacture vehicles of sufficient quality and appeal to customers on schedule and on a large scale is still
evolving.
Our future business depends in large part on our ability to execute on our plans to develop, manufacture, market and sell our
electric vehicles. We plan to manufacture our vehicles in higher volumes than our present production capabilities.
Our continued development and manufacturing of our current and future 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;
● securing 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 core
technologies and new vehicle models, such as our NIO Autonomous Driving, or NAD, and technologies for batteries;
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● 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 manufacturing partners and suppliers; and
● other delays in manufacturing and production capacity expansion, and cost overruns.
Currently, our product portfolio consists of the ES8, a six-seater smart electric flagship SUV, the ES7 (or the EL7), a mid-large
five-seater smart electric SUV, the ES6, a five-seater all-round smart electric SUV, the EC7, a five-seater smart electric flagship coupe
SUV, the EC6, a five-seater smart electric coupe SUV, the ET7, a smart electric flagship sedan, and the ET5, a mid-size smart electric
sedan. Our vehicles may not meet customer expectations and our future models may not be commercially viable. Historically, automobile
customers have expected auto companies to periodically introduce new and improved vehicle models. In order to meet these
expectations, we may be required to introduce new vehicle models and enhanced versions of existing vehicle models. To date, we have
limited experience designing, testing, manufacturing, marketing and selling our electric vehicles and therefore cannot assure you that we
will be able to meet customer expectations.
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 certain periods.
We have not been profitable since our inception, and only generated positive cash flows from operations in certain periods. We
incurred net losses of RMB5,304.1 million, RMB4,016.9 million and RMB14,437.1 million (US$2,093.2 million) for the years ended
December 31, 2020, 2021 and 2022, respectively. In addition, although we generated positive operating cash flows in 2020 and 2021, we
had negative operating cash flows of RMB3,866.0 million (US$560.5 million) in 2022.
There can be no assurance that we will not experience liquidity problems in the future. We may not be able to fulfill our
obligations in providing vehicles, embedded products or services to our users in respect of advances from customers, the failure of which
may negatively affect our cash flow position. If we fail to generate sufficient revenue from our operations, or if we fail to maintain
sufficient cash and financing, we may not have sufficient cash flows to fund our business, operations and capital expenditure and our
business and financial position will be adversely affected.
We have made significant up-front investments in research and development, service network, and sales and marketing to
rapidly develop and expand our business. We expect to continue to invest significantly in research and development and sales and service
network, and in production capacity expansion, to further develop and expand our business, and these investments may not result in an
increase in revenue or positive cash flow on a timely basis, or at all. For example, we are working on the development of electric vehicles
targeting the mass market, autonomous driving technologies and smart devices. We cannot assure you that we will be able to compete
successfully against existing or future competitors in those new areas.
We may continue to record net losses and negative operating cash flows in the near future. We may not generate sufficient
revenues or we may incur substantial losses for a number of reasons, including lack of demand for our vehicles and services, increasing
competition, challenging macro-economic environment due to the COVID-19 pandemic, as well as other risks discussed herein, and we
may incur unforeseen expenses, or encounter difficulties, complications and delays in generating revenue or achieving profitability. If we
are unable to achieve profitability, we may have to reduce the scale of our operations, which may impact our business growth and
adversely affect our financial condition and results of operations. In addition, our continuous operation depends on our capability to
improve operating cash flows as well as our capacity to obtain sufficient external equity or debt financing. If we do not succeed in doing
so, we may have to limit the scale of our operations, which may limit our business growth and adversely affect our financial condition
and results of operations.
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Our business, financial condition and results of operations may be adversely affected by the COVID-19 pandemic.
Since the beginning of 2020, the COVID-19 pandemic has resulted in temporary closure of many corporate offices, retail stores,
manufacturing facilities and factories across China and the world. Our operations experienced disruptions, such as temporary closure of
our offices and/or those of our customers or suppliers and suspension of services, resulting in a reduction of vehicles manufactured and
delivered, which affected our business, financial condition, results of operations and cash flow. In particular, in late March and April
2022, our vehicle production was impacted by the supply chain volatilities and other constraints caused by a new wave of COVID-19
outbreaks in certain regions in China. Our results of operations have been and could continue to be adversely affected to the extent the
COVID-19 pandemic or any other epidemic harms the Chinese economy in general. In addition, the ongoing global pandemic may
adversely affect the supply chains, which in turn may materially and adversely affect our business and results of operations. The global
pandemic may also delay the execution of our overseas market expansion plan. Further, to the extent the COVID-19 pandemic adversely
affects our business and financial results, it has and may continue to have the effect of heightening many of the other risks described in
this annual report, such as those relating to our level of indebtedness, our need to generate sufficient cash flows to service our
indebtedness and our ability to comply with the covenants contained in the agreements that govern our indebtedness.
There has been an easing of the travel restrictions and quarantine requirements related to COVID-19 in China since December
2022. Shortly after that, there were surges of cases in many cities during this time which caused impacts to certain of our customers
and/or suppliers in locations where we have service centers and vehicle delivery centers, which have adversely affected our business,
financial condition, results of operations and cash flows. The extent to which the pandemic impacts our results of operations going
forward will depend on future developments which are highly uncertain and unpredictable, including the frequency, duration and extent
of outbreaks of COVID-19, the appearance of new variants with different characteristics, the success or failure of efforts to contain or
treat cases, and future actions we or the authorities may take in response to these developments. Even if the economic impact of COVID-
19 recedes, the pandemic could have a lingering, long-term effect on business activities and consumption behavior. There is no assurance
that we will be able to adjust our business operations to adapt to these changes and the increasingly complex environment in which we
operate. Consequently, the COVID-19 pandemic may continue to adversely affect our business, financial condition and results of
operations in the current and future years.
We have a limited operating history and face significant challenges as a new entrant into our industry.
We were formed in 2014 and began making deliveries to the public of our first volume manufactured vehicle in June 2018. Our
current product portfolio consists of the ES8, the ES7 (or the EL7), the ES6, the EC7, the EC6, the ET7 and the ET5.
You should consider our business and prospects in light of the risks and challenges we face as a new entrant into our industry,
including, among other things, 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 customer base;
● successfully market our vehicles and services;
● properly price our products and services, and successfully anticipate the sales volume of our vehicle products and the take-
rate of services provided to users;
● improve and maintain our operational efficiency;
● maintain a reliable, secure, high-performance and scalable technology infrastructure;
● attract, retain and motivate talented employees;
● anticipate and adapt to changing market conditions, including technological developments and changes in competitive
landscape; and
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● navigate an evolving 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.
We have limited experience to date in high volume manufacturing of our electric vehicles. We cannot assure you that we will be
able to develop efficient, automated, cost-efficient manufacturing capability and processes, and reliable sources of component supply that
will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required to
successfully sell our current and future vehicle models in a large scale.
Furthermore, our vehicles are highly technical products that will require maintenance and support. If we were to cease or cut
back operations, even years from now, buyers of our vehicles from years earlier might encounter difficulties in maintaining their vehicles
and obtaining satisfactory support. We also believe that our service offerings, including user confidence in our ability to provide our
power solutions and honor our obligations under our 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 operations
will continue for many years. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing
business relationships with us if they are not convinced that our business will succeed.
Manufacturing in collaboration with partners is subject to risks.
We partner with Jianghuai Automobile Group Ltd., or JAC, a major state-owned automobile manufacturer in China, for the joint
manufacturing of our vehicles. JAC jointly manufactures with us all of our current vehicle models, including the ES8, the ES7 (or the
EL7), the ES6, the EC7, the EC6, the ET7 and the ET5, in the first advanced manufacturing base, or the F1 Plant, and the second
advanced manufacturing base, or the F2 Plant, and will jointly manufacture with us our other vehicle models in the F2 Plant. For the
years ended December 31, 2020, 2021 and 2022, we paid JAC for each vehicle produced on a per-vehicle basis monthly.
Pursuant to the joint manufacturing arrangements we entered into with JAC, as amended and renewed, JAC and us jointly
manufacture a series of our vehicle models in the F1 Plant. We are in charge of vehicle development and engineering, supply chain
management, manufacturing techniques and quality management and assurance. Jianglai Advanced Manufacturing Technology (Anhui)
Co., Ltd., or Jianglai, a joint venture for operation management established by JAC and us, who joined as a party to the joint
manufacturing arrangements in May 2021, is responsible for parts assembly and operation management. Pursuant to the manufacturing
cooperation agreements we entered into with JAC in September 2022, JAC will jointly manufacture with us the ET5 and potentially our
other vehicle models in the F2 Plant. We will be in charge of relevant trademarks and related technologies license, vehicle specifications,
parameters and option requirements, as well as raw materials supply. In relation to the manufacturing cooperation agreements, we also
entered into an assets transfer agreement and its supplementary agreement with JAC on December 23, 2022, under which we would
transfer to JAC certain equipment and other assets.
Collaboration with third parties for the manufacturing of vehicles is subject to operational risks that may be beyond our control.
We could experience production and delivery delays to the extent our partners do not meet agreed-upon timelines or experience capacity
constraints. The volume of vehicles manufactured could fall short of expectation if there is any adverse change in our partners’ liquidity
position or overall operations that causes their inability to meet their contractual manufacturing obligations. There is risk of potential
disputes with partners, and we and our brand image could be affected by adverse publicity or public sentiment towards our partners
whether or not such publicity or public sentiment is related to their collaboration with us. In addition, although we are involved in each
step of the supply chain and manufacturing process, given that we also rely on our partners to meet our quality standards, there can be no
assurance that we will successfully maintain quality standards.
Our joint manufacturing arrangement with JAC for the vehicle manufacturing in the F1 plant will expire in May 2024, and our
manufacturing cooperation agreement with JAC for the vehicle manufacturing in the F2 plant will expire in September 2025, upon
which, respectively, we will need to renew the relevant contract with JAC or locate other manufacturing partners. We may be unable to
enter into new agreements or extend existing agreements with JAC and other third-party manufacturing partners on terms and conditions
acceptable to us. If that happens, we may need to significantly enhance our own production capacity, and there is substantial uncertainty
on our ability to achieve that and the timetable related thereto. The expense and time required to complete any transition, and to assure
that vehicles manufactured at facilities of new third-party partners, or at our own facilities if we choose to enhance our own production
capacity, comply with our quality standards and regulatory requirements, may be greater than anticipated.
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The unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for
electric vehicles and domestically produced vehicles could have a material adverse effect on our business, financial condition,
operating results and prospects.
Our growth has benefited significantly from the government subsidies, economic incentives and government policies that
support the growth of new energy vehicles. Favorable government incentives and subsidies in China include one-time government
subsidies, exemption from vehicle purchase tax, exemption from license plate restrictions in certain cities, preferential utility rates for
charging facilities and more. Changes in government subsidies, economic incentives and government policies to support NEVs could
adversely affect the results of our operations.
China’s central government provided subsidies for purchases of certain NEVs until 2022 and reviews and further adjusts the
subsidy standard on an annual basis. We have seen a general decrease in the amount of government subsidies available to purchase of
NEVs in recent years. For example, the 2020 subsidy standard, effective from April 23, 2020, reduces the base subsidy amount in general
by 10% for each NEV, and sets subsidies for around two million vehicles as the upper limit of annual subsidy scale. The 2022 subsidy
standard was further reduced by 30% compared to the standard of 2021. In addition, the subsidy policy for the purchase of NEVs in 2022
was terminated on December 31, 2022, and that subsidy will no longer be granted to vehicles where car licenses are issued after
December 31, 2022. We believe that our sales performance in 2020, 2021 and 2022 was negatively affected by the reduction in the
subsidy standard to some extent. The termination of government subsidies starting from the end of 2022 could further affect our sales
performance in 2023.
Our vehicles sales may also be impacted by government policies such as tariffs on imported vehicles and foreign investment
restrictions in the industry. The tariff in China on imported passenger vehicles (other than those originating in the United States of
America) was reduced to 15% starting from July 1, 2018. As a result, pricing advantage of domestically manufactured vehicles could be
diminished. There used to be a certain limitation on foreign ownership of automakers in China, but for automakers of NEVs, such limit
was lifted in 2018. Further, pursuant to the Special Administrative Measures (Negative List) for Foreign Investment Access (2021
Version), or 2021 Negative List, most recently jointly promulgated by the Ministry of Commerce of the PRC, or the MOFCOM, and the
National Development and Reform Commission of the PRC, or the NDRC, on December 27, 2021 and became effective on January 1,
2022, the limit on foreign 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 of the NEV industry and reduce our pricing advantage, which may adversely affect our business, results of
operations and financial condition.
Apart from vehicle purchase subsidies, China’s central government has adopted an NEV credit scheme that incentivizes OEMs
to increase the production and sale of NEVs. Excess positive NEV credits (“automotive regulatory credits”) are tradable and may be
sold to other enterprises through a credit trading scheme established by the Ministry of Industry and Information Technology of the PRC,
or the MIIT. For further information relating to automotive regulatory credits, please refer to “Item 4. Information on the Company—B.
Business Overview—Regulations—Regulations Relating to Parallel Credits Policy on Vehicle Manufacturers and Importers.” We have
earned positive NEV credits through manufacturing new energy vehicles and sold some of our excess positive NEV credits to other
vehicle manufacturers or importers. We generated revenue from the sale of automotive regulatory credits totaled RMB67.3 million
(US$9.8 million) in 2022. The credits earned are calculated based on the formula published by the MIIT, which is dependent on various
metrics such as vehicle mileage and battery energy efficiency. There is no guarantee that we will continue to earn a similar level or
amount of credits going forward. Moreover, as the prices for automotive regulatory credits are subject to market demand, which affects
the amount of regulatory credits generated by other vehicle manufacturers during a given period, we cannot assure you that we will
continue to sell our automotive regulatory credits at the current price or a higher price. Any changes in government policies to restrict or
eliminate such automotive regulatory credits trading could adversely affect our business, financial condition and results of operations.
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Such negative influence and our undermined sales performance resulted therefrom could continue. Furthermore, China’s central
government provides certain local governments with funds and subsidies to support the roll-out of charging infrastructure. See “Item 4.
Information on the Company—B. Business Overview—Regulations—Favorable Government Policies Relating to New Energy Vehicles
in the PRC.” These policies are subject to change and beyond our control. We cannot assure you that any changes would be favorable to
our business. Furthermore, any reduction, elimination, delayed payment or discriminatory application of government subsidies and
economic incentives because of policy changes, the reduced need for such subsidies and incentives due to the perceived success of
electric vehicles, fiscal tightening or other factors may result in the diminished competitiveness of the alternative fuel vehicle industry
generally or our electric vehicles in particular. In addition, as we seek to increase our revenues from vehicle sales, we may also
experience an increase in accounts receivable relating to government subsidies. However, the collection of the government subsidies is
subject to the appropriation arrangement and cadence of the relevant governmental authority. Any uncertainty or delay in collection of
the government subsidies may also have an adverse impact on our financial condition. For more details, please refer to “11. Other Non-
current Assets” set forth in our consolidated financial statements included elsewhere in this annual report. Any of the foregoing could
materially and adversely affect our business, results of operations, financial condition and prospects.
Our vehicles may not perform in line with customer expectations.
Our vehicles may not perform in line with customers’ expectations. For example, our vehicles may not have the durability or
longevity of other vehicles in the market, and may not be as easy and convenient to repair as other vehicles in the market. Any product
defects or any other failure of our vehicles to perform as expected could harm our reputation and result in adverse publicity, lost revenue,
delivery delays, product recalls, product liability claims, harm to our brand and reputation, and significant warranty and other expenses,
and could have a material adverse impact on our business, financial condition, operating results and prospects.
In addition, the range of our vehicles on a single charge declines principally as a function of usage, time and charging patterns
as well as other factors. For example, a customer’s use of his or her electric vehicle as well as the frequency with which he or she charges
the battery can result in additional deterioration of the battery’s ability to hold a charge.
Furthermore, our vehicles may contain defects in design and manufacture that may cause them not to perform as expected or
that may require repair. We have delivered vehicles based on NIO Technology Platform 2.0, or NT2.0, with certain features of the NAD,
our next generation, proprietary full stack autonomous driving technology, and plan to 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 and software products are inherently complex and often contain defects and errors when first introduced.
While we have performed extensive internal testing on our vehicles’ software and hardware systems, we have a limited frame of
reference by which to evaluate the long-term performance of our systems and vehicles. There can be no assurance that we will be able to
detect 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 need
to delay deliveries, initiate product recalls and provide servicing or updates under warranty at our expense, which could adversely affect
our brand in our target markets and could adversely affect our business, prospects and results of operations.
Any delays in the manufacturing and launch of the commercial production vehicles in our pipeline could have a material adverse
effect on our business.
Auto companies often experience delays in the design, manufacture and commercial release of new vehicle models. We are
planning 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 affected as we may fail to grow our market share. We also plan to periodically perform facelifts or refresh
existing models, which could also be subject to delays. Furthermore, we rely on third-party suppliers for the provision and development
of many of the key components and materials used in our vehicles. To the extent our suppliers experience any delays in providing us with
or developing necessary components, we could experience delays in delivering on our timelines. Any delay in the manufacture or launch
of our current or future vehicle models, including in the build-out of the manufacturing facilities in China for these models or due to any
other factors, or in refreshing or performing facelifts to existing models, could subject us to customer complaints and materially and
adversely affect our reputation, demand for our vehicles, results of operations and growth prospects.
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We may face challenges providing our power solutions.
We provide our users with comprehensive power solutions. We install home chargers for users upon our users’ requests where
practicable, and provide other solutions, including battery swapping, supercharging, charging through publicly accessible charging
infrastructure and charging using our fast-charging vans. Our users are able to use our One Click for Power valet charging service where
their vehicles are picked up, charged and then returned. For each of our vehicle models, we currently offer two battery options: (i) the 70
kWh and 75 kWh battery, or the Standard Range Battery; (ii) the 100 kWh battery, or the Long Range Battery. In January 2021, we
announced the 150 kWh battery, or the Ultra-long Range Battery, with the next generation battery technology. We expect to deliver the
Ultra-long Range Battery in 2023. We have experienced delay in delivering our power solutions in the past, and we cannot assure you
that such delay will not occur again in the future.
We have very limited experience in the actual provision of our power solutions to users and providing these services is subject
to 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 risk of damage to vehicles during One Click for
Power valet services and the potential for lack of user acceptance of our services. In addition, although the Chinese government has
supported the roll-out of a public charging network, the current number of charging infrastructures is generally considered to be
insufficient. 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 permits
and land use rights and complete any required filings, and whether the government support in this area may discontinue.
Furthermore, given our limited experience in providing power solutions, there could be unanticipated challenges which may
hinder our ability to provide our solutions or make the provision of our solutions costlier than anticipated. To the extent we are unable to
meet user expectations or experience difficulties in providing our power solutions, our reputation and business may be materially and
adversely affected.
Our services may not be generally accepted by our users. If we are unable to provide good customer service, our business and
reputation may be materially and adversely affected.
We aim to provide users with a good customer service experience, including by providing our users with access to a full suite of
services conveniently through our mobile application and vehicle applications. In addition, we seek to engage with our users on an
ongoing basis using online and offline channels, in ways which are non-traditional for automakers. We are also expanding our service
scope to meet our users’ evolving demands. For example, in January 2021, we launched NIO Certified, our official used car business,
where our users can sell their NIO vehicles to us and we will resell them for value. We have established a nationwide used vehicle
business network, covering services including vehicle inspection, evaluation, acquisition and sales. In addition, we have also started to
offer auto financing arrangements to our users directly through our subsidiary, NIO Financial Leasing Co., Ltd., in late 2020. New
service offerings will subject us to unknown risks. We cannot assure you that our services, including our service package and energy
package, our power solution services, our used car service, our auto financing services or our efforts to engage with our users using both
our online and 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 third parties certified by us. Although such servicing partners may have
experience in servicing other vehicles, we and such partners have very limited experience in servicing our vehicles. Servicing electric
vehicles is different from servicing ICE vehicles and requires specialized skills, including high voltage training and servicing techniques.
There can be no assurance that our service arrangements will adequately address the service requirements of our users to their
satisfaction, or that we and our partners will have sufficient resources to meet these service requirements in a timely manner as the
volume 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.
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We have received only a limited number of reservations for our vehicles, all of which are subject to cancellation.
Reservations for our vehicles are subject to cancellation by the customer until delivery of the vehicle. We have experienced
cancellations in the past. While we require a deposit of less than 2.0% of the manufacturer’s suggested retail price, or the MSRP, such
deposit becomes non-refundable after a certain period of time upon which the reservation will be automatically confirmed.
Notwithstanding the non-refundable deposit, our users may still cancel their reservations for many reasons outside of our control. The
potentially long wait from the time a reservation is made until the time the vehicle is delivered could also impact user decisions on
whether to ultimately make a purchase, due to potential changes in preferences, competitive developments and other factors. If we
encounter delays in the delivery our current or future vehicle models, we believe that a significant number of reservations may be
cancelled. As a result, no assurance can be made that reservations will not be cancelled and will ultimately result in the final purchase,
delivery, and sale of the vehicle. Such cancellations could harm our financial condition, business, prospects and operating results.
The automotive market is highly competitive, and we may not be successful in competing in this industry.
The automotive market is highly competitive and we expect it will become more competitive in the future as additional players
enter into this market. We compete with ICE vehicles as well as new energy vehicles. Many of our current and potential competitors,
particularly international competitors, have significantly greater financial, technical, manufacturing, marketing and other resources than
we do and may be able to devote greater resources to the design, development, manufacturing, promotion, sale and support of their
products. We expect competition in our industry to intensify in the future in light of increased demand and regulatory push for alternative
fuel vehicles, continuing globalization and consolidation in the worldwide automotive industry. Factors affecting competition include,
among others, product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service
and financing terms. Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in downward
price pressure and adversely affect our business, financial condition, operating results and prospects. Our ability to successfully compete
in our industry will be fundamental to our future success in existing and new markets and our market share. There can be no assurance
that we will be able to compete successfully in our markets. If our competitors introduce new vehicles or services that successfully
compete with or surpass the quality or performance of our vehicles or services at more competitive prices, we may be unable to satisfy
existing customers or attract new customers at the price levels that would allow us to generate attractive rates of return on our
investment.
Furthermore, our competitive advantage as the company with the first-to-market and leading EV volume-manufactured
domestically in China will be severely compromised if our competitors begin making deliveries earlier than expected, or offer more
favorable price than we do.
We may also be affected by the growth of the overall China automotive market. There have been fluctuations in the retail sales
of the passenger vehicles in China in recent years. If the demand for automobiles in China decreases, our business, results of operations
and financial condition could be materially adversely affected.
We may face challenges in expanding our business and operations internationally and our ability to conduct business in international
markets may be adversely affected by legal, regulatory, political and economic risks.
We face challenges and risks associated with expanding our business and operations globally into new geographic markets. For
example, following our entry into the Norwegian market in 2021, we announced our provision of products and services for Germany, the
Netherlands, Denmark, and Sweden in October 2022. New geographic markets may have competitive conditions, user preferences, and
discretionary spending patterns that are more difficult to predict or satisfy than our existing markets. In certain markets, we have
relatively little operating experience and may not benefit from any first-to-market advantages or otherwise succeed. We may also face
protectionist policies that could, among other things, hinder our ability to execute our business strategies and put us at a competitive
disadvantage relative to domestic companies. Local companies may have a substantial competitive advantage because of their greater
understanding of, and focus on, the local users, as well as their more established local brand names, requiring us to build brand
awareness in that market through greater investments in advertising and promotional activity. International expansion may also require
significant capital investment, which could strain our resources and adversely impact current performance, while adding complexity to
our current operations. We are subject to PRC law in addition to the laws of the foreign countries in which we operate. If any of our
overseas operations, or our associates or agents, violate such laws, we could become subject to sanctions or other penalties, which could
negatively affect our reputation, business and operating results.
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In addition, we may face operational issues that could have a material adverse effect on our reputation, business and results of
operations, if we fail to address certain factors including, but not limited to, the following:
● lack 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 talents with international perspectives who can effectively manage and operate local
businesses;
● challenges in identifying appropriate local business partners and establishing and maintaining good working relationships
with them;
● availability, reliability and security of international payment systems and logistics infrastructure;
● challenges of maintaining efficient and consolidated internal systems, including technology infrastructure, and of achieving
customization 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 environments different from that of
China;
● national security policies that restrict our ability to utilize technologies that are deemed by local governmental regulators to
pose a threat to their national security;
● the need for increased resources to manage regulatory compliance across our international businesses;
● 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 other trade barriers or
restrictions related compliance obligations and consequences of non-compliance, and any new developments in these areas;
● business licensing or certification requirements of the local markets;
● challenges in the implementation of BaaS and other innovative business 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 or
trade disputes, war and terrorism; and
● significant capital required for entering into new geographical markets, including cost of promoting NIO brand 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 overseas
as well as materially and adversely affect our business, financial condition and results of operations.
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We face challenges in developing our subscription business and leasing programs in the new markets, and our vehicles used for our
subscription may be stolen, damaged or destroyed before being returned to us, or our car leasing partners may run into operational
difficulties, which could negatively impact our business, financial condition, results of operations and prospectus.
We began to offer subscription offerings in Germany, the Netherlands, Denmark and Sweden starting from October 2022, which
requires significant capital. We may incur losses or otherwise fail to introduce the service successfully. For example, we may incur
insufficient utilization rate of our fleets under the subscription offering and therefore only generate lower-than-expected revenue. We also
face risks in connection with the expansion of our customer base in Europe through our subscription offering. For example, customers of
our vehicle subscription may have a higher-than-expected rate of default due to macroeconomic factors or if we fail to correctly assess
their creditworthiness, which would result in increased costs incurred by our company.
In addition, we cooperate with partners in European market who engage in car leasing business. We sell vehicles to the car
leasing partners who will then lease the cars purchased from us to the end customers. As such customers would use NIO vehicles and
enjoy certain NIO services, such as using NIO app and entering into NIO House, if our car leasing partners run into any operational
difficulties, our users’ experience may be negatively affected, our brand name could be compromised.
Furthermore, given that our vehicles are typically stored in unroofed parking lots under the vehicle subscription offering, force
majeure events such as flooding, fires or hail may affect a large number of our vehicles. This type of parking lot also has an increased
risk of theft or vandalism. Such events may cause us to incur large, uninsured damages, deprive us of a significant portion of our
inventory and reduce customer satisfaction if we cannot deliver subscribed vehicles. In addition, vehicles provided to customers under
our vehicle subscription service may be stolen, damaged or destroyed before being returned to us. While we carry insurance for our
vehicles, the insurance coverage may not be sufficient.
As of December 31, 2022, our subscription business and leasing programs were not material. However, with the expansion of
the subscription business and leasing programs in the future, any of the foregoing could have a material adverse effect on our business,
financial condition, results of operations and prospects.
We are subject to the risk of a decrease in the residual value of used vehicles under our subscription offering.
As the actual owner of the vehicles under the subscription offering, we are exposed to the risk that the subscription value of our
existing vehicles could decrease after new vehicle models are released, which will reduce our asset value. We are also exposed to the risk
that the market value of the vehicles returned at the end of the relevant subscription term may be lower than the calculated residual value
at the time the relevant subscription contract was entered into, which may in turn increases the likelihood that the future subscription
price for the returned vehicle turns out to be lower than expected. A decline in the value of used vehicles can be caused by a broad range
of external factors affecting the vehicle market, including adverse changes in customer confidence and preferences, economic conditions,
government policies, exchange rates, marketing programs, price pressure in the new vehicle, the actual or perceived safety or reliability
of vehicles, the price of raw materials regained from recycling or scrapping, or technological developments.
Uncertainties may also exist regarding the internal methods for calculating residual values. Although we continuously employ
residual value models and monitor used vehicle prices, demand and supply trends and other factors to forecast residual values, the
assumptions on which residual value assessments are based may prove to be incorrect. In addition, in the case that actual residual values,
due to changes in market or regulatory conditions, turn out to be lower than the amounts calculated for our subscription pricing,
provisions for residual value risk may be insufficient. Similarly, if the market value of the used cars decreases, we may have to record
write-downs beyond its existing reserves for used vehicle inventory risk. Finally, a significant decrease in the value of used vehicles may
create pricing pressure for our new car business if customers are not willing to pay significantly higher prices in monthly subscription
payments as a consequence of decreased residual values.
As a result of the above factors, with the expansion of the subscription business in the future, if the market value of the used
vehicles under our subscription service is significantly below our estimate, it may have a material adverse effect on our business, assets,
results of operations, financial condition and prospects.
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Our industry and its technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative
technologies or improvements in the internal combustion engine may materially and adversely affect the demand for our electric
vehicles.
We operate in China’s electric vehicle market, which is rapidly evolving and may not develop as we anticipate. We face
unanticipated risks such as the increase of lithium price, which may reduce the demand of battery electric vehicle and negatively impact
on our business. Also, the regulatory framework governing the industry is currently uncertain and may remain uncertain for the
foreseeable future. As our industry and our business develop, we may need to modify our business model or change our services and
solutions. These changes may not achieve expected results, which could have a material adverse effect on our results of operations and
prospects.
Furthermore, we may be unable to keep up with changes in electric vehicle technology and, as a result, our competitiveness may
suffer. Our research and development efforts may not be sufficient to adapt to changes in electric vehicle technology. As technologies
change, we plan to upgrade or adapt our vehicles and introduce new models in order to provide vehicles with the latest technology, in
particular digital technologies, which could involve substantial costs and lower our return on investment for existing vehicles. There can
be no assurance that we will be able to compete effectively with alternative vehicles or source and integrate the latest technology into our
vehicles, against the backdrop of our rapidly evolving industry. Even if we are able to keep pace with changes in technology and develop
new models, our prior models could become obsolete more quickly than expected, potentially reducing our return on investment.
Developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or
improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in
ways we do not currently anticipate. For example, fuel which is abundant and relatively inexpensive in China, such as compressed
natural gas, may emerge as consumers’ preferred alternative to petroleum based propulsion. Any failure by us to successfully react to
changes in existing technologies could materially harm our competitive position and growth prospects.
We may be unable to adequately control the costs associated with our operations.
We have required significant capital to develop and grow our business, including entering into more markets, developing our
products as well as building our brands. We expect to incur significant costs which will impact our profitability, including research and
development expenses as we roll out new models and improve existing models, raw material procurement costs and selling and
distribution expenses as we build our brand and market our vehicles. In addition, we may incur significant costs in connection with our
services, including providing power solutions and honoring our commitments under our service package. Our ability to become
profitable in the future will not only depend on our ability to successfully market our vehicles and other products and services but also to
control our costs. If we are unable to cost efficiently design, manufacture, market, sell and distribute and service our vehicles and
services, our margins, profitability and prospects will be materially and adversely affected.
We could experience cost increases or disruptions in supply of raw materials or other components used in our vehicles.
We incur significant costs related to procuring raw materials required to manufacture and assemble our vehicles. We use various
raw materials in our vehicles including aluminum, steel, carbon fiber, non-ferrous metals such as copper, lithium, nickel as well as cobalt.
The prices for these raw materials fluctuate depending on factors beyond our control, including market conditions and global demand for
these materials, and could adversely affect our business and operating results. Our business also depends on the continued supply of
batteries for our vehicles. Battery manufacturers may refuse to supply electric vehicle manufacturers to the extent they determine that the
vehicles are not sufficiently safe. We are exposed to multiple risks relating to availability and pricing of quality lithium-ion battery cells.
These risks include:
● the inability or unwillingness of current battery manufacturers to build or operate battery manufacturing plants to supply
the numbers of lithium-ion cells required to support the growth of the electric or plug-in hybrid vehicle industry as demand
for such cells increases;
● disruption in the supply of cells due to quality issues or recalls by the battery manufacturers; and
● an increase in the cost of raw materials, such as lithium, nickel and cobalt, used in lithium-ion cells.
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In the long term, we intend to supplement cells from our suppliers with cells manufactured by us, which are customized to meet
our specific requirements. However, our efforts to develop and manufacture such battery cells have required, and may continue to
require, significant investments, and there can be no assurance that we will always be able to achieve these targets in the timeframes that
we have planned or at all. If we are unable to do so, we may have to curtail our planned vehicle production or procure additional cells
from suppliers at potentially greater costs, either of which may harm our business and operating results.
Furthermore, currency fluctuations, tariffs or shortages in petroleum and other economic or political conditions may result in
significant increases in freight charges and raw material costs. Substantial increases in the prices for our raw materials or components
would increase our operating costs, and could reduce our margins. In addition, a growth in popularity of electric vehicles without a
significant expansion in battery production capacity could result in shortages which would result in increased costs in raw materials to us
or impact of prospects.
We are dependent on our suppliers, 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 single
source suppliers for these components, and we expect that this will be similar for any future vehicle we may produce. The supply chain
exposes us to multiple potential sources of delivery failure or component shortages. While we obtain components from multiple sources
whenever possible, similar to other players in our industry, many of the components used in our vehicles are purchased by us from a
single source. To date, we have not qualified alternative sources for most of the single sourced components used in our vehicles and we
do not maintain long-term agreements with some of our single source suppliers.
Furthermore, qualifying 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 supply of components, whether or not from a single source
supplier, could temporarily disrupt the production of our vehicles until an alternative supplier is fully qualified by us or is otherwise able
to supply us with the required material. There can be no assurance that we would be able to successfully retain alternative suppliers or
supplies on a timely basis, on acceptable terms or at all. Changes in business conditions, 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 of semiconductor chips had negatively impacted our production activity and volume, as a result of
which, we temporarily suspended the vehicle production activity in the F1 Plant for five working days starting from March 29, 2021. In
May 2021, our vehicle delivery was adversely impacted for several days due to the volatility of semiconductor supply and certain
logistical adjustments. In April 2022, we suspended our vehicle production as a result of the component shortages. In July 2022, the
production of our ET7 and EC6 was constrained by the short supply of casting parts. In addition, the COVID-19 pandemic has brought
substantial supply chain volatilities relating to the components that are essential to our vehicle production. Although the reduced
production volume and number of vehicles delivered as a result of supply chain volatilities have not had a material impact on our
liquidity and capital resources, our results of operations in these periods have been negatively affected. See “Item 3. Key Information —
D. Risk Factors — Risks Related to Our Business and Industry —Our business, financial condition and results of operations may be
adversely affected by the COVID-19 pandemic.” 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. In addition, even if we succeed in locating alternative sources of supply, cooperating with new suppliers will subject
us to uncertainties with respect to the reliability of these suppliers and the quality of the components they provide. We cannot assure you
that the new sources of component supply will enable us to meet the quality, price, design, engineering, and production standards, as well
as the production volumes to satisfy the market demand for our vehicles. Any defects of or quality issues with these components or any
noncompliance incidents associated with these third-party suppliers could result in quality issues with our vehicles and hence
compromise our brand image and results of operations. Any of the foregoing could materially and adversely affect our results of
operations, financial condition and prospects.
We rely on Battery Asset Company to work together with us to provide Battery as a Service to our users. If Battery Asset Company
fails to achieve smooth and stable operations, our Battery as a Service and reputation 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 and
subscribe for the usage of batteries separately. If users opt to purchase a vehicle and subscribe for the battery under the BaaS, they can
enjoy a deduction off the original vehicle purchase price and pay a monthly subscription fee for the battery.
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For each user under the BaaS model, we sell a battery to Wuhan Weineng Battery Asset Co., Ltd., or the Battery Asset
Company, and the user subscribes for the usage of the battery from the Battery Asset Company. The service we provide to our users
under 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 invested 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 annual
report. We and the Initial BaaS Investors each invested RMB200 million and held 25% equity interests in the Battery Asset Company at
its establishment. In December 2020, April 2021, August 2021 and July 2022, respectively, the Battery Asset Company entered into
agreements with new and existing investors for additional financing. We refer to the Initial BaaS Investors together with the other
investors of the Battery Asset Company that subsequently joined as the Battery Asset Company Investors. As of the date of this annual
report, we beneficially own approximately 19.4% of the equity interests in the Battery Asset Company. As a result, we only have limited
control over the business operations of the Battery Asset Company. If it fails in delivering smooth and stable operations, we will suffer
from negative customer reviews and even returns of products or services and our reputation may be materially and adversely affected.
Additionally, given that we generate a portion of our total revenues from sales of battery purchases and provision of service to
the Battery Asset Company, our results of operations and financial performance will be negatively affected if the Battery Asset Company
fails to operate smoothly. The Battery Asset Company may finance the purchase of batteries through issuance of equity and debt or bank
borrowing. If the Battery Asset Company is unable to obtain future financings from the Battery Asset Company Investors or other third
parties to meet its operational needs, it may not be able to make payments to us for the batteries purchased from us on time, to continue
purchasing batteries from us and providing them to our users through battery subscription, or to otherwise maintain its healthy and
sustainable operations. On the other hand, if the Battery Asset Company bears a significant rate of customer default on its payment
obligations, its results of operations and financial performance may be materially impacted, which will in turn reduce the value of our
and the Battery Asset Company Investors’ investments in the Battery Asset Company. In addition, in furtherance of the BaaS, we agreed
to provide guarantee to the Battery Asset Company for the default in payment of monthly subscription fees from users, while the
maximum amount of guarantee that can be claimed shall not be higher than the accumulated service fees we receive from the Battery
Asset Company. As the BaaS user base is expanding, if an increased number of default occurs, our results of operations and financial
performance will be negatively affected. As of December 31, 2022, the guarantee liability we provided to Battery Asset Company was
immaterial.
Our business is subject to a variety of laws, regulations, rules, policies and other obligations regarding cybersecurity, privacy, data
protection and information security. Any failure to comply with these laws, regulations and other obligations or any losses,
unauthorized access or releases of confidential information or personal data could subject us to significant reputational, financial,
legal and operational consequences.
We face significant challenges with respect to information security and privacy, including the storage, transmission and sharing
of confidential information. We use our vehicles’ electronic systems to log information about each vehicle’s use, such as charge time,
battery usage, mileage and driving behavior, in order to aid us in vehicle diagnostics, repair and maintenance, as well as to help us
customize and optimize the driving and riding experience. Our users may object to the use of this data, which may hinder our capabilities
in conducting our business. We also transmit and store certain confidential and private information of our vehicle buyers, including
certain personal information such as names, accounts, user IDs and passwords, and payment or transaction related information.
Collection, transmission, possession and use of our user’s data in conducting our business may subject us to legislative and regulatory
burdens in China and other jurisdictions that could require notification of any data breach, restrict our use of such information and hinder
our ability to acquire new customers or market to existing customers.
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We are required by PRC law to ensure the confidentiality, integrity, availability and authenticity of the information of our
customers, which is also essential to maintaining their confidence in our vehicles and services. We have adopted strict information
security policies and deployed advanced measures to implement the policies, including, among others, advanced encryption technologies.
However, advances in technology, an increased level of sophistication and diversity of our products and services, an increased level of
expertise of hackers, new discoveries in the field of cryptography or others can still result in a compromise or breach of the measures that
we use. If we are unable to protect our systems, and hence the information stored in our systems, from unauthorized access, use,
disclosure, disruption, modification or destruction, such problems or security breaches could cause a loss, give rise to our liabilities to the
owners of confidential information or even subject us to fines and penalties. If users allege that we have improperly collected, used,
transmitted, released or disclosed their personal information, we could face legal claims and reputational damage. In addition, we may
incur significant expenses to comply with privacy, consumer protection and security standards and protocols imposed by laws,
regulations, industry standards or contractual obligations, some of which may not be compatible with our existing business practice. If
third parties improperly obtain and use the personal information of our users, we may be required to expend significant resources to
resolve these problems. In December 2022, we were made aware that certain user information and vehicle sales information in China
before August 2021 was for sale on the internet by third parties for illegal purposes. We followed the PRC legal requirements on data
leakage incident settlement, and also issued a public statement in China related to the incident, including providing a dedicated hotline
and an email address to respond to user queries regarding the data leakage. We have also undertaken the responsibilities for the loss that
the users may incur, if any, in connection with the data leakage. As of the date of this annual report, we were not aware of significant
issues related to the security of our electronic systems nor did we receive any claims from users.
In general, we expect that data security and data protection compliance will receive greater attention and focus from regulators,
both domestically and globally, as well as attract continued or greater public scrutiny and attention going forward, which could increase
our compliance costs and subject us to heightened risks and challenges associated with data security and protection. Significant capital
and other resources may be required to protect against information security breaches or to alleviate problems caused by such breaches or
to comply with our privacy policies or privacy-related legal obligations. The resources required may increase over time as the methods
used by hackers and others engaged in online criminal activities are increasingly sophisticated and constantly evolving. Any failure or
perceived failure by us to prevent information security breaches or to comply with privacy policies or privacy-related legal requirements,
or any security breach that results in the unauthorized release or transfer of personally identifiable information or other customer data,
could cause our customers to lose trust in us and could expose us to legal claims. Any perception by the public that online transactions or
the privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of online retail and
other online services generally, which may reduce the number of orders we receive.
The PRC regulatory and enforcement regime with regard to data security and data protection is evolving and may be subject to
different interpretations or significant changes. Moreover, different PRC regulatory bodies, including the Standing Committee of the
National People’s Congress of China, or the SCNPC, the MIIT, the CAC, the Ministry of Public Security, or the MPS, and the State
Administration for Market Regulation, or the SAMR, have enforced data privacy and protections laws and regulations with varying
standards and applications. See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Internet
Information Security and Privacy Protection.” The following are examples of certain recent PRC regulatory activities in this area:
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Data Security
In June 2021, the SCNPC promulgated the Data Security Law, which took effect in September 2021. The Data Security Law,
among other things, provides for security review procedure for data-related activities that may affect national security. In July 2021, the
State Council of the PRC promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure, which
became effective on September 1, 2021. Pursuant to this regulation, critical information infrastructure means key network facilities or
information systems of critical industries or sectors, such as public communication and information service, energy, transportation, water
conservation, finance, public services, e-government affairs and national defence science, the damage, malfunction or data leakage of
which may endanger national security, people’s livelihoods and the public interest. In December 2021, the CAC, together with other
authorities, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022 and replaces its
predecessor regulation. Pursuant to the Cybersecurity Review Measures, critical information infrastructure operators that procure internet
products and services and network platform operators that conduct data process activities must be subject to the cybersecurity review if
their activities affect or may affect national security. The Cybersecurity Review Measures further stipulates that network platform
operators that hold personal information of over one million users shall apply with the Cybersecurity Review Office for a cybersecurity
review before any public offering at a foreign stock exchange. Relevant PRC governmental authorities may also initiate cybersecurity
review if they determine certain network products, services, or data processing activities affect or may affect national security. As of the
date of this annual report, no detailed rules or implementation rules have been issued by any authority and we have not been informed
that we are a critical information infrastructure operator by any government authorities. Furthermore, the scope of “network products or
services or data processing activities that will or may affect national security” and the scope of operators of “critical information
infrastructure” remains unclear, and the PRC government authorities may have wide discretion in the interpretation and enforcement of
the applicable laws.
In November 2021, the CAC released the Administration Regulations on the Cyber Data Security (Draft for Comments), or the
Draft Regulations. The Draft Regulations provide that data processors refer to individuals or organizations that, during their data
processing activities such as data collection, storage, utilization, transmission, publication and deletion, have autonomy over the purpose
and the manner of data processing. In accordance with the Draft Regulations, data processors shall apply for a cybersecurity review for
certain activities, including, among other things, (i) the listing abroad of data processors that process the personal information of more
than one million users and (ii) any data processing activity that affects or may affect national security. However, there have been no
clarifications from the relevant authorities as of the date of this annual report as to the standards for determining whether an activity is
one that “affects or may affect national security.” In addition, the Draft Regulations requires that data processors that process “important
data” or are listed overseas must conduct an annual data security assessment by itself or commission a data security service provider to
do so, and submit the assessment report of the preceding year to the municipal cybersecurity department by the end of January each year.
As of the date of this annual report, there is no definitive timetable as to when the Draft Regulations will be enacted.
In 2021, the PRC government initiated cybersecurity reviews against a number of mobile applications operated by several US-
listed Chinese companies and prohibited relevant applications from registering new users during the review period. We expect that
cybersecurity and data protection issues will receive greater and continued attention and scrutiny from regulators and the public going
forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security and
protection, as well as negative publicity. If the Cybersecurity Review Measures and the enacted version of the Draft Regulations mandate
clearance of cybersecurity review and other specific actions to be taken by overseas listed companies like us, we face uncertainties as to
whether these additional procedures can be completed by us timely, or at all, which may subject us to government enforcement actions
and investigations, fines, penalties, revocation of the required licenses, suspension of our non-compliant operations, or removal of our
mobile application from the relevant application stores, and materially and adversely affect our business and results of operations. As of
the date of this annual report, we have not been involved in any formal investigations on cybersecurity review made by the CAC on such
basis.
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Personal Information and Privacy
In August 2021, the SCNPC promulgated the Personal Information Protection Law, which integrates the scattered rules with
respect to personal information rights and privacy protection and took effect on November 1, 2021. We update our policies and binding
contracts related to personal data and cybersecurity protection from time to time to meet the latest regulatory requirements of applicable
PRC laws and regulations, and adopt technical measures to protect such data and ensure cybersecurity in a systematic manner.
Nonetheless, the Personal Information Protection Law elevates the protection requirements for personal information processing, and
many specific requirements of this law remain to be clarified by the CAC, other regulatory authorities, and courts in practice. In addition,
on August 16, 2021, the CAC, the NDRC, the MPS, the MIIT and the Ministry of Transport jointly promulgated the Several Provisions
on Automobile Data Security Management (Trial Implementation), which impose a series of additional personal information and data
security protection obligations on automobile data processors like us, including, among other things, (i) in-car processing of automobile
data in principle, (ii) enhanced notification and consent requirements, (iii) enhanced individual control over their automobile personal
information, and (iv) submitting annual report for processing automobile important data. We may be required to make further
adjustments to our business practices to comply with the personal information and data protection laws and regulations.
Many of the data-related legislations are relatively new and certain concepts thereunder remain subject to interpretation by the
regulators. In general, compliance with the existing PRC laws and regulations, as well as additional laws and regulations that PRC
regulatory bodies may enact in the future, related to data security and personal information protection, may be costly and result in
additional expenses to us, and subject us to negative publicity, which could harm our reputation and business operations. There are also
uncertainties with respect to how such laws and regulations will be implemented and interpreted in practice.
In addition, regulatory authorities in the U.S., Europe and elsewhere around the world have adopted or are considering a number
of legislative and regulatory proposals concerning data protection. These legislative and regulatory proposals, if adopted, and the
uncertain interpretations and application thereof could, in addition to the possibility of fines, result in an order requiring that we change
our data practices and policies, which could have an adverse effect on our business and results of operations. For example, the European
Union adopted the European Union General Data Protection Regulation, or the GDPR, which came into effect on May 25, 2018. The
GDPR includes operational requirements for companies that receive or process personal data of residents of the European Economic
Area, and establishes new requirements applicable to the processing of personal data, affords new data protection rights to individuals
and imposes penalties for serious data breaches. Individuals also have a right to compensation under the GDPR for financial or non-
financial losses. As we offer our products and services in European market, we are subject to provisions of the GDPR.
Our business and prospects depend significantly on our ability to build our NIO brand. We may not succeed in continuing to
establish, maintain and strengthen the NIO brand, and our brand and reputation could be harmed by negative publicity regarding
our company or products.
Our business and prospects are heavily dependent on our ability to develop, maintain and strengthen the “NIO” brand. If we do
not continue to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers.
Promoting and positioning our brand will likely depend significantly on our ability to provide high quality vehicles and services and
engage with our customers as intended and we have limited experience in these areas. In addition, we expect that our ability to develop,
maintain and strengthen the NIO brand will depend heavily on the success of our user development and branding efforts. Such efforts
mainly include building a community of online and offline users engaged with us through our mobile application, NIO Houses, NIO
Spaces as well as other branding initiatives such as our annual NIO Day and other events. Such efforts may be non-traditional and may
not achieve the desired results. To promote our brand, we may be required to change our user development and branding practices, which
could result in substantially increased expenses, including the need to use traditional media such as television, radio and print. If we do
not develop and maintain a strong brand, our business, prospects, financial condition and operating results will be materially and
adversely impacted.
In addition, if incidents occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject
to adverse publicity. In particular, given the popularity of social media, including WeChat/Weixin in China, any negative publicity,
whether true or not, could quickly proliferate and harm consumer perceptions and confidence in our brand. Furthermore, there is the risk
of potential adverse publicity related to our manufacturing and other partners, such as JAC and NIO Capital, whether or not such
publicity related to their collaboration with us. Our ability to successfully position our brand could also be adversely affected by
perceptions about the quality of JAC’s vehicles.
In addition, from time to time, our vehicles are evaluated and reviewed by third parties. Any negative reviews or reviews which
compare us unfavorably to competitors could adversely affect consumer perception about our vehicles.
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Our business depends substantially on the continuing efforts of our executive officers, key employees and qualified personnel, and
our operations may be severely disrupted if we lose their services.
Our success depends substantially on the continued efforts of our executive officers and key employees. If one or more of our
executive officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them
easily, in a timely manner, or at all. As we build our brand and become more well-known, the risk that competitors or other companies
may poach our talent increases. Our industry is characterized by high demand and intense competition for talent and therefore we cannot
assure you that we will be able to attract or retain qualified staff or other highly skilled employees. In addition, because our electric
vehicles are based on a different technology platform than traditional ICE vehicles, individuals with sufficient training in electric vehicles
may not be available to hire, and we will need to expend significant time and expense training the employees we hire. We also require
sufficient talent in areas such as software development. Furthermore, as our company is relatively young, our ability to train and integrate
new employees into our operations may not meet the growing demands of our business, which may materially and adversely affect our
ability to grow our business and our results of operations.
If any of our executive officers and key employees terminates his or her services with us, our business may be severely
disrupted, our financial condition and results of operations may be materially and adversely affected and we may incur additional
expenses to recruit, train and retain qualified personnel. We have not obtained any “key person” insurance on our key personnel. If any of
our executive officers or key employees joins a competitor or forms a competing company, we may lose customers, know-how and key
professionals and staff members. To the extent permitted by laws, each of our executive officers and key employees has entered into an
employment agreement and a non-compete agreement with us. However, if any dispute arises between our executive officers or key
employees and us, the non-competition provisions contained in their non-compete agreements may not be enforceable, especially in
China, where these executive officers reside, on the ground that we have not provided adequate compensation to them for their non-
competition obligations, which is required under relevant PRC laws.
Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt, electric vehicles.
Demand for automobile sales depends to a large extent on economic, political and social conditions in a given market and the
introduction of new vehicles and technologies. As our business grows, economic conditions and trends will impact our business,
prospects and operating results as well.
Demand for our electric vehicles may also be affected by factors directly impacting automobile prices or the cost of purchasing
and operating automobiles, such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and
governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales,
which may result in further downward price pressure and adversely affect our business, prospects, financial condition and operating
results.
In addition, the demand for our vehicles and services will highly depend upon the adoption by consumers of new energy
vehicles in general and electric vehicles in particular. The market for new energy vehicles is still rapidly evolving, characterized by
rapidly changing technologies, evolving government regulation and industry standards and changing consumer demands and behaviors.
Other factors that may influence the adoption of alternative fuel vehicles, and specifically electric vehicles, include:
● perceptions about electric vehicle quality, safety, design, performance and cost, especially if adverse events or accidents
occur that are linked to the quality or safety of electric vehicles, whether or not such vehicles are produced by us or other
companies;
● perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced
technology;
● the limited range over which electric vehicles may be driven on a single battery charge and the speed at which batteries can
be recharged;
● the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge;
● concerns about electric grid capacity and reliability;
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● the availability of new energy vehicles, including plug-in hybrid electric vehicles;
● improvements in the fuel economy of the internal combustion engine;
● the availability of service for electric vehicles;
● the environmental consciousness of consumers;
● access to charging stations, standardization of electric vehicle charging systems and consumers’ perceptions about
convenience and cost to charge an electric vehicle;
● the availability of tax and other governmental incentives to purchase and operate electric vehicles or future regulation
requiring increased use of nonpolluting vehicles;
● perceptions about and the actual cost of alternative fuel; and
● macroeconomic factors.
Any of the factors described above may cause current or potential customers not to purchase our electric vehicles and use our
services. If the market for electric vehicles does not develop as we expect or develops more slowly than we expect, our business,
prospects, financial condition and operating results will be affected.
We depend on revenue generated from a limited number of models, and in the foreseeable future will be significantly dependent on a
limited number of models.
Our business currently depends substantially on the sales and success of a limited number of models that we have launched,
including the ES8, the ES7 (or the EL7), the ES6, the EC7, the EC6, the ET7 and the ET5. Historically, automobile customers have come
to expect a variety of vehicle models offered in a company’s fleet and new and improved vehicle models to be introduced frequently. In
order to meet these expectations, we plan in the future to introduce new vehicle models as well as enhance versions of existing vehicle
models. To the extent our product variety and cycles do not meet consumer expectations, or cannot be produced on our projected
timelines and cost and volume targets, our future sales may be adversely affected. Given that for the foreseeable future our business will
depend on a limited number of models, to the extent a particular model is not well-received by the market, our sales volume could be
materially and adversely affected. This could have a material adverse effect on our business, prospects, financial condition and operating
results.
We are subject to risks related to customer credit.
We offer auto financing arrangements to users directly through our subsidiaries. Under the financing arrangements we typically
receive a small portion of the total vehicle purchase price at the commencement of the financing term, followed by a stream of payments
over the financing term. To the extent our users fail to make payments on time under any of the foregoing arrangements, our results of
operations may be adversely affected. As of December 31, 2022, the amount of auto financing receivables was RMB7,859.5 million
(US$1,139.5 million). As we continue to grow our business, we may increase the amount of our auto financing receivables. We may fail
to effectively manage the credit risks related to our auto financing arrangements. To the extent our users default on their obligations to us
or fail to make payments on time under any of the foregoing arrangements, our results of operations may be adversely affected.
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We may be exposed to credit risk of trade receivables.
Our trade receivables primarily include amounts of vehicle sales in relation of government subsidy to be collected from
government on behalf of customers, auto financing receivables, current portion of battery installment and receivables due from vehicle
users. We have identified the relevant risk characteristics of our customers and the related receivables, prepayments, deposits and other
receivables which include size, type of the services or the products we provide, or a combination of these characteristics. Receivables
with similar risk characteristics have been grouped into pools. For each pool, we consider the historical credit loss, current economic
conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other
key factors that influence the expected credit loss analysis include customer demographics, payment terms offered in the normal course
of business to customers, and industry-specific factors that could impact our receivables. Additionally, external data and macroeconomic
factors are also considered. In 2022, we recorded RMB48.7 million (US$7.1 million) expected credit loss expense in selling, general and
administrative expenses. As of December 31, 2022, the expected credit loss provision for the current and non-current assets were
RMB140.1 million (US$20.3 million). We cannot assure you that all of our customers will not default on their obligations to us in the
future, despite our efforts to conduct credit assessment on them.
We face inventory risks that, if not properly managed, could harm our financial condition, operating results, and prospects.
We are exposed to significant inventory risks that may adversely affect our operating results as a result of increased competition,
seasonality, new models launches, rapid changes in vehicle life cycles and pricing, defective vehicles, changes in consumer demand and
consumer spending patterns, and other factors. We endeavor to accurately predict these trends and avoid overstocking or understocking
issues. Demand for our vehicles, however, can change significantly between the time inventory or components are ordered and the date
of sale. We may misjudge customer demand, resulting in inventory buildup and possible significant inventory write-down. It may also
make it more difficult for us to inspect and control quality and ensure proper handling, storage and delivery. We may experience higher
return rates on new vehicles, receive more customer complaints about them and face costly product liability claims as a result of selling
them, which would harm our brand and reputation as well as our financial performance.
We might not be able to fulfil our obligation in respect of deferred revenue, which might have impact on our cash or liquidity
position.
Our recognition of deferred revenue is subject to future performance obligations, mainly including the transaction price
allocated to the performance obligations that are unsatisfied, or partially satisfied, which mainly arises from the undelivered home
chargers, the vehicle connectivity service, the extended warranty service, the points offered to customers as well as battery swapping
service embedded in the vehicle sales contract. We may have multiple performance obligations identified in the vehicle sales contract and
the sales of packages to transfer goods or services to a customer for which we have received consideration, or an amount of consideration
is due, from the customer, which is recorded as deferred revenue. Due to potential future changes in customer preferences and the need
for us to satisfactorily perform product support and other services, deferred revenue at any particular date may not be representative of
actual revenue for any current or future period. Any failure to fulfil the obligations in respect of deferred revenue may have an adverse
impact on our results of operations and liquidity.
Fluctuation of fair value change of short-term investments we made may affect our results of operations.
For the years ended December 31, 2020, 2021 and 2022, our short-term investments consisted primarily of investments in fixed
deposits with maturities between three months and one year and investments in money market funds and financial products issued by
banks. The methodologies that we use to assess the fair value of the short-term investment involve a significant degree of management
judgment and are inherently uncertain. In addition, we are exposed to credit risks in relation to our short-term investments, which may
adversely affect the net changes in their fair value. We cannot assure you that market conditions will create fair value gains on our short-
term investment or we will not incur any fair value losses on our short-term investment in the future. If we incur such fair value losses,
our results of operations, financial condition and prospects may be adversely affected.
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We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to
successfully defend or insure against such claims.
We may become subject to product liability claims, which could harm our business, prospects, operating results and financial
condition. The automotive industry experiences significant product liability claims and we face inherent risk of exposure to claims in the
event our vehicles do not perform as expected or malfunction resulting in property damage, personal injury or death. Our risks in this
area are particularly pronounced given we have limited field experience of our vehicles. In addition, we may be subject to product
liability claims for defective components and parts that are manufactured by our third-party partners. A successful product liability claim
against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative
publicity about our vehicles and business and inhibit or prevent commercialization of our future vehicle candidates which would have a
material adverse effect on our brand, business, prospects and operating results. Any insurance coverage might not be sufficient to cover
all potential product liability claims. Any lawsuit seeking significant monetary damages may have a material adverse effect on our
reputation, business and financial condition.
Our vehicles are subject to motor vehicle standards and the failure to satisfy such mandated safety standards would have a material
adverse effect on our business and operating results.
All vehicles sold must comply with various standards of the market where the vehicles were sold. In China, vehicles must meet
or exceed all mandated safety standards. Rigorous testing and the use of approved materials and equipment are among the requirements
for achieving such standards. Vehicles must pass various tests and undergo a certification process and be affixed with the CCC
certification, before receiving delivery from the factory, being sold, or being used in any commercial activity. In addition, the Access
Administration Opinion requires vehicles manufacturing enterprises to ensure the compliance of vehicle products with relevant laws,
regulations, technical standards and technical specification and file for record with the MIIT prior to over-the-air updates, and shall file
with the MIIT in the event of any change to the safety, energy saving, environment protection, anti-theft and other technical parameters
and shall ensure conformance by vehicle products and production. Without the approval, no over-the-air update shall be conducted to add
or update the autonomous driving function. Any delays or lags of the over-the-air updates due to the MIIT prior filing procedures may
materially and adversely affect our business and operating results. Furthermore, given we commenced delivery of our vehicles in
Norway, Germany, the Netherlands, Denmark, and Sweden, we are also subject to mandated safety standards in these markets. Failure by
us to have any of our current or future vehicle models satisfy motor vehicle standards or any new laws and regulations in China, Norway
or other markets where our vehicles are sold would have a material adverse effect on our business and operating results.
We may be subject to risks associated with autonomous driving technologies.
Through NIO Pilot and NAD, we provide an enhanced advanced driver assistance system, or ADAS, and plan to offer higher
levels of autonomous driving functionalities, and through our research and development, we continually update and improve our
autonomous driving technologies. Regulatory, safety and reliability issues, or the perception thereof, many of which are beyond our
control, could cause the public, our users or our potential business partners to lose confidence in autonomous driving solutions in general.
The safety of such technology depends in part on end users of vehicles equipped with ADAS and higher levels of automated driving
systems, as well as other drivers, pedestrians, other obstacles on the roadways or other unforeseen events. For example, there have been
traffic accidents involving vehicles equipped with ADASs, including our NIO vehicles. Even though the actual causes of such traffic
accidents may 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 other automated
driving systems, as well as regulatory investigations, recalls, systems or features modifications and related actions. In addition, to the
extent accidents associated with our ADAS and other automated driving systems (once launched) occur, we could be subject to liability,
government scrutiny and further regulation. Any of the foregoing could materially and adversely affect our results of operations,
financial condition and growth prospects.
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We may be compelled to undertake product recalls or take other actions, which could adversely affect our brand image and financial
performance.
Recalls of our vehicles can cause adverse publicity, damage to our brand and liability for costs. For example, in January 2023,
we voluntarily recalled 997 ET5 electric vehicles manufactured between September 7, 2022 and October 10, 2022 due to a potential
safety hazard in extreme cases of a serious frontal collision, which could be retrofitted by adding a high-strength insulating protective
cover. In the future, we may at various times, voluntarily or involuntarily, initiate a recall if any of our vehicles, including any systems or
parts sourced from our suppliers, prove to be defective or non-compliant with applicable laws and regulations. Such recalls, whether
voluntary or involuntary or caused by systems or components engineered or manufactured by us or our suppliers, could involve
significant expense and could adversely affect our brand image in our target markets, as well as our business, prospects, financial
condition and results of operations.
The long-term viability of our distribution model is unproven.
Our vehicles are generally made to order. We conduct vehicle sales directly to users primarily through our mobile application,
NIO Houses and NIO Spaces, rather than through dealerships. This model of vehicle distribution subjects us to substantial risk as it
requires, in the aggregate, significant expenditures and provides for slower expansion of our distribution and sales systems than may be
possible by utilizing the traditional dealer franchise system commonly applied for the sales of ICE vehicles and other EV companies. For
example, we will not be able to utilize long established sales channels developed through a franchise system to increase our sales
volume. Moreover, we will be competing with companies with well established distribution channels. Our success will depend in large
part on our ability to effectively develop our own sales channels and marketing strategies. Implementing our business model is subject to
numerous significant challenges, including obtaining permits and approvals from government authorities, and we may not be successful
in addressing these challenges.
In addition, the lead time in fulfilling our orders could lead to cancelled orders. Our aim for the fulfilling speed is 21 to 28 days
from the order placement date to delivery to users. If we are unable to achieve this target, our customer satisfaction could be adversely
affected, harming our business and reputation.
Our financial results may vary significantly from period to period due to the seasonality of our business and fluctuations in our
operating costs.
Our operating results may vary significantly from period to period due to many factors, including seasonal factors that may have
an effect on the demand for our electric vehicles. In the past few years, demand for new vehicles in the automotive industry were
generally higher in the fourth quarter. Such variation may or may not continue in the future. Our limited operating history makes it
difficult for us to judge the exact nature or extent of the seasonality of our business. Also, any unusually severe weather conditions in
some markets may impact demand for our vehicles. Our operating results could also suffer if we do not achieve revenue consistent with
our expectations for this seasonal demand because many of our expenses are based on anticipated levels of annual revenue.
We also expect our period-to-period operating results to vary based on our operating costs which may increase in future periods
as we, among other things, design, develop and manufacture our electric vehicles, build and equip new manufacturing facilities, open
new NIO Houses and NIO Spaces, and develop charging and swapping networks.
As a result of these factors, we believe that period-to-period comparisons of our operating results are not necessarily meaningful
and that these comparisons cannot be relied upon as indicators of future performance. Moreover, our operating results may not meet
expectations of equity research analysts or investors. If this occurs, the trading price of our ADSs could fall substantially either suddenly
or over time.
If our vehicle owners customize our vehicles or change the charging infrastructure with aftermarket products, the vehicle may not
operate properly, which may create negative publicity and could harm our business.
Automobile enthusiasts may seek to “hack” our vehicles to modify their performance which could compromise vehicle safety
systems. Also, customers may customize their vehicles with after-market parts that can compromise driver safety. We do not test, nor do
we endorse, such changes or products. In addition, the use of improper external cabling or unsafe charging outlets can expose our
customers to injury from high voltage electricity. Such unauthorized modifications could reduce the safety of our vehicles and any
injuries resulting from such modifications could result in adverse publicity which would negatively affect our brand and harm our
business, prospects, financial condition and operating results.
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We are subject to risks related to the investment in NIO China.
In February 2020, we entered into a collaboration framework agreement with the municipal government of Hefei, Anhui
province, where our manufacturing hub is located. Subsequently from April to June 2020, we entered into definitive agreements, as
amended and supplemented, or the Hefei Agreements, for investments in NIO China with a group of investors, which we refer to as the
Hefei Strategic Investors in this annual report. Under the Hefei Agreements, the Hefei Strategic Investors agreed to invest an aggregate
of RMB7 billion in cash into NIO Holding Co., Ltd. (previously known as NIO (Anhui) Holding Co., Ltd.), or NIO China, a legal entity
wholly owned by us pre-investment. We agreed to inject our core businesses and assets in China, including vehicle research and
development, supply chain, sales and services and NIO Power, or together as the Asset Consideration, valued at RMB 17.77 billion in
total, into NIO China, and invest RMB4.26 billion in cash into NIO China. For more information, see “Item 4. Information on the
Company—B. Business Overview—Certain Other Cooperation Arrangements—Hefei Strategic Investors” included elsewhere in this
annual report.
Pursuant to the Hefei Agreements, NIO China will establish its headquarters in the Hefei Economic and Technological
Development Area, or HETA, for its business operations, research and development, sales and services, supply chain and manufacturing
functions. We will collaborate with the Hefei Strategic Investors and HETA to develop NIO China’s business and to support the
accelerated development of the smart electric vehicle sectors in Hefei in the future.
Subsequent to the entry into the Hefei Agreements, the cash contribution obligations of us and the Hefei Strategic Investors
have all been fulfilled. In September 2020, we, through one of our wholly-owned subsidiaries, redeemed 8.612% equity interests in NIO
China from one of the Hefei Strategic Investors and subscribed for certain newly increased registered capital to increase our shareholding
in NIO China. In addition, in February 2021, we, through one of our wholly-owned subsidiaries, also purchased from two of the Hefei
Strategic Investors an aggregate of 3.305% equity interests in NIO China for a total consideration of RMB5.5 billion and subscribed for
newly increased registered capital of NIO China at a subscription price of RMB10.0 billion. In September 2021, we, through one of our
wholly-owned subsidiaries, purchased from a minority strategic investor of NIO China an aggregate of 1.418% equity interests in NIO
China for a total consideration of RMB2.5 billion and subscribed for newly increased registered capital of NIO China at a subscription
price of RMB7.5 billion. As a result of these transactions, as of the date of this annual report, the registered capital of NIO China is
RMB6.429 billion, and we held 92.114% controlling equity interests in NIO China. We have fulfilled all obligations due to be fulfilled
under the Hefei Agreements as of the date of this annual report.
In connection with this investment, NIO China granted certain minority shareholders’ rights to the Hefei Strategic Investors,
including, among others, the right of first refusal, co-sale right, preemptive right, anti-dilution right, redemption right, liquidation
preference and conditional drag-along right. You would not enjoy these preferential rights or treatment through investing in our ADSs
and the underlying ordinary shares. Exercise of these preferential rights by the Hefei Strategic Investors may also adversely affect your
investment in our company.
In particular, the Hefei Strategic Investors may require us to redeem the shares of NIO China they hold under various
circumstances, at a redemption price equal to the total amount of the investment price of the Hefei Strategic Investors plus an investment
income calculated at a compound rate of 8.5% per annum upon the occurrence of certain events. If any of the triggering events of
redemption occurs, we will need substantial capital to redeem the shares of NIO China held by the Hefei Strategic Investors, and the
value of your investment in our company will be negatively affected. In particular, if NIO China fails to apply for the qualified initial
public offering in July 2024, which is 48 months following the Hefei Strategic Investors’ payment of the first installment, or if NIO
China fails to complete the qualified initial public offering in July 2025, which is 60 months following the Hefei Strategic Investors’
payment of the first installment, the Hefei Strategic Investors may request us to redeem the equity interest in NIO China then held by
them. In addition, if we pursue the initial public offering of NIO China, we will be subject to various requirements under the Hong Kong
Listing Rules and relevant practice notes, including, among others, the requirement in the level of operations and assets of the remaining
business in our company following the spin-off to maintain listing status, the approval of the Hong Kong Stock Exchange and
shareholder approval. As a result, the application for and the completion of the qualified initial public offering are subject to substantial
uncertainties. If we do not have adequate cash available or cannot obtain additional financing, or our use of cash is restricted by
applicable laws, regulations or agreements governing our current or future indebtedness, we may not be able to redeem shares of NIO
China when required under the Hefei Shareholders Agreement, which would constitute an event of default under the Hefei Shareholders
Agreement and subject us to liabilities.
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In addition, before NIO China completes its potential qualified initial public offering, without the prior written consent of the
Hefei Strategic Investors, we may not directly or indirectly transfer, pledge or otherwise dispose of NIO China’s shares to a third party
that may result in our shareholding in NIO China falling below 60%. Without the prior written consent of the Hefei Strategic Investors,
we have the right to directly or indirectly transfer, pledge or otherwise dispose of no more than 15% of NIO China’s shares.
Because we have injected the core businesses and assets into NIO China, the Hefei Strategic Investors will have senior claims
over the assets of NIO China compared to NIO China’s other shareholders (i.e., our other subsidiaries) when a liquidation event of NIO
China occurs. As a result, holders of our Class A ordinary shares and ADSs will be structurally subordinated to the Hefei Strategic
Investors, which may negatively affect the value of the investment of ADS holders and holders of Class A ordinary shares in our
company. We may not have sufficient funding to repay our existing debts. We essentially control the daily operation of and substantially
all of the corporate matters of NIO China. Notwithstanding this, the Hefei Strategic Investors have voting rights with respect to various
significant corporate matters of NIO China and its consolidated entities, such as change in NIO China’s corporate structure, change of its
core business and amendment to its articles of association, which may limit our ability to make certain major corporate decisions with
regard to NIO China. Any of the foregoing could materially adversely affect your investment in our Class A ordinary shares and ADSs.
Our business plans require a significant amount of capital. In addition, our future capital needs may require us to issue additional
equity or debt securities that may have an adverse effect on our shareholders or may otherwise adversely affect our business.
We will need significant capital to, among other things, conduct research and development and expand our production capacity
as well as roll out our power and servicing network and our NIO Houses and NIO Spaces. As we ramp up our production capacity and
operations, we may also require significant capital to maintain our property, plant and equipment and such costs may be greater than
anticipated. We expect our capital expenditures to continue to be significant in the foreseeable future as we expand our business, and that
our level of capital expenditures will be significantly affected by user demand for our products and services. The fact that we have a
limited operating history means we have limited historical data on the demand for our products and services. As a result, our future
capital requirements may be uncertain and actual capital requirements may be different from those we currently anticipate. We plan to
seek equity or debt financing to finance a portion of our capital expenditures. Such financing might not be available to us in a timely
manner or on terms that are acceptable, or at all. Our substantial amount of currently outstanding indebtedness may also affect our ability
to obtain financing in a timely manner and on reasonable terms.
Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general
market conditions and investor acceptance of our business plan. These factors may make the timing, amount, terms and conditions of
such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our
spending of, delay or cancel some or all of our planned research, development, manufacturing and marketing activities or substantially
change our corporate structure, any of which could materially harm our business. We might not be able to obtain any funding, and we
might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or
discontinue our operations.
In addition, our future capital needs and other business reasons could require us to issue additional equity or debt securities or
obtain a credit facility. If we raise funds through the issuance of additional equity or debt, including convertible debt or debt secured by
some or all of our assets, holders of any debt securities or preferred shares issued will have rights, preferences and privileges senior to
those of holders of our ordinary shares in the event of liquidation. The terms of the convertible notes we issued do not restrict our ability
to issue additional debt. If additional debt is issued, there is a possibility that once all senior claims are settled, there may be no assets
remaining to pay out to the holders of ordinary shares. In addition, if we raise funds through the issuance of additional equity, whether
through private placements or public offerings, such an issuance would dilute ownership of our current shareholders that do not
participate in the issuance.
Furthermore, the terms of any additional debt securities we may issue in the future may impose restrictions on our operations,
which may include limiting our ability to incur additional indebtedness, pay dividends on or repurchase our share capital, or make certain
acquisitions or investments. In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios, and our
ability to satisfy such covenants may be affected by events outside of our control.
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The terms of the convertible notes we issued could delay or prevent an attempt to take over our company.
The terms of the 2024 Notes, 2026 Notes and 2027 Notes require us to repurchase the respective notes in the event of a
fundamental change. A takeover of our company would constitute a fundamental change. This could have the effect of delaying or
preventing a takeover of our company that may otherwise be beneficial to our shareholders.
Our warranty reserves may be insufficient to cover future warranty claims which could adversely affect our financial performance.
For the initial owner of our vehicles in China, in addition to the warranty required under the relevant PRC law, including (i) a
bumper-to-bumper three-year or 120,000-kilometer warranty, (ii) for critical EV components (battery, electric motors, power electric unit
and vehicle control unit) an eight-year or 120,000-kilometer warranty, and (iii) a two-year or 50,000 kilometer warranty covering vehicle
repair, replacement and refund, we also provide an extended warranty, subject to certain conditions. For the owners of our vehicles in
Europe, in addition to the warranty required under the applicable laws and regulations, we also provide an extended warranty subject to
certain conditions. Our warranty program is similar to other auto company’s warranty programs intended to cover all parts and labor to
repair defects in material or workmanship in the body, chassis, interior, electric system, battery, electric powertrain, etc.. We plan to
record and adjust warranty reserves based on changes in estimated costs and actual warranty costs.
However, because we only started making delivery of our first volume-manufactured vehicle model ES8 in June 2018, we have
little experience with warranty claims regarding our vehicles or with estimating warranty reserves. As of December 31, 2022, we had
warranty reserves in respect of our vehicles of RMB2,946.9 million (US$427.3 million). We cannot assure you that such reserves will be
sufficient to cover future claims. We could, in the future, become subject to significant and unexpected warranty claims, resulting in
significant expenses, which would in turn materially and adversely affect our results of operations, financial condition and prospects.
We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause
us to incur substantial costs.
Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary
rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our vehicles or components, which
could make it difficult for us to operate our business. From time to time, we may receive communications from holders of patents or
trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging
infringement of such rights or otherwise assert their rights and urge us to take licenses. Our applications and uses of trademarks relating
to our design, software or artificial intelligence technologies could be found to infringe upon existing trademark ownership and rights.
For example, a German automotive manufacturer claimed infringement of its trademark rights by us based on resemblance of model
designations of certain of our vehicles with theirs. For that purpose, it has filed an infringement lawsuit with the Munich Regional Court
against us and brought certain opposition or cancellation proceedings against our use of the aforesaid model designations in front of
competent intellectual property authorities in certain jurisdictions. As of the date of this annual report, the lawsuit and the proceedings
are still ongoing and we have not received any final and binding decisions. We cannot assure you that the final ruling will be in our favor.
If we are not permitted to use these model names in Europe or other jurisdictions where our vehicles are offered, our sales performance
there may be negatively affected, which in turn would harm our results of operations and financial condition.
If we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of
the following:
● cease selling, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use
the challenged intellectual property;
● pay substantial damages;
● seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable
terms or at all;
● redesign our vehicles or other goods or services; or
● establish and maintain alternative branding for our products and services.
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In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed
technology or other intellectual property right, our business, prospects, operating results and financial condition could be materially and
adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and
diversion of resources and management attention.
We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and
competitive position.
We regard our trademarks, service marks, patents, domain names, trade secrets, proprietary technologies and similar intellectual
property as critical to our success. We rely on trademark and patent law, trade secret protection and confidentiality and license
agreements with our employees and others to protect our proprietary rights.
We have invested significant resources to develop our own intellectual property. Failure to maintain or protect these rights could
harm our business. In addition, any unauthorized use of our intellectual property by third parties may adversely affect our current and
future revenues and our reputation.
Implementation and enforcement of PRC intellectual property-related laws have historically been deficient and ineffective.
Accordingly, protection of intellectual property rights in China may not be as effective as in the United States or other countries with
more developed intellectual property laws. Furthermore, policing unauthorized use of proprietary technology is difficult and expensive.
We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual
property rights. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our
intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized
use of our intellectual property is difficult and costly, and we cannot assure you that the steps we have taken or will take will prevent
misappropriation of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property
rights, which could result in substantial costs and diversion of our resources.
As our patents may expire and may not be extended, our patent applications may not be granted and our patent rights may be
contested, circumvented, invalidated or limited in scope, our patent rights may not protect us effectively. In particular, we may not be
able to prevent others from developing or exploiting competing technologies, which could have a material and adverse effect on our
business operations, financial condition and results of operations.
As of December 31, 2022, we had 3,703 issued patents and 2,338 patent applications pending. For our pending application, we
cannot assure you that we will be granted patents pursuant to our pending applications. Even if our patent applications succeed and we
are issued patents in accordance with them, it is still uncertain whether these patents will be contested, circumvented or invalidated in the
future. In addition, the rights granted under any issued patents may not provide us with meaningful protection or competitive advantages.
The claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing
technologies that are similar or that achieve results similar to ours. The intellectual property rights of others could also bar us from
licensing and exploiting any patents that issue from our pending applications. Numerous patents and pending patent applications owned
by others exist in the fields in which we have developed and are developing our technology. These patents and patent applications might
have priority over our patent applications and could subject our patent applications to invalidation. Finally, in addition to those who may
claim priority, any of our existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or
unenforceable.
We have limited insurance coverage, which could expose us to significant costs and business disruption.
We have limited liability insurance coverage for our products and business operations. A successful liability claim against us
due to injuries suffered by our users could materially and adversely affect our financial condition, results of operations and reputation. In
addition, we do not have any business disruption insurance. Any business disruption event could result in substantial costs to us and
diversion of our resources.
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We have a significant amount of debt, including our convertible senior notes, that are senior in capital structure and cash flow,
respectively, to our shareholders. Satisfying the obligations relating to our debt could adversely affect the amount or timing of
distributions to our shareholders or result in dilution.
As of December 31, 2022, we had RMB10,885.8 million (US$1,578.3 million) in total long-term borrowings outstanding,
consisting primarily of (i) our 4.50% convertible senior notes due 2024; (ii) our 0.00% convertible senior notes due 2026 and 0.50%
convertible senior notes due 2027 and (iii) our long-term bank debt excluding the current portions that are due within one year from
December 31, 2022. Meanwhile, as of December 31, 2022, we had RMB5,277.1 million (US$765.1 million) in total short-term
borrowings including the current portions of long-term borrowings.
In February 2019, we issued US$750 million aggregate principal amount of 4.50% convertible senior notes due 2024, or the
2024 Notes. The 2024 Notes are unsecured debt and are not redeemable by us prior to the maturity date except for certain changes in tax
law. In accordance with the indenture governing the 2024 Notes, or the 2024 Notes Indenture, holders of the 2024 Notes may require us
to purchase all or any portion of their notes on February 1, 2022 at a repurchase price equal to 100% of the principal amount of the 2024
Notes to be repurchased, plus accrued and unpaid interest. Such repurchase right offer expired on January 28, 2022. None of the
noteholders exercised their repurchase right, and no Notes were surrendered for repurchase. Holders of the 2024 Notes may also require
us, upon a fundamental change (as defined in the 2024 Notes Indenture), to repurchase for cash all or part of their 2024 Notes at a
fundamental change repurchase price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus accrued and
unpaid interest. In connection with the issuance of the 2024 Notes, we entered into capped call transactions and zero-strike call option
transactions. Shortly after the pricing of the 2026 Notes and the 2027 Notes in January 2021, we entered into separate and individually
privately negotiated agreements with certain holders of the 2024 Notes to exchange approximately US$581.7 million principal amount of
the outstanding 2024 Notes for ADSs (each, a “2024 Notes Exchange” and collectively, the “2024 Notes Exchanges”). The 2024 Notes
Exchanges closed on January 15, 2021. In connection with the 2024 Notes Exchanges, we also entered into agreements with certain
financial institutions that are parties to our existing capped call transactions (which we had entered into in February 2019 in connection
with the issuance of the 2024 Notes) shortly after the pricing of the 2026 Notes and the 2027 Notes to terminate a portion of the relevant
existing capped call transactions in a notional amount corresponding to the portion of the principal amount of such 2024 Notes
exchanged. In connection with such terminations of the existing capped call transactions, we received deliveries of ADSs in such
amounts as specified pursuant to such termination agreements on January 15, 2021.
In September 2019, each of an affiliate of Tencent Holdings Limited and Mr. Bin Li, our founder, chairman of the board of
directors and chief executive officer, subscribed for US$100 million principal amount of convertible notes, each in two equally split
tranches, collectively the Affiliate Notes. The Affiliate Notes issued in the first tranche matured in 360 days from the issuance date, bore
no interest, and required us to pay a premium at 2% of the principal amount at maturity. The Affiliate Notes issued in the second tranche
matured on the date that was three years from the issuance date, bore no interest, and required us to pay a premium at 6% of the principal
amount at maturity. As of December 31, 2022, all of the Affiliate Notes, including principal and premium, were converted into Class A
ordinary shares or ADSs.
In February and March 2020, we issued and sold convertible notes in an aggregate principal amount of US$435 million due
2021, or the 2021 Notes, to several unaffiliated Asia based investment funds. The 2021 Notes bore zero interest. The holders of the 2021
Notes issued in February 2020 have the right to convert either all or part of the principal amount of the 2021 Notes into our Class A
ordinary shares (or ADSs), prior to maturity and (a) from the date that is six months after the issuance date, at a conversion price of
US$3.07 per ADS, or (b) upon the completion of a bona fide issuance of equity securities of our company for fundraising purposes, at
the conversion price derived from such equity financing. The holders of the 2021 Notes issued in March 2020 have the right to convert
either all or part of the principal amount of the 2021 Notes into our Class A ordinary shares (or ADSs), prior to maturity and from
September 5, 2020, at a conversion price of US$3.50 per ADS, subject to certain adjustments. As of December 31, 2020, all of the 2021
Notes had been converted to ADSs.
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In January 2021, we issued US$750 million aggregate principal amount of 0.00% convertible senior notes due 2026, or the 2026
Notes, and US$750 million aggregate principal amount of 0.50% convertible senior notes due 2027, or the 2027 Notes. The 2026 Notes
and the 2027 Notes are unsecured debt. Prior to August 1, 2025, in the case of the 2026 Notes, and August 1, 2026, in the case of the
2027 Notes, the 2026 Notes and the 2027 Notes, as applicable, will be convertible at the option of the holders only upon satisfaction of
certain conditions and during certain periods. Holders may convert their 2026 Notes or 2027 Notes, as applicable, at their option at any
time on or after August 1, 2025, in the case of the 2026 Notes, or August 1, 2026, in the case of the 2027 Notes, until the close of
business on the second scheduled trading day immediately preceding the relevant maturity date. Upon conversion, we will pay or deliver
to such converting holders, as the case may be, cash, ADSs, or a combination of cash and ADSs, at our election. The initial conversion
rate of the 2026 Notes is 10.7458 ADSs per US$1,000 principal amount of such 2026 Notes. The initial conversion rate of the 2027
Notes is 10.7458 ADSs per US$1,000 principal amount of such 2027 Notes. The relevant conversion rate for such series of the 2026
Notes and the 2027 Notes is subject to adjustment upon the occurrence of certain events. Holders of the 2026 Notes and the 2027 Notes
may require us to repurchase all or part of their 2026 Notes and 2027 Notes for cash on February 1, 2024, in the case of the 2026 Notes,
and February 1, 2025, in the case of the 2027 Notes, or in the event of certain fundamental changes, at a repurchase price equal to 100%
of the principal amount of the 2026 Notes or the 2027 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding,
the relevant repurchase date. In addition, on or after February 6, 2024, in the case of the 2026 Notes, and February 6, 2025, in the case of
the 2027 Notes, until the 20th scheduled trading day immediately prior to the relevant maturity date, we may redeem the 2026 Notes or
the 2027 Notes, as applicable for cash subject to certain conditions, at a redemption price equal to 100% of the principal amount of the
2026 Notes or the 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the relevant optional
redemption date. Furthermore, we may redeem all but not part of the 2026 Notes or the 2027 Notes in the event of certain changes in the
tax laws. In 2022, we repurchased an aggregate principal amount of US$192.9 million of 2026 Notes for a total cash consideration of
US$170.5 million.
Satisfying the obligations of all these indebtedness and interest liabilities could adversely affect the amount or timing of any
distributions to our shareholders. We may choose to satisfy, repurchase, or refinance any of these liabilities through public or private
equity or debt financings if we deem such financings available on favorable terms. If we do not have adequate cash available or cannot
obtain additional financing, or our use of cash is restricted by applicable law, regulations or agreements governing our current or future
indebtedness, we may not be able to repurchase any of these notes when required under the respective transaction documents, which
would constitute an event of default under the respective transaction documents. An event of default could also lead to a default under
other agreements governing our current and future indebtedness, and if the repayment of such other indebtedness were accelerated, we
may not have sufficient funds to repay the indebtedness and repurchase any of these notes or make cash payments upon conversion of
any of these notes. In addition, the holders of any of these notes may convert their notes to a number of our ADSs in accordance with the
respective transaction documents. Any conversion will result in immediate dilution to the ownership interests of existing shareholders
and such dilution could be material. Lastly, we are exposed to interest rate risk related to our portfolio of investments in debt securities
and the debt that we have issued. Among other things, some of our bank loans carry floating interest, and increases in interest rates
would result in a decrease in the fair value of our outstanding debt. In the event that we incur a decrease in the fair value of our
outstanding debt, our financial performance will be adversely affected.
We are or may be subject to risks associated with strategic alliances or acquisitions.
We have entered into and may in the future enter into strategic alliances, including joint ventures or minority equity
investments, with various third parties to further our business purpose from time to time. These alliances could subject us to a number of
risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in
establishing new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to
monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm
to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our
association with any such third party.
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In addition, we may acquire additional assets, products, technologies or businesses that are complementary to our existing
business. In addition to possible shareholder approval, we may have to obtain approvals and licenses from relevant government
authorities for the acquisitions and to comply with any applicable PRC laws and regulations, which could result in increased delay and
costs, and may derail our business strategy if we fail to do so. Furthermore, past and future acquisitions and the subsequent integration of
new assets and businesses into our own require significant attention from our management and could result in a diversion of resources
from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate
the financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity
securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to
potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be
significant.
If we fail to manage our growth effectively, we may not be able to execute our growth strategies successfully.
We have expanded our operations, and as we ramp up our production and sales, further significant expansion may be required,
especially in connection with providing our users with high-quality service, expansion of our sale network and power infrastructures, and
managing different models of vehicles. Our future operating results depend to a large extent on our ability to manage this expansion and
growth successfully. Risks that we face in undertaking this expansion include, among others:
● managing a larger organization with different divisions;
● training a greater number of employees and managing their behaviors, including but not limited to deterring or preventing
employee misconducts or illegal actions;
● controlling expenses and investments in anticipation of expanded operations;
● establishing or expanding design, manufacturing, sales and service facilities;
● implementing and enhancing administrative infrastructure, systems and processes; and
● addressing new markets and potentially unforeseen challenges as they arise.
Any failure to manage our growth effectively could materially and adversely affect our business, prospects, results of operations
and financial condition.
We have granted, and may continue to grant options and other types of awards under our share incentive plan, which may result in
increased share-based compensation expenses.
We adopted share incentive plans in 2015, 2016, 2017 and 2018, which we refer to as the 2015 Plan, the 2016 Plan, the 2017
Plan and the 2018 Plan, respectively, in this annual report, for the purpose of granting share-based compensation awards to employees,
directors and consultants to incentivize their performance and align their interests with ours. The 2018 Plan became effective as of
January 1, 2019. We recognize expenses in our consolidated statement of income in accordance with U.S. GAAP. Under our share
incentive plans, we are authorized to grant options and other types of awards. Under the 2015 Plan, the 2016 Plan and the 2017 Plan, the
maximum numbers of Class A ordinary shares which may be issued pursuant to all awards are 46,264,378, 18,000,000 and 33,000,000,
respectively. Under the 2018 Plan, a maximum number of 23,000,000 Class A ordinary shares may be issued pursuant to all awards. This
amount should automatically increase each year by the number of shares representing 1.5% of the then total issued and outstanding share
capital of our company as of the end of each preceding year. As of December 31, 2022, awards to purchase an aggregate amount of
115,936,986 Class A ordinary shares under the 2015 Plan, the 2016 Plan, the 2017 Plan and the 2018 Plan had been granted and were
outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates. In addition, one of our subsidiaries also
adopted a share incentive plan in 2021, pursuant to which the subsidiary can grant share options to its employees. As of December 31,
2022, our unrecognized share-based compensation expenses related to the stock option and restricted shares amounted to RMB7,344.3
million (US$1,064.8 million).
We believe the granting of share-based awards is of significant importance to our ability to attract and retain key personnel and
employees, and we will continue to grant share-based compensation to employees in the future. As a result, our expenses associated with
share-based compensation may increase, which may have an adverse effect on our results of operations.
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Furthermore, prospective candidates and existing employees often consider the value of the equity awards they receive in
connection with their employment. Thus, our ability to attract or retain highly skilled employees may be adversely affected by declines in
the perceived value of our equity or equity awards. Furthermore, there are no assurances that the number of shares reserved for issuance
under our share incentive plans will be sufficient to grant equity awards adequate to recruit new employees and to compensate existing
employees.
If we do not appropriately maintain effective internal control over financial reporting in accordance with Section 404 of the
Sarbanes-Oxley Act of 2002, we may be unable to accurately report our financial results and the market price of our ADSs may be
adversely affected.
We are subject to reporting obligations under the U.S. securities laws. The SEC, as required under Section 404 of the Sarbanes-
Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company’s internal control
over financial reporting in its document, which contains management’s assessment of the effectiveness of the company’s internal control
over financial reporting. We were subject to such requirement starting from the fiscal year of 2019. In addition, an independent registered
public accounting firm must attest to and report on the effectiveness of the company’s internal control over financial reporting.
In connection with the preparation and external audit of our consolidated financial statements as of and for the year ended
December 31, 2019, we and our independent registered public accounting firm identified one material weakness in our internal control
over financial reporting and concluded that our internal control over financial reporting was ineffective as of December 31, 2019. The
material weakness identified was that we do not have sufficient competent financial reporting and accounting personnel with an
appropriate understanding of U.S. GAAP to (i) design and implement formal period-end financial reporting policies and procedures to
address complex U.S. GAAP technical accounting issues and (ii) prepare and review our consolidated financial statements and related
disclosures in accordance with U.S. GAAP and the financial reporting requirements set forth by the SEC.
We implemented a number of remedial measures to address the material weakness, including (i) establishing clear roles and
responsibilities for accounting and financial reporting staff to address accounting and financial reporting issues; (ii) strengthening our
financial reporting team by hiring additional personnel with experience in U.S. GAAP and SEC reporting from reputable accounting
firms; (iii) further increasing the accounting and SEC reporting acumen and accountability of our finance organization employees
through training programs designed to enhance these employees’ competency with respect to U.S. GAAP and SEC reporting; (iv)
enhancing our monitoring controls over financial reporting, including additional review by our chief financial officer, financial vice
president, and other senior finance staff over the application of U.S. GAAP accounting requirements, the selection and evaluation of U.S.
GAAP accounting policies, critical accounting judgments and estimates, reporting and disclosures; (v) establishing related policies and
procedures to support the operation of internal controls at the entity level and process level; and (vi) strengthening our internal audit
function by hiring additional personnel with industry internal audit experience and experience in compliance with the requirements of
Section 404 of the Sarbanes-Oxley Act. As a result, this material weakness had been remediated as of December 31, 2020.
Our management has concluded that our internal control over financial reporting was effective as of December 31, 2022. In
addition, our independent registered public accounting firm has audited the effectiveness of our internal control over financial reporting
as of December 31, 2022.
In the future, our management may conclude that our internal control over financial reporting is not effective. Moreover, even if
our management concludes that our internal control over financial reporting is effective, our independent registered public accounting
firm, after conducting its own independent testing, may issue a report with adverse opinion if it is not satisfied with our internal controls
or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently
from us.
If we fail to implement and maintain an effective internal control environment, we could suffer material misstatements in our
consolidated financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our
reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline
in the trading price of our listed securities. Furthermore, we may need to incur additional costs and use additional management and other
resources as our business and operations further expand or in an effort to remediate any significant control deficiencies that may be
identified in the future. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or
misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and
civil or criminal sanctions.
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If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be
harmed due to negative publicity.
Our core values, which include developing high quality electric vehicles while operating with integrity, are an important
component of our brand image, which makes our reputation sensitive to allegations of unethical business practices. We do not control our
independent suppliers or their business practices. Accordingly, we cannot guarantee their compliance with ethical business practices,
such as environmental responsibilities, fair wage practices, and compliance with child labor laws, among others. A lack of demonstrated
compliance could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products,
product shortages or other disruptions of our operations.
Violation of labor or other laws by our suppliers or the divergence of an independent supplier’s labor or other practices from
those generally accepted as ethical in the markets in which we do business could also attract negative publicity for us and our brand. This
could diminish the value of our brand image and reduce demand for our electric vehicles if, as a result of such violation, we were to
attract negative publicity. If we, or other players in our industry, encounter similar problems in the future, it could harm our brand image,
business, prospects, results of operations and financial condition.
If we update our manufacturing equipment more quickly than expected, we may have to shorten the useful lives of any equipment to
be retired as a result of any such update, and the resulting acceleration in our depreciation could negatively affect our financial
results.
We and JAC have invested and expect to continue to invest significantly in what we believe is state of the art tooling, machinery
and other manufacturing equipment for the product lines where the vehicles are manufactured, and we depreciate the cost of such
equipment over their expected useful lives. However, manufacturing technology may evolve rapidly, and we or JAC may decide to
update our manufacturing process with advanced equipment more quickly than expected. Moreover, as our engineering and
manufacturing expertise and efficiency increase, we or JAC may be able to manufacture our products using less of our installed
equipment. The useful life of any equipment that would be retired early as a result would be shortened, causing the depreciation on such
equipment to be accelerated, and to the extent we own such equipment, our results of operations could be negatively impacted.
Furthermore, under the renewal joint manufacturing arrangement we entered into with JAC and Jianglai in May 2021 and under the
manufacturing cooperation agreement we entered into with JAC in September 2022, we agreed to pay JAC the asset depreciation and
amortization with regard to the assets JAC invested and to invest for the manufacture of our vehicle models as actually incurred, payable
monthly and annually, respectively, and subject to adjustment annually. An increased amount of investment made by JAC into the
manufacturing plants will lead to an increased cost in asset depreciation and amortization, which could negatively affect our results of
operations and financial conditions.
The construction and operation of our manufacturing facilities are subject to regulatory approvals or filings and may be subject to
changes, delays, cost overruns or may not produce expected benefits.
In 2017, we signed a framework agreement with the Shanghai Jiading government and its authorized investment entity to build
and develop our own manufacturing facility in Jiading, Shanghai. In 2019, we agreed with the related contractual parties to cease
construction of this planned manufacturing facility and terminate this development project.
In February 2020, we entered into a collaboration framework agreement with the municipal government of Hefei, Anhui
province. Subsequently from April to June 2020, we entered into definitive agreements, as amended and supplemented, for investments
in NIO China. Pursuant to the definitive agreements, we will collaborate with the Hefei Strategic Investors and HETA to develop NIO
China’s business and to support the accelerated development of the smart electric vehicle sectors in Hefei in the future. In February 2021,
we, through NIO China, entered into a further collaboration framework agreement with the municipal government of Hefei, Anhui
province, pursuant to which the Hefei government and NIO China agreed in principle to jointly build a world-class industrial campus to
support the development and innovations of the smart electric vehicle industry and related supply chains led by NIO China. In addition,
the Hefei government and its associated parties plan to re-invest their returns from the equity investments in NIO China to support the
further cooperation in Hefei.
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Under PRC law, construction projects are subject to broad and strict government supervision and approval procedures, including
but not limited to project approvals and filings, construction land and project planning approvals, environment protection approvals,
pollution discharge permits, work safety approvals, fire protection approvals, and the completion of inspection and acceptance by
relevant authorities. Some of the construction projects being carried out by us are undergoing necessary approval procedures as required
by law. As a result, the relevant entities operating such construction projects may be subject to administrative uncertainty, and
construction projects in question may be subject to fines or the suspension of use of such projects. Failure to complete the construction
projects on schedule and within budget, and failure to obtain necessary approvals or any incompliance with relevant government
supervision could have a material adverse impact on our operations, and we may not be able to find commercially reasonable
alternatives.
Our vehicles make use of lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame.
The batteries that we produce make use of lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy
they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. In June 2019,
certain safety incidents resulting from the batteries on ES8 vehicles occurred in Shanghai and other locations in China. We then
voluntarily recalled 4,803 ES8s, and replaced the batteries in the NIO battery swap network equipped with the malfunctioned modules.
While we have designed the battery to passively contain any single cell’s release of energy without spreading to neighboring cells, and
have taken measures to enhance the safety of our battery designs, a field or testing failure of our vehicles or other batteries that we
produce could occur in the future, which could subject us to lawsuits, product recalls, or redesign efforts, all of which would be time-
consuming and expensive. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications or
any future incident involving lithium-ion cells such as a vehicle or other fire, even if such incident does not involve our vehicles, could
seriously harm our business.
In addition, we store a significant number of lithium-ion cells at our facilities. Any mishandling of battery cells may cause
disruption to the operation of our facilities. While we have implemented safety procedures related to the handling of the cells, a safety
issue or fire related to the cells could disrupt our operations. Such damage or injury could lead to adverse publicity and potentially a
safety recall. Moreover, any failure of a competitor’s electric vehicle or energy storage product may cause indirect adverse publicity for
us and our products. Such adverse publicity could negatively affect our brand and harm our business, prospects, financial condition and
operating results.
Interruption or failure of our information technology and communications systems could impact our ability to effectively provide our
services.
We aim to provide our users with an innovative suite of services through our mobile application. In addition, our in-car services
depend, to a certain extent, on connectivity. The availability and effectiveness of our services depend on the continued operation of our
information technology and communications systems. Our systems are vulnerable to damage or interruption from, among other adverse
effects, fire, terrorist attacks, natural disasters, power loss, telecommunications failures, computer viruses, computer denial of service
attacks or other attempts to harm our systems. Our data centers are also subject to break-ins, sabotage, and intentional acts of vandalism,
and potential disruptions. Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all
eventualities. Any problems at our data centers could result in lengthy interruptions in our service. In addition, our products and services
are highly technical and complex and may contain errors or vulnerabilities, which could result in interruptions in our services or the
failure of our systems.
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-
compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial
measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and
reputation.
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and
regulations in various jurisdictions in which we conduct activities, including the U.S. Foreign Corrupt Practices Act, or FCPA, the U.K.
Bribery Act 2010, and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act 2010 prohibit us and our officers,
directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or
providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or
otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that
accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K.
Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of these laws or
regulations could adversely affect our business, results of operations, financial condition and reputation.
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We have direct or indirect interactions with officials and employees of government agencies and state-owned affiliated entities
in the ordinary course of business. We have also entered into joint ventures and/or other business partnerships with government agencies
and state-owned or affiliated entities. These interactions subject us to an increased level of compliance-related concerns. We are in the
process of implementing policies and procedures designed to ensure compliance by us and our directors, officers, employees,
representatives, consultants, agents and business partners with applicable anti-corruption, anti-bribery, anti-money laundering, financial
and economic sanctions and similar laws and regulations. However, our policies and procedures may not be sufficient and our directors,
officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be
held responsible.
Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could
subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions,
collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of
operations, financial condition and reputation. In addition, changes in economic sanctions laws in the future could adversely impact our
business and investments in our shares.
Any unauthorized control or manipulation of our vehicles’ systems could result in loss of confidence in us and our vehicles and harm
our business.
Our vehicles contain complex information technology systems. For example, our vehicles are designed with built-in data
connectivity to accept and install periodic remote updates from us to improve or update the functionality of our vehicles. We have
designed, implemented and tested security measures intended to prevent unauthorized access to our information technology networks,
our vehicles and their systems. However, hackers may attempt in the future, to gain unauthorized access to modify, alter and use such
networks, vehicles and systems to gain control of, or to change, our vehicles’ functionality, user interface and performance
characteristics, or to gain access to data stored in or generated by the vehicle. Vulnerabilities could be identified in the future and our
remediation efforts may not be successful. Any unauthorized access to or control of our vehicles or their systems or any loss of data
could result in legal claims or proceedings. In addition, regardless of their veracity, reports of unauthorized access to our vehicles, their
systems or data, as well as other factors that may result in the perception that our vehicles, their systems or data are capable of being
“hacked,” could negatively affect our brand and harm our business, prospects, financial condition and operating results.
We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.
Our business could be adversely affected by the effects of epidemics. In recent years, there have been outbreaks of epidemics in
China and globally. Our results of operations could be adversely affected to the extent that the outbreak harms the Chinese economy in
general.
We are also vulnerable to natural disasters and other calamities. Our vehicle production, sales and delivery and our service
operations and capacities could be materially and adversely affected by natural disasters and other calamities in the areas where we
operate and where our vehicles are sold to. For example, in July 2021, our deliveries of vehicles and power services were interrupted due
to the flood in Henan province and the typhoon in Shanghai and several other neighboring cities. Although we have servers that are
hosted in an offsite location, our backup system does not capture data on a real-time basis and we may be unable to recover certain data
in the event of a server failure. We cannot assure you that any backup systems will be adequate to protect us from the effects of fire,
floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of
the foregoing events may give rise to interruptions, breakdowns, system failures, technology platform failures or internet failures, which
could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide
services on our platform.
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Our revenues and financial results may be adversely affected by any economic slowdown in China as well as globally.
The success of our business ultimately depends on consumer spending. We derive a substantial majority of our revenues from
China. As a result, our revenues and financial results are impacted to a significant extent by economic conditions in China. The growth
rate of the Chinese economy has gradually slowed down since 2010 and the trend may continue. Any slowdown could significantly
reduce domestic commerce in China. In addition, as we continue to expand our global presence and offer products and services to
markets outside China, we expect our results of operations will also be impacted by the global economic conditions. The global
macroeconomic environment is facing numerous challenges. For example, there is considerable uncertainty over the long-term effects of
the previous expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s
leading economies, including the United States and China, and the ongoing transmission of monetary policy in the United States and
Europe. The conflicts in Ukraine and the imposition of broad economic sanctions on Russia, while have not had a direct impact on our
business operations and financial results to date, could raise energy prices, cause supply chain volatilities and disrupt global markets in
general, and may negatively affect our business expansion in Europe and other international markets, which may adversely affect our
results of operations and financial results. Regional unrest, terrorist threats and the potential for war may increase market volatility across
the globe. There have also been concerns about the relationship between China and other countries, including the surrounding Asian
countries, which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship
between the United States and China with respect to trade policies, treaties, government regulations and tariffs. In addition, the COVID-
19 pandemic has negatively impacted the economies of China, the United States and numerous other countries around the world, and is
expected to result in a severe global recession. Economic conditions in China are sensitive to global economic conditions, as well as
changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or
prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and
financial condition.
Sales of high-end and luxury consumer products, such as our performance electric vehicles, depend in part on discretionary
consumer spending and are even more exposed to adverse changes in general economic conditions. In response to their perceived
uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of our electric vehicles and our results of
operations may be materially and adversely affected.
We cannot predict the duration or direction of current trends or their impact on China and globally. If we experience unfavorable
global market conditions, or if we cannot or do not maintain operations at a scope that is commensurate with such conditions or are later
required to or choose to suspend such operations again, our business, prospects, financial condition and operating results may be harmed.
Shutdowns of the U.S. federal government could materially impair our business and financial condition.
Development of our product candidates and/or regulatory approval may be delayed for reasons beyond our control. For
example, over the last several years the U.S. government has shut down several times and certain regulatory agencies, such as the SEC,
have had to furlough critical SEC and other government employees and stop critical activities. In our operations as a public company,
future government shutdowns could impact our ability to access the public markets, such as delaying the declaration of effectiveness of
registration statements and obtaining necessary capital to properly capitalize and continue our operations.
Rising international political tension, including changes in U.S. and international trade policies, particularly with regard to China,
may adversely impact our business and operating results.
The U.S. government has made statements and taken certain actions that may lead to potential changes to U.S. and international
trade policies towards China. In January 2020, the “Phase One” agreement was signed between the United States and China on trade
matters. However, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to
international trade agreements, the imposition of tariffs on goods imported into the U.S., tax policy related to international commerce, or
other trade matters. While cross-border business may not currently be an area of our focus, any unfavorable government policies on
international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact the competitive
position of our products or prevent us from selling products in certain countries. Moreover, many of the recent policy updates in the U.S.,
including the Clean Network project initiated by the U.S. Department of State in August 2020 and the Entity List regime maintained and
regularly updated by the U.S. Bureau of Industry and Security, may have unforeseen implications for our business. If any new tariffs,
legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government
takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business,
financial condition and results of operations.
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Additionally, the United States and various foreign governments have imposed controls, export license requirements and
restrictions on the import or export of technologies and products (or voiced the intention to do so), especially related to semiconductor
chips, AI and other high-tech areas, which may have a negative impact on our business, financial condition and results of operations. For
instance, India banned a large number of apps in 2020 out of national security concerns, many of which are China-based apps, escalating
regional political and trade tensions.
Recent disruptions in the financial markets and economic conditions could affect our ability to raise capital.
In recent years, the United States and global economies suffered dramatic downturns as the result of a deterioration in the credit
markets and related financial crisis as well as a variety of other factors including, among other things, extreme volatility in security
prices, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others.
The United States and certain foreign governments have taken unprecedented actions in an attempt to address and rectify these extreme
market and economic conditions by providing liquidity and stability to the financial markets. If the actions taken by these governments
are not successful, the return of adverse economic conditions may cause a significant impact on our ability to raise capital, if needed, on
a timely basis and on acceptable terms or at all.
There are uncertainties relating to our users trust arrangement involving a portion of our chairman’s shareholding in our company.
In conjunction with our pursuit of being a user enterprise and with the goal of building a deeper connection between NIO and
our users, Mr. Bin Li, our founder, chairman of the board of directors and chief executive officer, transferred certain of his ordinary
shares to NIO Users Trust after the completion of the initial public offering of our ADSs on the New York Stock Exchange in September
2018. Currently, NIO Users Trust holds 16,967,776 Class A ordinary shares and 33,032,224 Class C ordinary shares through two holding
companies controlled by it. Mr. Li continues to retain the voting rights of these shares. In 2019, our user committee adopted the NIO
Users Trust Charter by way of voting, and established a User Council to generally discuss and give advice on the management and the
operation of NIO Users Trust. In this way, our users have the opportunity to discuss and propose the use of the economic benefits from
the shares in NIO Users Trust, which is intended to be composed mainly of the dividends from the shares that it holds future interests
accrued from and investment returns generated by cash assets to be held under the trust, and proceeds from the pledging of such shares
from time to time, through the User Council consisting of members of our user community elected by our users. See “Item 4. Information
on the Company—B. Business Overview—User Development and User Community—NIO Users Trust” for further details about NIO
Users Trust.
The current NIO Users Trust Charter provides certain mechanisms for the User Council to discuss the management and
supervision of the operations of NIO Users Trust. There is no assurance that such current mechanisms for managing the operations of
NIO Users Trust we have adopted are to the satisfaction of all of our users, or that such mechanisms will be carried out in the way it was
intended. The User Council may not be able to achieve its intended work focus or carry out their work effectively and efficiently as the
power to give instructions to the trustee vests with the settlor, protector and investment advisor of the trust. Furthermore, depending on
the proposed use of the economic interests of the shares held by the NIO Users Trust in the future, there could be accounting implications
to us that cannot presently be ascertained.
We and certain of our directors and officers have been named as defendants in several shareholder class action lawsuits, which could
have a material adverse impact on our business, financial condition, results of operation, cash flows and reputation.
Several shareholder class action lawsuits have been filed against us and certain of our directors and officers. See “Item 8.
Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings” for more details. We are
currently unable to estimate the potential loss, if any, associated with the resolution of such lawsuits, if they proceed. We anticipate that
we will continue to be a target for lawsuits in the future, including class action lawsuits brought by shareholders. There can be no
assurance that we will be able to prevail in our defense or reverse any unfavorable judgment on appeal, and we may decide to settle
lawsuits on unfavorable terms. Any adverse outcome of these cases, including any plaintiffs’ appeal of the judgment in these cases, could
result in payments of substantial monetary damages or fines, or changes to our business practices, and thus have a material adverse effect
on our business, financial condition, results of operation, cash flows and reputation. In addition, there can be no assurance that our
insurance carriers will cover all or part of the defense costs, or any liabilities that may arise from these matters. The litigation process
may utilize a significant portion of our cash resources and divert management’s attention from the day-to-day operations of our company,
all of which could harm our business. We also may be subject to claims for indemnification related to these matters, and we cannot
predict the impact that indemnification claims may have on our business or financial results.
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Risks Related to Our Corporate Structure
If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on
foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,
we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Foreign ownership of certain areas of businesses is subject to restrictions and prohibitions under current PRC laws and
regulations. For example, pursuant to the 2021 Negative List, foreign investors are not allowed to, among others, (i) own more than 50%
of the equity interests in a value-added telecommunication service provider (other than for e-commerce, domestic multi-parties
communications, storage and forwarding categories, call centers); and (ii) invest in certain services related to autonomous driving.
Additionally, in practice, subject to the qualifications set by the CBIRC for foreign shareholders of the insurance brokerage companies,
the CBIRC typically would not approve the establishment of foreign-invested insurance brokerage companies.
We are a Cayman Islands exempted company and our PRC subsidiaries are considered foreign-invested enterprises.
Accordingly, we have entered into a series of contractual arrangements with Beijing NIO, Anhui NIO AT, Anhui NIO DT and their
respective shareholders that enable us to hold or to apply for all the required licenses in China, including, among others, the ICP license,
the insurance brokerage license and certain licenses relating to the operation of certain services related to autonomous driving. For a
detailed description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—
Contractual Agreements with the VIEs and Their Shareholders.”
In the opinion of Han Kun Law Offices, our PRC legal counsel, (i) the ownership structures of NIO Co., Ltd. and Beijing NIO,
the ownership structure of Anhui NIO AD and Anhui NIO AT, and the ownership structure of NIO China and Anhui NIO DT, in China
do not result in any violation of PRC laws and regulations currently in effect; and (ii) the contractual arrangements between our
subsidiaries, the VIEs and their shareholders governed by PRC laws will not result in any violation of PRC laws or regulations currently
in effect. However, we have been advised by our PRC legal counsel that there are substantial uncertainties regarding the interpretation
and application of current and future PRC laws, regulations and rules, and there can be no assurance that the PRC regulatory authorities
will take a view that is consistent with the opinion of our PRC legal counsel. See “Item 4. Information on the Company—B. Business
Overview—Regulations— Regulations on Foreign Investment in China” and “Item 3. Key Information—D. Risk Factors—Risks
Related to Doing Business in China—Our business may be significantly affected by the newly enacted Foreign Investment Law.” It is
uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or, if adopted, what they would provide.
If the ownership structure, contractual arrangements and businesses of our PRC subsidiaries or the VIEs are found to be in
violation of any existing or future PRC laws or regulations, or our PRC subsidiaries or the VIEs fail to obtain or maintain any of the
required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such
violations or failures, including:
● revoking the business licenses and/or operating licenses of such entities;
● shutting down our servers or blocking our website, or discontinuing or placing restrictions or onerous conditions on our
operation through any transactions between our PRC subsidiaries and VIEs;
● imposing fines, confiscating the income from our PRC subsidiaries or the VIEs, or imposing other requirements with which
we or the VIEs may not be able to comply;
● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with
the VIEs and deregistering the equity pledge of the VIEs, which in turn would affect our ability to consolidate, derive
economic interests from, or exert effective control over the VIEs; or
● restricting or prohibiting our use of the proceeds of any financing outside China to finance our business and operations in
China, and taking other regulatory or enforcement actions that could be harmful to our business.
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Any of these actions could cause significant disruption to our business operations and severely damage our reputation, which
would in turn materially and adversely affect our business, financial condition and results of operations. If any of these occurrences
results in our inability to direct the activities of the VIEs that most significantly impact their economic performance, and/or our failure to
receive the economic benefits from the VIEs, we may not be able to consolidate the entities in our consolidated financial statements in
accordance with U.S. GAAP. Currently, Beijing NIO, Anhui NIO AT, and Anhui NIO DT, taking into account all of their respective
business with or without foreign investment restrictions under PRC laws, did not contribute any external revenue to our total revenues in
2020, 2021 and 2022. As of December 31, 2020, 2021 and 2022, the consolidated VIEs did not have significant operations or any
material assets or liabilities.
We rely on contractual arrangements with the VIEs and their shareholders to hold a controlling financial interest as the primary
beneficiary over each VIE and its related business, which may not be as effective as direct ownership in providing operational
control.
We have relied and expect to continue to rely on contractual arrangements with Beijing NIO, Anhui NIO AT, Anhui NIO DT
and their shareholders to conduct a portion of our operations in China. For a description of these contractual arrangements, see “Item 4.
Information on the Company—C. Organizational Structure—Contractual Agreements with the VIEs and Their Shareholders.” The
shareholders of VIEs may not act in the best interests of our company or may not perform their obligations under these contracts. If we
had direct ownership of the VIEs, we would be able to exercise our rights as a shareholder to control the VIEs to exercise rights of
shareholders to effect changes in the board of directors of the VIEs, which in turn could implement changes, subject to any applicable
fiduciary obligations, at the management and operational level. However, under the contractual arrangements, we would rely on legal
remedies under PRC law for breach of contract in the event that the VIEs and their shareholders did not perform their obligations under
the contracts. These legal remedies may not be as effective as direct ownership in providing us with control over the VIEs.
If the VIEs or their shareholders fail to perform their obligations under the contractual arrangements, we may have to incur
substantial costs and expend additional resources to enforce such arrangements, and rely on legal remedies under PRC laws, including
contractual remedies, which may not be sufficient or effective. All of the agreements under our contractual arrangements are governed by
and interpreted in accordance with PRC laws, and disputes arising from these contractual arrangements will be resolved through
arbitration in China. However, the legal framework and system in China, particularly those relating to arbitration proceedings, are not as
developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our
ability to enforce these contractual arrangements. Meanwhile, there are very few precedents and little formal guidance as to how
contractual arrangements in the context of a VIE should be interpreted or enforced under PRC law. There remain significant uncertainties
regarding the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC laws, rulings by
arbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards
within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in the PRC courts through arbitration award
recognition proceedings, which would require additional expenses and delay. If we are unable to enforce these contractual arrangements,
or if we suffer significant delay or face other obstacles in the process of enforcing these contractual arrangements, we may not be able to
exert effective control over the VIEs, and our ability to conduct our business may be negatively affected. See “Risks Related to Doing
Business in China—Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections
available to you and us.”
Our ability to enforce the equity pledge agreements between us and the VIEs’ shareholders may be subject to limitations based on
PRC laws and regulations.
Pursuant to the equity pledge agreements under our VIE contractual arrangements, each shareholder of the VIEs agrees to
pledge its equity interests in the respective VIE to our relevant PRC subsidiary to secure the respective VIE’s performance of its
obligations under the relevant contractual arrangements. The equity pledges of shareholders of each VIE under relevant equity pledge
agreements have been registered with the relevant local branch of the SAMR. In addition, in the registration forms of the local branch of
the SAMR for the pledges over the equity interests under the equity pledge agreements, the aggregate amount of registered equity
interests pledged to NIO Co., Ltd. represents 100% of the registered capital of Beijing NIO, the aggregate amount of registered equity
interests pledged to Anhui NIO AD represents 100% of the registered capital of Anhui NIO AT, and the aggregate amount of registered
equity interests pledged to NIO China represents 100% of the registered capital of Anhui NIO DT See “Item 4. Information on the
Company—C. Organizational Structure—Contractual Agreements with the VIEs and Their Shareholders” for more information.
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The equity pledge agreements with the VIEs’ shareholders provide that the pledged equity interests shall constitute continuing
security for any and all of the indebtedness, obligations and liabilities under all of the principal service agreements and the scope of
pledge shall not be limited by the amount of the registered capital of that VIE. However, a PRC court may take the position that the
amount listed on the equity pledge registration forms represents the full amount of the collateral that has been registered and perfected. If
this is the case, the obligations that are supposed to be secured in the equity pledge agreements in excess of the amount listed on the
equity pledge registration forms could be determined by the PRC court as unsecured debt, which typically takes last priority among
creditors.
The shareholders of the VIEs have conflicts of interest with us, which may materially and adversely affect our business and financial
condition.
Our founders, Bin Li and Lihong Qin, own 80% and 20%, respectively, of the equity interests in Beijing NIO and Anhui NIO
DT, and own 80% and 2.24%, respectively of the equity interests in Anhui NIO AT. Shaoqing Ren, an assistant vice president, owns
17.76% of the equity interests in Anhui NIO AT. See “Item 4. Information on the Company—C. Organizational Structure—Contractual
Agreements with the VIEs and Their Shareholders” for more information. As shareholders of the VIEs, they have conflicts of interest
with us. These shareholders may breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements we have
with them and the VIEs, which would have a material and adverse effect on our ability to effectively control the VIEs and receive
economic benefits from it. For example, the shareholders may be able to cause our agreements with the VIEs to be performed in a
manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis.
We cannot assure you that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our company or
such conflicts will be resolved in our favor.
Currently, we do not have any arrangements to address conflicts of interest between these shareholders and our company. Each
of Bin Li and Lihong Qin is also a director and executive officer of our company, and Shaoqing Ren is an assistant vice president of our
company. We rely on Bin Li, Lihong Qin and Shaoqing Ren to abide by the laws of the Cayman Islands and China, which provide that
directors and senior management owe a fiduciary duty to the company that requires them to act in good faith and in what they believe to
be the best interests of the company and not to use their position for personal gain. There is currently no specific and clear guidance
under PRC laws that addresses any conflict between PRC laws and the laws of Cayman Islands in respect of any conflict relating to
corporate governance. If we cannot resolve any conflict of interest or dispute between us and the shareholders of VIEs, we would have to
rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of
any such legal proceedings.
Our contractual arrangements with the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or
the VIEs owe additional taxes, which could negatively affect our financial condition.
Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or
challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. The PRC Enterprise
Income Tax Law requires every enterprise in China to submit its annual enterprise income tax return together with a report on
transactions with its related parties to the relevant tax authorities. The tax authorities may impose reasonable adjustments on taxation if
they have identified any related party transactions that are inconsistent with arm’s length principles. We may face material and adverse
tax consequences if the PRC tax authorities determine that the contractual arrangements between our relevant PRC subsidiaries the VIEs
in China, and the VIEs’ shareholders were not entered into on an arm’s length basis in such a way as to result in an impermissible
reduction in taxes under applicable PRC laws, rules and regulations, and adjust VIEs’ income in the form of a transfer pricing
adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by VIEs for
PRC tax purposes, which could in turn increase their tax liabilities without reducing our relevant PRC subsidiary’s tax expenses. If any of
our relevant PRC subsidiaries requests the shareholders of the respective VIE to transfer their equity interests in such VIE at nominal or
no value pursuant to the contractual agreements, such transfer could be viewed as a gift and subject our relevant PRC subsidiary to PRC
income tax. Furthermore, the PRC tax authorities may impose late payment fees and other penalties on VIEs for the adjusted but unpaid
taxes according to the applicable regulations. Our financial position could be materially and adversely affected if any of the VIEs’ tax
liabilities increase or if any VIE is required to pay late payment fees and other penalties.
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We may lose the ability to use and benefit from assets held by the VIEs that are material to the operation of our business if the VIEs
go bankrupt or becomes subject to dissolution or liquidation proceedings.
As part of our contractual arrangements with the VIEs, the entities may in the future hold certain assets that are material to the
operation of our business. If any VIE goes bankrupt and all or part of its assets become subject to liens or rights of third-party creditors,
we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial
condition and results of operations. Under the contractual arrangements, the VIEs may not, in any manner, sell, transfer, mortgage or
dispose of their assets or legal or beneficial interests in the business without our prior consent. If any VIE undergoes voluntary or
involuntary liquidation proceedings, unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our
ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.
Divestitures of businesses and assets may have a material and adverse effect on our business and financial condition.
We may undertake in the future, partial or complete divestitures or other disposal transactions in connection with certain of our
businesses and assets, particularly ones that are not closely related to our core focus areas or might require excessive resources or
financial capital, to help our company meet its objectives. These decisions are largely based on our management’s assessment of the
business models and likelihood of success of these businesses. However, our judgment could be inaccurate, and we may not achieve the
desired strategic and financial benefits from these transactions. Our financial results could be adversely affected by the impact from the
loss of earnings and corporate overhead contribution/allocation associated with divested businesses.
Dispositions may also involve continued financial involvement in the divested business, such as through guarantees, indemnities
or other financial obligations. Under these arrangements, performance by the divested businesses or other conditions outside of our
control could affect our future financial results. We may also be exposed to negative publicity as a result of the potential misconception
that the divested business is still part of our consolidated group. On the other hand, we cannot assure you that the divesting business
would not pursue opportunities to provide services to our competitors or other opportunities that would conflict with our interests. If any
conflicts of interest that may arise between the divesting business and us cannot be resolved in our favor, our business, financial
condition, results of operations could be materially and adversely affected.
Furthermore, reducing or eliminating our ownership interests in these businesses might negatively affect our operations,
prospects, or long-term value. We may lose access to resources or know-how that would have been useful in the development of our own
business. Our ability to diversify or expand our existing businesses or to move into new areas of business may be reduced, and we may
have to modify our business strategy to focus more exclusively on areas of business where we already possess the necessary expertise.
We may sell our interests too early, and thus forego gains that we otherwise would have received had we not sold. Selecting businesses to
dispose of or spin off, finding buyers for them (or the equity interests in them to be sold) and negotiating prices for what may be
relatively illiquid ownership interests with no easily ascertainable fair market value will also require significant attention from our
management and may divert resources from our existing business, which in turn could have an adverse effect on our business operations.
The Hong Kong Stock Exchange has granted us a waiver from strict compliance with the requirements in Paragraph 3(b) of
Practice Note 15 to the Hong Kong Listing Rules such that we are able to list a subsidiary entity on the Hong Kong Stock Exchange
within three years of the listing of our Class A ordinary shares on the Hong Kong Stock Exchange. While we currently do not have any
plan with respect to any spin-off listing on the Hong Kong Stock Exchange, we may consider a spin-off listing on the Hong Kong Stock
Exchange for one or more of our businesses within the three-year period subsequent to our listing in Hong Kong. The waiver granted by
the Hong Kong Stock Exchange is conditional upon us confirming to the Hong Kong Stock Exchange in advance of any spin-off that it
would not render our Company incapable of fulfilling the eligibility requirements under Rule 19C.05 of the Hong Kong Listing Rules
based on the financial information of the entity or entities to be spun-off at the time of the listing of our Class A ordinary shares on the
Hong Kong Stock Exchange (calculated cumulatively if more than one entity is spun-off).
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Risks Related to Doing Business in China
The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements
and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such
inspections.
Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this annual
report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws
in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional
standards. The auditor is located in mainland China, a jurisdiction where the PCAOB was historically unable to conduct inspections and
investigations completely before 2022. As a result, we and investors in the ADSs were deprived of the benefits of such PCAOB
inspections. The inability of the PCAOB to conduct inspections of auditors in China in the past has made it more difficult to evaluate the
effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to
auditors outside of China that are subject to the PCAOB inspections. On December 15, 2022, the PCAOB issued a report that vacated its
December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to
inspect or investigate completely registered public accounting firms. However, if the PCAOB determines in the future that it no longer
has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm
headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in our
ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the
ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or
investigate completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and
adversely affect the value of your investment.
Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm
that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or ADSs from being
traded on a national securities exchange or in the over-the-counter trading market in the United States.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to
inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong and our auditor
was subject to that determination. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA
following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB
removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered
public accounting firms. For this reason, we 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, 2022.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and
Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate
completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these
jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified
Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the HFCAA, our securities
would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if
we are identified as a Commission-Identified Issuer for two consecutive years in the future. Although our Class A ordinary shares have
been listed on the Hong Kong Stock Exchange and the Singapore Exchange, and the ADSs and Class A ordinary shares are fully
fungible, we cannot assure you that an active trading market for our Class A ordinary shares on the Hong Kong Stock Exchange and the
Singapore Exchange will be sustained or that the ADSs can be converted and traded with sufficient market recognition and liquidity, if
our shares and ADSs are prohibited from trading in the United States. A prohibition of being able to trade in the United States would
substantially impair your ability to sell or purchase our ADSs when you wish to do so, and the risk and uncertainty associated with
delisting would have a negative impact on the price of our ADSs. Also, such a prohibition would significantly affect our ability to raise
capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and
prospects.
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Changes in China’s political or social conditions or government policies could have a material and adverse effect on our business and
results of operations.
Substantially all of our revenues are expected to be derived in China in the near future and most of our operations, including all
of our manufacturing, is conducted in China. Accordingly, our results of operations, financial condition and prospects are influenced by
economic, political and legal developments in China. China’s economy differs from the economies of most developed countries in many
respects, including with respect to the amount of government involvement, level of development, growth rate, control of foreign
exchange and allocation of resources. The PRC government exercises significant control over China’s economic growth through
strategically allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and
providing preferential treatment to particular industries or companies. While the PRC economy has experienced significant growth over
the past decades, that growth has been uneven across different regions and between economic sectors and may not continue, as evidenced
by the slowing of the growth of the Chinese economy since 2012. Any adverse changes in economic conditions in China, in the policies
of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth
of China. Such developments could adversely affect our business and operating results, leading to reduction in demand for our services
and solutions and adversely affect our competitive position.
Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you
and us.
The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may
be cited for reference but have limited precedential value.
Our PRC subsidiaries are foreign-invested enterprises and are subject to laws and regulations applicable to foreign-invested
enterprises as well as various Chinese laws and regulations generally applicable to companies incorporated in China. However, since
these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws,
regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties.
From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since
PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it
may be more difficult to evaluate the outcome of administrative and court proceedings and the level of protection we enjoy than in more
developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which
are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of
any of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of
our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory
environment in China could materially and adversely affect our business and impede our ability to continue our operations.
Our business may be significantly affected by the newly enacted Foreign Investment Law.
On March 15, 2019, the National People’s Congress of China, or the NPC, promulgated the Foreign Investment Law, which has
become effective on January 1, 2020 and replaced three laws regulating foreign investment in China, namely, the PRC Equity Joint
Venture Law, the PRC Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise Law, together with their
implementation rules and ancillary regulations. Since the Foreign Investment Law is newly enacted, uncertainties still exist in relation to
its interpretation and implementation. The Foreign Investment Law does not explicitly classify whether VIEs that are controlled via
contractual arrangements would be deemed as foreign invested enterprises if they are ultimately “controlled” by foreign investors.
However, it has a catch-all provision under definition of “foreign investment” to include investments made by foreign investors in China
through means stipulated by laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still leaves
leeway for future laws, administrative regulations or provisions to provide for contractual arrangements as a form of foreign investment.
There can be no assurance that our contractual arrangements will not be deemed to be in violation of the market access requirements for
foreign investment under the PRC laws and regulations.
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The Foreign Investment Law grants national treatment to foreign invested entities, except for those foreign invested entities that
operate in industries deemed to be either “restricted” or “prohibited” in the “negative list” to be published. Because the “negative list”
has yet been published, it is unclear as to whether it will differ from the 2021 Negative List currently in effect. The Foreign Investment
Law provides that only foreign invested entities operating in foreign restricted or prohibited industries will require entry clearance and
other approvals that are not required by PRC domestic entities or foreign invested entities operating in other industries. In the event that
any VIE through which we operate our business is not treated as domestic investment and our operations carried out through such VIE
are classified in the “restricted” or “prohibited” industry in the “negative list” under the Foreign Investment Law, such contractual
arrangements may be deemed as invalid and illegal, and we may be required to unwind such contractual arrangements and/or dispose of
such business.
Furthermore, if future laws, administrative regulations or provisions mandate further actions to be taken by companies with
respect to existing contractual arrangements, we may face substantial uncertainties as to whether we can complete such actions in a
timely manner, or at all. In addition, the Foreign Investment Law provides that existing foreign invested enterprises established according
to the existing laws regulating foreign investment may maintain their structure and corporate governance within five years after the
implementation of the Foreign Investment Law, which means that we may be required to adjust the structure and corporate governance of
certain of our PRC entities then. Failure to take timely and appropriate measures to cope with any of these or similar regulatory
compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business
operations.
The approval of or the filing with the CSRC or other PRC government authorities may be required in connection with our future
offshore listings and capital raising activities under PRC law, and, if required, we cannot predict whether or for how long we will be
able to obtain such approval or filing.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, requires an
overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC
persons or entities to obtain the approval of China Securities Regulatory Commission, or the CSRC, prior to the listing and trading of
such special purpose vehicle’s securities on an overseas stock exchange. The interpretation and application of the regulations remain
unclear and uncertain. If the CSRC approval is required for any of our offshore listings and capital raising activities, it is uncertain
whether we can or how long it will take us to obtain the approval and, even if we obtain such CSRC approval, such CSRC approval
could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for our offshore listings and capital raising activities if
such approval is required, or a rescission of such CSRC approval is obtained by us, would subject us to sanctions imposed by the CSRC
or other PRC regulatory authorities, which could include fines and penalties on our operations in the PRC, restrictions or limitations on
our ability to pay dividends outside of the PRC, and other forms of sanctions that may materially and adversely affect our business,
financial condition, and results of operations.
On July 6, 2021, the relevant PRC government authorities issued the Opinions on Strictly Cracking Down Illegal Securities
Activities in Accordance with the Law, which called for the enhanced administration over illegal securities activities and supervision of
overseas-listed China-based companies, proposed to revise the relevant regulation governing the overseas issuance and listing of shares
by such companies and clarified the responsibilities of competent domestic industry regulators and government authorities.
On February 17, 2023, the CSRC issued the Overseas Listing Filing Rules, which took effect on March 31, 2023. According to
the Overseas Listing Filing Rules, the issuer or a major domestic operating company designated by the issuer, as the case may be, shall
file with the CSRC, among others, (i) with respect to its follow-on offering in the same foreign market within three business days, after
completion of the follow-on offering, and (ii) with respect to its follow-on offering and listing in other foreign markets within three
business days, after its initial filing of the listing application to the regulator in the place of such intended listing. Non-compliance with
the Overseas Listing Filing Rules or an overseas listing completed in breach of the Overseas Listing Filing Rules may result in a warning
on the relevant domestic companies and a fine of RMB1 million to RMB10 million on them. Furthermore, the supervisors directly
responsible and other directly responsible persons of the domestic enterprises may be warned, and fined between RMB500,000 to
RMB5,000,000. The controlling shareholders or actual controllers of the domestic company which organize or instigate the relevant
illegal acts, or conceal relevant matters resulting in the illegal acts, may be fined between RMB 1 million to RMB10 million.
On February 17, 2023, the CSRC issued the Notice on Administrative Arrangements for the Filing of Domestic Enterprise’s
Overseas Offering and Listing, which stipulates the domestic enterprises like us that have completed overseas listings are not required to
file with the CSRC in accordance with the Overseas Listing Filing Rules immediately, but shall carry out filing procedures as required if
we conduct refinancing or fall within other circumstances that require filing with the CSRC.
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Considering that the Overseas Listing Filing Rules have just been promulgated, there are still some uncertainties about how to
further refine and implement the requirements, which needs to be further guided and clarified by the CSRC and other regulatory
authorities. If we have subsequent filing or reporting matters in the future, such as future offshore listings, refinancing and other capital
raising activities, as well as other major events, including but not limited to the change of control, investigated or punished by overseas
securities regulatory authorities or relevant competent authorities, changing listing status or listing sector, terminating the listing
voluntarily or forcibly, and changing our major business activities, given the substantial uncertainties surrounding the latest CSRC filing
requirements at this stage, we cannot assure you that we will be able to complete the filings or reporting and fully comply with the
relevant new rules and requirements in a timely manner or at all. See “Item 4. Information on the Company—B. Business Overview—
Regulations—M&A Rules and Overseas Listing.”
The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our
offshore listings or future capital raising activities before settlement and delivery of the proceeds hereby. Consequently, if you engage in
market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery
may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we
obtain their approvals or accomplish the required filing or other regulatory procedures for our offshore listings or future capital raising
activities, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a
waiver. Any uncertainties or negative publicity regarding such approval, filing or other requirements could materially and adversely
affect our business, prospects, financial condition, reputation, and the proceeds of the shares.
We may be adversely affected by the complexity, uncertainties and changes in PRC regulations on internet-related business,
automotive businesses and other business carried out by our PRC subsidiaries and VIEs.
We operate in the automotive and internet industry, both of which are extensively regulated by the PRC government. For
example, the PRC government imposes foreign ownership restrictions and licensing and permit requirements for companies in the
internet industry. See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on Foreign Investment
in China” and “—Regulations on Value-added Telecommunications Services.” Manufacturing of our vehicles is subject to extensive
regulations in China. See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations and Approvals
Covering the Manufacturing of New Energy Vehicles.” These laws and regulations are relatively new and evolving, and their
interpretation and enforcement involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine
what actions or omissions may be deemed to be in violation of applicable laws and regulations and furthermore, we cannot assure you
that we have complied or will be able to comply with all applicable laws at all times. Consequently, we could face the risks of being
subject to governmental investigations, orders by the competent authorities for rectification, administrative penalties or other legal
proceedings.
Currently we rely on the contractual arrangements with Beijing NIO and its shareholders to hold an ICP license, and separately
own the relevant domain names and trademarks in connection with our internet services and operate our website and mobile application
through NIO Co., Ltd. Our internet services may be treated as a value-added telecommunications business. If so, we may be required to
transfer the domain names, trademark and the operations of the internet services from NIO Co., Ltd. to Beijing NIO, and we may also be
subject to administrative penalties. We rely on the contractual arrangements with Anhui NIO DT and its shareholders to hold an
insurance brokerage license, and we intend to perform insurance brokerage services which are mainly vehicle-related and property-
related through Anhui NIO DT in the future. Anhui NIO AT is expected to apply for requisite licenses for certain supporting functions
during the development of our autonomous driving technology. Any challenge to the validity of these arrangements may significantly
disrupt our business, subject us to sanctions, compromise enforceability of our contractual arrangements, or have other harmful effects on
us. It is uncertain, (i) if Beijing NIO or NIO Co., Ltd. will be required to obtain a separate operating license for certain services carried
out by us through our mobile application in addition to the valued-added telecommunications business operating licenses for internet
content provision services, and if Beijing NIO will be required to supplement our current ICP license in the future, (ii) if Anhui NIO DT,
its subsidiary or NIO China will be required to obtain a separate operating license for certain services carried out by us in addition to the
insurance brokerage license, and if Anhui NIO DT or its subsidiary will be required to supplement our current insurance brokerage
license in the future; and (iii) if Anhui NIO AT or Anhui NIO AD will be required to obtain a separate operating license for certain
services carried out by us in addition to certain required licenses to be applied for, and if Anhui NIO AT will be required to supplement
certain required licenses to be applied for in the future.
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In addition, our mobile applications are also regulated by the Administrative Provisions on Information Services of Mobile
Internet Applications, or the APP Provisions, promulgated by CAC in June 2022, which became effective on August 1, 2022 and
replaces its predecessor regulation. According to the APP Provisions, the providers of mobile applications shall be responsible for the
information contents presented and shall not produce and disseminate illegal information and shall consciously prevent and resist
unhealthy information. However, we cannot assure that all the information or content displayed on, retrieved from or linked to our
mobile applications complies with the requirements of the APP Provisions at all times. If our mobile applications were found to be
violating the APP Provisions, we may be subject to administrative penalties, including warning, service suspension or removal of our
mobile applications from the relevant mobile application store, which may materially and adversely affect our business and operating
results.
The interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies
relating to the internet industry, particularly the policies relating to value-added telecommunications services, have created substantial
uncertainties regarding the legality of existing and future foreign investments in the businesses and activities of internet businesses in
China, including our business.
Several PRC regulatory authorities, such as the SAMR, the NDRC, the MIIT, and the MOFCOM, oversee different aspects of
our operations, and we are required to obtain a wide range of government approvals, licenses, permits and registrations in connection
with our operations. For example, certain filings must be made by automobile dealers through the information system for the national
automobile circulation operated by the relevant commerce department within 90 days after the receipt of a business license. Furthermore,
the NEV industry is relatively new in China, and the PRC government has not adopted a clear regulatory framework to regulate the
industry. As some of the laws, rules and regulations that we may be subject to were primarily enacted with a view toward application to
ICE vehicles, or are relatively new, there is significant uncertainty regarding their interpretation and application with respect to our
business. For example, it remains unclear under PRC laws whether our charging vans need to be registered with related local traffic
management authorities or obtain transportation operation licenses for their services, and whether we would be required to obtain any
particular permit or license to be qualified to provide our charging services in cooperation with third-party charging stations. In addition,
the PRC government may enact new laws and regulations that require additional licenses, permits, approvals and/or registrations for the
operation of any of our existing or future business. As a result, we cannot assure you that we have all the permits, licenses, registrations,
approvals and/or business license covering the sufficient scope of business required for our business or that we will be able to obtain,
maintain or renew permits, licenses, registrations, approvals and/or business license covering sufficient scope of business in a timely
manner or at all.
The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in
our operations and the value of our ADSs.
We conduct our business primarily in China. Our operations in China are governed by PRC laws and regulations. The PRC
government has significant oversight and discretion over the conduct of our business, and may intervene or influence our operations as
the government deems appropriate to advance regulatory and societal goals and policy positions. The PRC government has recently
published new policies that significantly affected certain industries and we cannot rule out the possibility that it will in the future release
regulations or policies that directly or indirectly affect our industry or require us to seek additional permission to continue our operations,
which could result in a material adverse change in our operation and/or the value of our ADSs. Therefore, investors of our company and
our business face potential uncertainty from actions taken by the PRC government affecting our business.
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We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing
requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material
and adverse effect on our ability to conduct our business.
We are a holding company, and we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our
cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and
service any debt we may incur. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their
accumulated after-tax profits upon satisfaction of relevant statutory conditions and procedures, if any, determined in accordance with
Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-
tax profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. As of
December 31, 2022, most of our PRC subsidiaries and the VIEs had not made appropriations to statutory reserves as our PRC
subsidiaries and the VIEs reported accumulated loss. For a detailed discussion of applicable PRC regulations governing distribution of
dividends, see “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on Dividend Distribution.”
Additionally, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their
ability to pay dividends or make other distributions to us. Furthermore, the PRC tax authorities may require our subsidiaries to adjust
their taxable income under the contractual arrangements they currently have in place with the VIEs in a manner that would materially
and adversely affect their ability to pay dividends and other distributions to us. See “Risks Related to Our Corporate Structure—Our
contractual arrangements with the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or the
VIEs owe additional taxes, which could negatively affect our financial condition.” In addition, the incurrence of indebtedness by our
PRC subsidiaries could result in operating and financing covenants and undertakings to creditors that would restrict the ability of our
PRC subsidiaries to pay dividends to us.
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and
adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise
fund and conduct our business. See “—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification
could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.”
Increases in labor costs and enforcement of stricter labor laws and regulations in the PRC may adversely affect our business and our
profitability.
China’s overall economy and the average wage in China have increased in recent years and are expected to grow. The average
wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits,
will increase. Unless we are able to pass on these increased labor costs to those who pay for our services, our profitability and results of
operations may be materially and adversely affected.
In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our
employees, limitation with respect to utilization of labor dispatching, applying for foreigner work permits, labor protection and labor
condition and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury
insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees.
Pursuant to the PRC Labor Contract Law and its implementation rules, employers are subject to stricter requirements in terms of signing
labor contracts, minimum wages, paying remuneration, determining the term of employee’s probation and unilaterally terminating labor
contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the
PRC Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective
manner, which could adversely affect our business and results of operations.
Companies registered and operating in China are required under the PRC Social Insurance Law (latest amended in 2018) and
the Regulations on the Administration of Housing Funds (latest amended in 2019) to, apply for social insurance registration and housing
fund deposit registration within 30 days of their establishment, and to pay for their employees different social insurance including
pension insurance, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to the extent
required by law. However, certain of our PRC subsidiaries and VIEs that do not hire any employees and are not a party to any
employment agreement, have not applied for and obtained such registration, and instead of paying the social insurance payment on their
own for their employees, certain of our PRC subsidiaries and VIEs use third-party agencies to pay in the name of such agency. We could
be subject to orders by the competent labor authorities for rectification and failure to comply with the orders may further subject us to
administrative fines.
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As the interpretation and implementation of labor-related laws and regulations are still evolving, our employment practices may
violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. We cannot
assure you that we have complied or will be able to comply with all labor-related law and regulations including those relating to
obligations to make social insurance payments and contribute to the housing provident funds. If we are deemed to have violated relevant
labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial
condition and results of operations will be adversely affected.
Furthermore, in order to control labor costs, we conducted a series of organizational restructuring to cut headcount in 2019,
which we believe has negatively affected our reputation, brand image and our ability to retain the remaining qualified staff and skilled
employees. We could undertake an organizational restructuring again in the future, the occurrence of which will pose negative
implications on our competitive position, cost us qualified employees and subject us to potential employment lawsuits. Any of the above
would negatively affect our business, financial condition and results of operations.
Fluctuations in exchange rates could have a material and adverse effect on our results of operations.
The conversion of RMB into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China, or
the PBOC. The RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. The value of RMB against the U.S.
dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies,
among other things. We cannot assure you that RMB will not appreciate or depreciate significantly in value against the U.S. dollar in the
future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between RMB and
the U.S. dollar in the future.
Any significant appreciation or depreciation of RMB may materially and adversely affect our revenues, earnings and financial
position, and the value of, and any dividends payable on, our ADSs in U.S. dollars. For example, to the extent that we need to convert
U.S. dollars we receive into RMB to pay our operating expenses, appreciation of RMB against the U.S. dollar would have an adverse
effect on the RMB amount we would receive from the conversion. Conversely, a significant depreciation of RMB against the U.S. dollar
may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our ADSs.
Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. While we have entered
into and may continue to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited
and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC
exchange control regulations that restrict our ability to convert RMB into foreign currency. As a result, fluctuations in exchange rates
may have a material adverse effect on your investment.
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of
currency conversion may delay or prevent us from using the proceeds of our offshore equity offerings to make loans to or make
additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to
fund and expand our business.
Under PRC laws and regulations, we are permitted to utilize the proceeds of any financing outside China to fund our PRC
subsidiaries by making loans to or additional capital contributions to our PRC subsidiaries, subject to applicable government registration,
statutory limitations on amount and approval requirements. For more details, see “Item 4. Information on the Company—B. Business
Overview—Regulations—Regulations on Foreign Exchange.” These PRC laws and regulations may significantly limit our ability to use
Renminbi converted from the net proceeds of any financing outside China to fund the establishment of new entities in China by our PRC
subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiaries, or to establish new VIEs in China.
Moreover, we cannot assure you that we will be able to complete the necessary registrations or obtain the necessary government
approvals on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions by us to our PRC
subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we received or expect to
receive from our offshore offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could
materially and adversely affect our liquidity and our ability to fund and expand our business.
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On December 26, 2017, the NDRC issued the Management Rules for Overseas Investment by Enterprises, or Order 11. On
February 11, 2018, the Catalog on Overseas Investment in Sensitive Industries (2018 Edition), or the Sensitive Industries List was
promulgated. Overseas investment governed by Order 11 refers to the investment activities conducted by an enterprise located in the
territory of China either directly or via an overseas enterprise under its control through making investment with assets and equities or
providing financing or guarantees in order to obtain overseas ownership, control, management rights and other related interests, and
overseas investment by a PRC individual through overseas enterprises under his/her control is also subject to Order 11. According to
Order 11, before being conducted, any overseas investment in a sensitive industry or any direct investment by a Chinese enterprise in a
non-sensitive industry but with an investment amount over US$300 million requires approval from, or filing with, the NDRC, and for
those non-sensitive investments indirectly by Chinese investors (including PRC individuals) with investment amounts over US$300
million need to be reported. However, uncertainties remain with respect to the interpretation and application of Order 11, we are not sure
whether our using of proceeds will be subject to Order 11. If we fail to obtain the approval, complete the filing or report our overseas
investment with our proceeds (as the case may be) in a timely manner provided that Order 11 is applicable, we may be forced to suspend
or cease our investment, or be subject to penalties or other liabilities, which could materially and adversely affect our business, financial
condition and prospects.
Governmental control of currency conversion may limit our ability to utilize our revenues effectively.
The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the
remittance of currency out of China. Under existing PRC foreign exchange regulations, payments of current account items, such as profit
distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from
the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, approval from or
registration with appropriate governmental authorities is required where Renminbi is to be converted into a foreign currency and remitted
out of China to pay capital expenses, such as the repayment of loans denominated in foreign currencies. See “Item 4. Information on the
Company—B. Business Overview—Regulations—Regulations on Foreign Exchange.”
Since 2016, the PRC government has further tightened its foreign exchange policies and enhanced its scrutiny of major
outbound capital movement. More restrictions and a substantial vetting process have been put in place by SAFE to regulate cross-border
transactions falling under the capital account. The PRC government may also restrict access in the future to foreign currencies for current
account transactions, at its discretion. We receive substantially all of our revenues in RMB. If the foreign exchange control system
prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in
foreign currencies to our shareholders, including holders of our ADSs.
PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their
registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties
under PRC law.
SAFE requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or
control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities
must update their SAFE registrations when the offshore special purpose vehicle undergoes certain material events. See “Item 4.
Information on the Company—B. Business Overview—Regulations—Regulations on Foreign Exchange—Offshore Investment.”
If our shareholders who are PRC residents or entities do not complete their registration with the local SAFE branches, our PRC
subsidiaries may be prohibited from distributing their profits and any proceeds from any reduction in capital, share transfer or liquidation
to us, and we may be restricted in our ability to contribute additional capital to our PRC subsidiaries. Moreover, failure to comply with
SAFE registration requirements could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.
However, we may not be informed of the identities of all the PRC residents or entities holding direct or indirect interests in our
company, nor can we compel our beneficial owners to comply with SAFE registration requirements. As a result, we cannot assure you
that all of our shareholders or beneficial owners who are PRC residents or entities have complied with, and will in the future make or
obtain any applicable registrations or approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to
comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to
fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make
distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.
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China’s M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of PRC companies by
foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
A number of PRC laws and regulations have established procedures and requirements that could make merger and acquisition
activities in China by foreign investors more time-consuming and complex. In addition to the Anti-Monopoly Law of China itself, these
include the Rules on Acquisition of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC governmental
and regulatory agencies in 2006 and amended in 2009, and the Rules of the Ministry of Commerce on Implementation of Security
Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the Security Review Rules, promulgated
in 2011. These laws and regulations impose requirements in some instances that the MOFCOM be notified in advance of any change-of-
control transaction in which a foreign investor takes control of a PRC domestic enterprise. In addition, the Anti-Monopoly Law of China
requires that the MOFCOM be notified in advance of any concentration of undertaking if certain thresholds are triggered. Moreover, the
Security Review Rules specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and
mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national
security” concerns are subject to strict review by the MOFCOM, and prohibit any attempt to bypass a security review, including by
structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring
complementary businesses. Complying with the requirements of the relevant regulations to complete such transactions could be time-
consuming, and any required approval processes, including approval from the MOFCOM, may delay or inhibit our ability to complete
such transactions, which could affect our ability to expand our business or maintain our market share.
Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject
the PRC plan participants or us to fines and other legal or administrative sanctions.
Under SAFE regulations, PRC residents who participate in a stock incentive plan in an overseas publicly listed company are
required to register with SAFE or its local branches and complete certain other procedures. See “Item 4. Information on the Company—
B. Business Overview—Regulations—Regulations on Employment and Social Welfare—Employee Stock Incentive Plan.” We and our
PRC resident employees who participate in our share incentive plans are subject to these regulations since we became a public company
listed in the United States. If we or any of these PRC resident employees fail to comply with these regulations, we or such employees
may be subject to fines and other legal or administrative sanctions. We also face regulatory uncertainties that could restrict our ability to
adopt additional incentive plans for our directors, executive officers and employees under PRC law.
Discontinuation of any of the preferential tax treatments and government subsidies or imposition of any additional taxes and
surcharges could adversely affect our financial condition and results of operations.
Our PRC subsidiaries currently benefit from a number of preferential tax treatments. For example, one of our VIEs, Anhui NIO
AT, is entitled to enjoy, after completing certain application formalities, a 15% preferential enterprise income tax from 2022 as it has
been qualified as a “High and New Technology Enterprise” under the PRC Enterprise Income Tax Law and related regulations. The
discontinuation of any of the preferential income tax treatment that we currently enjoy could have a material and adverse effect on our
result of operations and financial condition. We cannot assure you that we will be able to maintain or lower our current effective tax rate
in the future.
In addition, our PRC subsidiaries have received various financial subsidies from PRC local government authorities. The
financial subsidies result from discretionary incentives and policies adopted by PRC local government authorities. Local governments
may decide to change or discontinue such financial subsidies at any time. The discontinuation of such financial subsidies or imposition of
any additional taxes could adversely affect our financial condition and results of operations.
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If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax
consequences to us and our non-PRC shareholders or ADS holders.
Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a
“de facto management body” within the PRC is considered a PRC resident enterprise. The implementation rules define the term “de facto
management body” as the body that exercises full and substantial control over and overall management of the business, productions,
personnel, accounts and properties of an enterprise. In 2009, the State Taxation Administration, or the STA, issued a circular, known as
Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled
enterprise that is incorporated offshore is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC
enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, the criteria set forth in the circular
may reflect the STA’s general position on how the “de facto management body” test should be applied in determining the tax resident
status of all offshore enterprises. According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC
enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject
to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-
day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or
are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records,
company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board
members or senior executives habitually reside in the PRC.
We believe that none of our entities outside of China is a PRC resident enterprise for PRC tax purposes. However, the tax
resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the
interpretation of the term “de facto management body.” If the PRC tax authorities determine that we are a PRC resident enterprise for
enterprise income tax purposes, we will be subject to the enterprise income tax on our global income at the rate of 25% and we will be
required to comply with PRC enterprise income tax reporting obligations. In addition, we may be required to withhold a 10%
withholding tax from interest or dividends we pay to our shareholders that are non-PRC resident enterprises, including the holders of our
ADSs. In addition, non-PRC resident enterprise shareholders (including our ADS holders) may be subject to PRC tax at a rate of 10% on
gains realized on the sale or other disposition of our ADSs or ordinary shares, if such income is treated as sourced from within the PRC.
Furthermore, if PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, interest or
dividends paid to our non-PRC individual shareholders (including our ADS holders) and any gain realized on the transfer of the ADSs or
ordinary shares by such holders may be subject to PRC tax at a rate of 20% (which, in the case of interest or dividends, may be withheld
at source by us), if such gains are deemed to be from PRC sources. These rates may be reduced by an applicable tax treaty, but it is
unclear whether our non-PRC shareholders would be able to claim the benefits of any tax treaties between their country of tax residence
and the PRC in the event that we are treated as a PRC resident enterprise.
We may not be able to obtain certain benefits under relevant tax treaties on dividends paid by our PRC subsidiaries to us through our
Hong Kong subsidiary.
We are a holding company incorporated under the laws of the Cayman Islands and as such rely on dividends and other
distributions on equity from our PRC subsidiaries to satisfy part of our liquidity requirements. Pursuant to the PRC Enterprise Income
Tax Law, a withholding tax rate of 10% currently applies to dividends paid by a PRC “resident enterprise” to a foreign enterprise
investor, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for preferential tax
treatment. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance
of Double Taxation and Tax Evasion on Income, such withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise
owns no less than 25% of a PRC enterprise. Furthermore, the Administrative Measures for Non-Resident Enterprises to Enjoy
Treatments under Treaties, which became effective in January 2020, require non-resident enterprises to determine whether they are
qualified to enjoy the preferential tax treatment under the tax treaties and file relevant report and materials with the tax authorities. There
are also other conditions for enjoying the reduced withholding tax rate according to other relevant tax rules and regulations. See “Item 5.
Operating and Financial Review and Prospects—A. Operating Results— Taxation—PRC.” As of December 31, 2022, most of our
subsidiaries and VIEs located in the PRC reported accumulated loss and therefore they had no retained earnings for offshore distribution.
In the future, we intend to re-invest all earnings, if any, generated from our PRC subsidiaries for the operation and expansion of our
business in China. Should our tax policy change to allow for offshore distribution of our earnings, we would be subject to a significant
withholding tax. Our determination regarding our qualification to enjoy the preferential tax treatment could be challenged by the relevant
tax authority and we may not be able to complete the necessary filings with the relevant tax authority and enjoy the preferential
withholding tax rate of 5% under the arrangement with respect to dividends to be paid by our PRC subsidiaries to our Hong Kong
subsidiary.
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We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding
companies.
In February 2015, the STA issued the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC
Resident Enterprises, or Circular 7. Circular 7 extends its tax jurisdiction to not only indirect transfers but also transactions involving
transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company. In addition, Circular 7 provides
certain criteria on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and
the purchase and sale of equity through a public securities market. Circular 7 also brings challenges to both the foreign transferor and
transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an
“indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the
non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the
relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence
of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding
or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the
transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10%
for the transfer of equity interests in a PRC resident enterprise. On October 17, 2017, the STA issued Circular on Issues of Tax
Withholding regarding Non-PRC Resident Enterprise Income Tax, or Circular 37, which came into effect on December 1, 2017 and was
amended on June 15, 2018. Circular 37 further clarifies the practice and procedure of the withholding of nonresident enterprise income
tax.
We face uncertainties on the reporting and consequences of future private equity financing transactions, share exchanges or
other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises. The PRC tax
authorities may pursue such non-PRC resident enterprises with respect to a filing or the transferees with respect to withholding
obligations, and request our PRC subsidiaries to assist in the filing. As a result, we and non-PRC resident enterprises in such transactions
may become at risk of being subject to filing obligations or being taxed under Circular 7 and Circular 37, and may be required to expend
valuable resources to comply with them or to establish that we and our non-PRC resident enterprises should not be taxed under these
regulations, which may have a material adverse effect on our financial condition and results of operations.
If the custodians or authorized users of controlling non-tangible assets of our company, including our corporate chops and seals, fail
to fulfill their responsibilities, or misappropriate or misuse these assets, our business and operations could be materially and
adversely affected.
Under PRC law, legal documents for corporate transactions are executed using the chops or seal of the signing entity or with the
signature of a legal representative whose designation is registered and filed with the relevant branch of the SAMR.
Although we usually utilize chops to enter into contracts, the designated legal representatives of each of our PRC subsidiaries
and VIEs have the apparent authority to enter into contracts on behalf of such entities without chops and bind such entities. All
designated legal representatives of our PRC subsidiaries and VIEs are members of our senior management team who have signed
employment agreements with us or our PRC subsidiaries and VIEs under which they agree to abide by various duties they owe to us. In
order to maintain the physical security of our chops and chops of our PRC entities, we generally store these items in secured locations
accessible only by the authorized personnel in the legal or finance department of each of our subsidiaries and VIEs. Although we monitor
such authorized personnel, there is no assurance such procedures will prevent all instances of abuse or negligence. Accordingly, if any of
our authorized personnel misuse or misappropriate our corporate chops or seals, we could encounter difficulties in maintaining control
over the relevant entities and experience significant disruption to our operations. If a designated legal representative obtains control of
the chops in an effort to obtain control over any of our PRC subsidiaries or VIEs, we or our PRC subsidiaries or VIEs would need to pass
a new shareholders or board resolution to designate a new legal representative and we would need to take legal action to seek the return
of the chops, apply for new chops with the relevant authorities, or otherwise seek legal redress for the violation of the representative’s
fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular
business. In addition, the affected entity may not be able to recover corporate assets that are sold or transferred out of our control in the
event of such a misappropriation if a transferee relies on the apparent authority of the representative and acts in good faith.
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Our leased property interest or entitlement to other facilities or assets may be defective or subject to lien and our right to lease, own or
use the properties affected by such defects or lien challenged, which could cause significant disruption to our business.
Under PRC laws, all lease agreements are required to be registered with the local housing authorities. We presently lease several
premises in China, some of which have not completed the registration of the ownership rights or the registration of our leases with the
relevant authorities. Failure to complete these required registrations may expose our landlords, lessors and us to potential monetary fines.
If these registrations are not obtained in a timely manner or at all, we may be subject to monetary fines or may have to relocate our
offices and incur the associated losses.
Some of the ownership certificates or other similar proof of certain leased properties have not been provided to us by the
relevant lessors. Therefore, we cannot assure you that such lessors are entitled to lease the relevant real properties to us. If the lessors are
not entitled to lease the real properties to us and the owners of such real properties decline to ratify the lease agreements between us and
the respective lessors, we may not be able to enforce our rights to lease such properties under the respective lease agreements against the
owners. If our lease agreements are claimed as null and void by third parties who are the real owners of such leased real properties, we
could be required to vacate the properties, in the event of which we could only initiate the claim against the lessors under relevant lease
agreements for indemnities for their breach of the relevant leasing agreements. In addition, we may not be able to renew our existing
lease agreements before their expiration dates, in which case we may be required to vacate the properties. We cannot assure you that
suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we are unable to relocate our
operations in a timely manner, our operations may be adversely affected.
Some of our PRC subsidiaries have incurred or will incur indebtedness and may, in connection therewith, create mortgage,
pledge or other lien over substantive operating assets, facilities or equity interests of certain PRC subsidiaries as guarantee to their
repayment of indebtedness or as counter guarantee to third-party guarantors which provide guarantee to our PRC subsidiaries’ repayment
of indebtedness. In the event that the relevant PRC subsidiaries fail to perform their repayment obligations or such guarantors perform
their guarantee obligations, claims may be raised to our substantive operating assets, facilities or equity interests of the PRC subsidiaries
in question. If we cannot continue to own or use such assets, facilities or equity interests, our operation may be adversely affected.
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 Stock Exchange.
The trading of our Class A ordinary shares on the Hong Kong Stock Exchange commenced on March 10, 2022 under the stock
code “9866.” As a company listed on the Hong Kong Stock Exchange pursuant to Chapter 19C of the Hong Kong Listing Rules, we are
not subject to certain provisions of the Hong Kong Listing Rules pursuant to Rule 19C.11, including, among others, rules on notifiable
transactions, connected transactions, share option schemes, content of financial statements as well as certain other continuing obligations.
In addition, in connection with the listing of our Class A ordinary shares on the Hong Kong Stock Exchange, we have applied for a
number of waivers and/or exemptions from strict compliance with the Hong Kong Listing Rules, the Codes on Takeovers and Mergers
and Shares Buy-backs issued by the SFC, or the Takeovers Codes, and the Securities and Futures Ordinance, or the SFO. As a result, we
will adopt different practices as to those matters as compared with other companies listed on the Hong Kong Stock Exchange that do not
enjoy those exemptions or waivers.
Our articles of association are specific to us and include certain provisions that may be different from the requirements under the
Hong Kong Listing Rules and common practices in Hong Kong. In particular, in our amended articles of associations put forth in the first
annual general meeting after the listing of our Class A ordinary shares on the Hong Kong Stock Exchange, or the First AGM, we refer to
Relevant Period as the period commencing from the date on which any of our Class A ordinary shares first become secondary listed on
the Hong Kong Stock Exchange to and including the date immediately before the day which the secondary listing is withdrawn from the
Hong Kong Stock Exchange. For example, in order to comply with applicable Hong Kong Listing Rules, during the Relevant Period, (i)
NIO Users Trust will not have any director nomination right; (ii) our Company shall have only one class of shares with enhanced or
weighted voting rights; (iii) our directors shall not have the power to, amongst others, authorize share split or designate a new share class
with enhanced or weighted voting rights; and (iv) certain restrictions on the weighted voting right structure, or WVR structure, of our
company under Chapter 8A of the Hong Kong Listing Rules shall be applicable, such as, amongst others, no further increase in the
proportion of WVR shares, that only a director or a director holding vehicle is permitted to hold WVR shares and automatic conversion
of WVR shares into Class A ordinary shares under certain circumstances.
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Notwithstanding the above and at any time after the Relevant Period, the provisions which are subject to the Relevant Period
will continue to apply in the circumstances where the Company has a change of listing status on the Hong Kong Stock Exchange other
than in the case where the secondary listing of the Company is withdrawn from the Hong Kong Stock Exchange pursuant to the
applicable Hong Kong Listing Rules.
Given certain shareholder protection under the Hong Kong Listing Rules will only be applicable during the Relevant Period, our
investors may be afforded less protection after the Relevant Period under our amended articles of association adopted in the First AGM
as compared with other companies secondary listed in Hong Kong.
We may only cease to be secondary listed under Chapter 19C of the Hong Kong Listing Rules under one of the following
situations:
● withdrawal, in the case where we are primary listed on another stock exchange and voluntarily withdraw our secondary
listing on the Hong Kong Stock Exchange;
● migration of the majority of trading to the Hong Kong Stock Exchange’s markets, in the case where the majority of trading
in our listed shares migrates to the Hong Kong Stock Exchange’s markets on a permanent basis;
● primary conversion, i.e., our voluntary conversion to a dual-primary listing on the Hong Kong Stock Exchange;
● overseas de-listing, where our shares or depositary receipts issued on our shares cease to be listed on the stock exchange
which we are primary listed;
● if the Hong Kong Stock Exchange cancels the listing of our securities; and
● if Securities and Futures Commission of Hong Kong, or SFC directs the Hong Kong Stock Exchange to cancel the listing
of our securities.
The scenarios under which we may cease to be secondary listed on the Hong Kong Stock Exchange are subject to the changing
market conditions, our listing or de-listing in other jurisdictions, our compliance with the listing rules of the Hong Kong Stock Exchange
and other factors beyond our control. As a result, there are substantial uncertainties relating to applicability of the shareholders’ rights
and protection under the aforementioned provisions of our amended articles of association put forth in the First AGM particularly in the
case where the Company de-lists from the Hong Kong Stock Exchange.
As we are listed as a Non-Grandfathered Greater China Issuer pursuant to Chapter 19C of the Hong Kong Listing Rules, our
articles of association must comply with the requirements of the Hong Kong Listing Rules unless waived by the Hong Kong Stock
Exchange. We have put forth resolutions to our shareholders at our first general meeting convened on August 25, 2022 to amend certain
provisions of our articles in order to comply with the Hong Kong Listing Rules.
Furthermore, if 55% or more of the total worldwide trading volume, by dollar value, of our Class A ordinary shares and ADSs
over our most recent fiscal year takes place on the Hong Kong Stock Exchange, the Hong Kong Stock Exchange will regard us as having
a dual primary listing in Hong Kong and we will no longer enjoy certain exemptions or waivers from strict compliance with the
requirements under the Hong Kong Listing Rules, the Takeovers Codes and the SFO, which could result in us having to amend our
corporate structure and articles of association and we may incur of incremental compliance costs.
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If we change the listing venue of our securities, including delisting from the New York Stock Exchange, the Hong Kong Stock
Exchange, or the Singapore Exchange, you may lose the shareholder protection mechanisms afforded under the regulatory regimes
of the applicable securities exchange.
As a company listed on the New York Stock Exchange, the Hong Kong Stock Exchange and the Singapore Exchange, we are
subject to various listing standards and requirements that are aimed at protecting your rights as shareholders of our company, subject to
certain permitted exceptions applicable to foreign companies. For example, after our listing on the Hong Kong Stock Exchange, our
memorandum and articles of association requires that there should only be one class of shares with enhanced voting rights, and that
certain reserved matters under the Hong Kong Listing Rules are required to be voted on a one vote per share basis at the general
meetings. In the event that we reduce the number of shares in issue, the holders of WVR shares shall reduce their voting rights in the
Company proportionately through a conversion of a portion of their Class C shares or otherwise. If we choose to change the listing venue
of our securities, including delisting from either exchanges, you may lose the shareholder protection mechanisms afforded under the
regulatory regimes of the applicable securities exchange. In particular, various factors will be taken into consideration by the Company in
relation to the circumstances under which it may be considered not desirable or viable for the shares to remain listed on a certain stock
exchange, such as the then regulatory environment of the listing venue, whether the additional compliance burden arisen by remaining
listed in a particular stock exchange will be unduly burdensome for the Company to further its interest, realize its vision or implementing
certain business plans.
The trading prices of our listed securities have been and are likely to continue to be, volatile, which could result in substantial losses
to investors.
The trading prices of our listed securities have been and are likely to continue to be volatile and could fluctuate widely in
response to a variety of factors, many of which are beyond our control. For example, in 2022, the trading price of our ADSs ranged from
a low of US$9.25 to a high of US$33.47; the trading price of our Class A ordinary shares, from March 10, 2022, when our Class A
ordinary shares commenced trading on the Hong Kong Stock Exchange, to the end of 2022, ranged from a low of HK$70.35 to a high of
HK$193.50. The trading price of our Class A ordinary shares, likewise, have been and may continue to be volatile for similar or different
reasons. The market price for our listed securities may continue to be volatile and subject to wide fluctuations in response to factors
including, but not limited to, the following:
● actual or anticipated fluctuations in our quarterly results of operations and cash flows;
● changes in financial estimates by securities research analysts;
● conditions in automotive markets;
● changes in the operating performance or market valuations of other automotive companies;
● announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital
commitments;
● addition or departure of key personnel;
● fluctuations of exchange rates between RMB and the U.S. dollar;
● litigation, government investigation or other legal or regulatory proceeding;
● release of lock-up and other transfer restrictions on our Class A ordinary shares or ADSs, issuance of ADSs or ordinary
shares upon conversion of the convertible notes we issued, or any ordinary shares or sales of additional ADSs;
● any actual or alleged illegal acts of our shareholders or management;
● any share repurchase program; and
● general economic or political conditions in China or elsewhere in the world.
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Any of these factors may result in large and sudden changes in the volume and price at which our Class A ordinary shares
and/or ADSs will trade.
In addition, the stock market in general, and the market prices for companies with operations in China in particular, have
experienced volatility that often has been unrelated to the operating performance of such companies. The securities of some China-based
companies that have listed their securities in the United States have experienced significant volatility since their initial public offerings in
recent years, including, in some cases, substantial declines in the trading prices of their securities. The trading performances of these
companies’ securities after their offerings may affect the attitudes of investors towards Chinese companies listed in the United States in
general, which consequently may impact the trading performance of our Class A ordinary shares and/or ADSs, regardless of our actual
operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent
accounting, corporate structure or other matters of other Chinese companies may also negatively affect the attitudes of investors towards
Chinese companies in general, including us, regardless of whether we have engaged in any inappropriate activities. In particular, the
global financial crisis and the ensuing economic recessions in many countries have contributed and may continue to contribute to
extreme volatility in the global stock markets. These broad market and industry fluctuations may adversely affect the market price of our
Class A ordinary shares and/or ADSs. Volatility or a lack of positive performance in our Class A ordinary shares and/or ADSs price may
also adversely affect our ability to retain key employees, most of whom have been granted options or other equity incentives.
If securities or industry analysts do not publish research or reports about our business, or if they adversely change their
recommendations regarding our Class A ordinary shares and/or ADSs, the market price for our Class A ordinary shares and/or ADSs
and trading volume could decline.
The trading market for our Class A ordinary shares and/or ADSs will be influenced by research or reports that industry or
securities analysts publish about our business. If one or more analysts who cover us downgrade our Class A ordinary shares and/or
ADSs, the market price for our Class A ordinary shares and/or ADSs would likely decline. If one or more of these analysts cease to cover
us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price
or trading volume for our Class A ordinary shares and/or ADSs to decline.
Our dual-class voting structure will limit the holders of our Class A ordinary shares and ADSs to influence corporate matters,
provide certain shareholders of ours with substantial influence and could discourage others from pursuing any change of control
transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.
We had historically adopted a triple-class voting structure such that our ordinary shares consisted of Class A ordinary shares,
Class B ordinary shares and Class C ordinary shares. Upon the listing of our Class A ordinary shares on the Hong Kong Stock Exchange,
all of our Class B ordinary shares, which used to be beneficially owned by Tencent entities, namely, Image Frame Investment (HK)
Limited and Mount Putuo Investment Limited, were converted to Class A ordinary shares pursuant to the conversion notice delivered by
the relevant shareholders. The shareholding structure of Class B ordinary shares and provisions related to Class B ordinary shares have
been removed in our thirteenth amended and restated memorandum and articles of association, approved by our shareholders at the
annual general meeting held on August 25, 2022. Currently, our ordinary shares consist of Class A ordinary shares and Class C ordinary
shares. Holders of Class A ordinary shares and Class C ordinary shares have the same rights other than voting and conversion rights.
Each holder of our Class A ordinary shares is entitled to one vote per share, and each holder of our Class C ordinary shares is entitled to
eight votes per share on all matters submitted to them for a vote. Our Class A ordinary shares and Class C ordinary shares vote together
as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Each Class C
ordinary share is convertible into one Class A ordinary share, whereas Class A ordinary shares are not convertible into Class C ordinary
shares under any circumstances. Upon any transfer of Class C ordinary shares by a holder thereof to any person or entity which is not an
affiliate of such holder, such Class C ordinary shares are automatically and immediately converted into the equal number of Class A
ordinary shares.
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As of the date of this annual report, Mr. Bin Li, our founder, chairman and chief executive officer, together with his affiliates,
beneficially own all of our issued Class C ordinary shares. Due to the disparate voting powers associated with our multi classes of
ordinary shares, Mr. Li has considerable influence over important corporate matters. As of February 28, 2023, Mr. Li beneficially owned
approximately 44.2% of the aggregate voting power of our company through mobike Global Ltd. and Originalwish Limited, companies
wholly owned by Mr. Li, and through NIO Users Limited, a holding company ultimately controlled by Mr. Li. Mr. Li has considerable
influence over matters requiring shareholder approval, including electing directors and approving material mergers, acquisitions or other
business combination transactions. This concentrated control will limit the ability of the holders of our Class A ordinary shares and
ADSs to influence corporate matters and could also discourage others from pursuing any potential merger, takeover or other change of
control transaction, which could have the effect of depriving the holders of our Class A ordinary shares and our ADSs of the opportunity
to sell their shares at a premium over the prevailing market price. Moreover, Mr. Li may increase the concentration of his voting power
and/or share ownership in the future, which may, among other consequences, decrease the liquidity in our Class A ordinary shares and
ADSs.
Techniques employed by short sellers may drive down the market price of our ADSs.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the
intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the
value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects
to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many
short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order
to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the
past, led to selling of shares in the market.
Public companies listed in the United States that have a substantial majority of their operations in China have been the subject
of short selling. Much of the scrutiny and negative publicity have centered on allegations of a lack of effective internal control over
financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of
adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and
external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.
On June 28, 2022, Grizzly Research LLC issued a short seller report that made certain allegations against us, or the Short Seller
Report. On June 29, 2022, we announced that our board of directors, including the audit committee, was reviewing the allegations and
considering the appropriate course of action to protect the interests of all shareholders. On July 11, 2022, our board of directors,
including the audit committee of our board, decided to form an independent committee, consisting of independent directors Mr. Denny
Ting Bun Lee, Mr. Hai Wu, and Ms. Yu Long, to oversee an independent internal review regarding the key allegations made in the Short
Seller Report. The internal review was performed by the independent committee with the assistance of third-party professional advisors
including an international law firm and forensic accounting experts from a well-regarded forensic accounting firm that is not our auditor.
On August 26, 2022, we announced that the internal review was substantially complete. Based on findings of the internal review, the
independent committee has concluded that the allegations in the Short Seller Report were not substantiated.
We may be the subject of unfavorable allegations made by short sellers again in the future. Any such allegations may be
followed by periods of instability in the market price of our common shares and ADSs and negative publicity. If and when we become
the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we would have to expend a
significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any
meritless short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles
of freedom of speech, applicable federal or state law or issues of commercial confidentiality. Moreover, while an internal investigation is
ongoing and to ensure that its findings are reached independently without undue influence, we may also be constrained in our ability to
offer a public rebuttal immediately even if the allegation can, in our view, be readily rebutted. Such a situation could be costly and time-
consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be
groundless, allegations against us could severely impact our business operations and shareholders’ equity, and the value of any
investment in our ADSs could be greatly reduced or rendered worthless.
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The sale or availability for sale of substantial amounts of our Class A ordinary shares and/or ADSs could adversely affect their
market price.
Sales of substantial amounts of our Class A ordinary shares and/or ADSs in the public market, or the perception that these sales
could occur, could adversely affect the market price of our Class A ordinary shares and/or ADSs and could materially impair our ability
to raise capital through equity offerings in the future. We cannot predict what effect, if any, market sales of securities held by our
significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our
Class A ordinary shares and/or ADSs. In addition, certain holders of our existing shareholders are entitled to certain registration rights,
including demand registration rights, piggyback registration rights, and Form F-3 or Form S-3 registration rights. Registration of these
shares under the Securities Act of 1933, or the Securities Act, would result in these shares becoming freely tradable without restriction
under the Securities Act immediately upon the effectiveness of the registration. Sales of these registered shares in the public market, or
the perception that such sales could occur, could cause the price of our Class A ordinary shares and/or ADSs to decline.
Because we do not expect to pay dividends in the foreseeable future, the holders of our Class A ordinary shares and/or ADSs must
rely on price appreciation of our Class A ordinary shares and/or ADSs for return on their investment.
We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth
of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an
investment in our Class A ordinary shares and/or ADSs as a source for any future dividend income.
Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to
declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and
cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial
condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return to ADS holders
will likely depend entirely upon any future price appreciation of our Class A ordinary shares and/or ADSs. There is no guarantee that our
Class A ordinary shares and/or ADSs will appreciate in value or even maintain the price at which Class A ordinary shares and/or ADS
holders purchased the Class A ordinary shares and/or ADSs. Our Class A ordinary shares and/or ADS holders may not realize a return on
their investment in our Class A ordinary shares and/or ADSs and they may even lose their entire investment in our Class A ordinary
shares and/or ADSs.
The capped call and zero-strike call transactions may affect the value of our Class A ordinary shares and/or ADSs.
On January 30, 2019, in connection with the pricing of the 2024 Notes, we entered into capped call transactions with one or
more of the initial purchasers and/or their respective affiliates and/or other financial institutions, or the Capped Call Option
Counterparties. We entered into additional capped call transactions with the Capped Call Option Counterparties on February 15, 2019
and February 26, 2019, respectively. We used a portion of the net proceeds of the 2024 Notes to pay the cost of such transactions. The
cap price of these capped call transactions is initially US$14.92 per ADS, representing a premium of approximately 100% to the closing
price on the New York Stock Exchange, or NYSE, of our ADSs on January 30, 2019, which was US$7.46 per ADS, and is subject to
adjustment under the terms of the capped call transactions. As part of establishing their initial hedges of the capped call transactions, the
Capped Call Option Counterparties or their respective affiliates expect to trade the ADSs and/or enter into various derivative transactions
with respect to our ADSs concurrently with, or shortly after, the pricing of the 2024 Notes. This activity could increase (or reduce the
size of any decrease in) the market price of the ADSs or the 2024 Notes at that time. However, if any such capped call transactions fail to
become effective, the Capped Call Option Counterparties may unwind their hedge positions with respect to the ADSs, which could
adversely affect the market price of the ADSs. In addition, the Capped Call Option Counterparties or their respective affiliates may
modify their hedge positions by entering into or unwinding various derivative transactions with respect to the ADSs, the 2024 Notes or
our other securities and/or by purchasing or selling the ADSs, the 2024 Notes or our other securities in secondary market transactions
following the pricing of the 2024 Notes and prior to the maturity of the 2024 Notes (and are likely to do so following any conversion of
the 2024 Notes, if we exercise the relevant election under the capped call transactions, or repurchase of the 2024 Notes by us). This
activity could also cause or avoid an increase or a decrease in the market price of our ADSs.
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On January 30, 2019, in connection with the pricing of the 2024 Notes, we also entered into privately negotiated zero-strike call
option transactions with one or more of the initial purchasers or their respective affiliates, or the Zero-Strike Call Option Counterparties,
and used a portion of the net proceeds of the 2024 Notes to pay the aggregate premium under such transactions. Pursuant to the zero-
strike call option transactions, we purchased, in the aggregate, approximately 26.8 million ADSs, with delivery thereof (subject to
adjustment) by the respective Zero-Strike Call Option Counterparties at settlement shortly after the scheduled maturity date of the 2024
Notes, subject to the ability of each Zero-Strike Call Option Counterparty to elect to settle all or a portion of the respective zero-strike
option transaction early. Facilitating investors’ hedge positions by entering into the zero-strike call option transactions, particularly if
investors purchase the ADSs on or around the day of the pricing of the 2024 Notes, could increase (or reduce the size of any decrease in)
the market price of the ADSs. However, if any zero-strike call option transactions fail to become effective, the respective Zero-Strike
Call Option Counterparties may unwind their hedge positions with respect to the ADSs, which could adversely affect the market price of
the ADSs. In addition, the Zero-Strike Call Option Counterparties or their respective affiliates may modify their respective hedge
positions by entering into or unwinding one or more derivative transactions with respect to the ADSs, the 2024 Notes or our other
securities and/or by purchasing or selling the ADSs, the 2024 Notes or our other securities in secondary market transactions at any time,
including following the pricing of the 2024 Notes and prior to the maturity of the 2024 Notes. This activity could also cause or avoid an
increase or a decrease in the market price of the ADSs.
Shortly after the pricing of the 2026 Notes and 2027 Notes in January 2021, we entered into separate and individually privately
negotiated agreements with certain holders of our outstanding 2024 Notes to exchange approximately US$581.7 million principal
amount of the outstanding 2024 Notes for our ADSs. The 2024 Notes Exchanges closed on January 15, 2021. In connection with the
2024 Notes Exchanges, we also entered into agreements with certain financial institutions that are parties to our existing capped call
transactions we entered into in connection with the issuance of the 2024 Notes shortly after the pricing of the 2026 Notes and 2027 Notes
to terminate a portion of the relevant existing capped call transactions in a notional amount corresponding to the portion of the principal
amount of such 2024 Notes exchanged. In connection with such terminations of the existing capped call transactions, we received
deliveries of the ADSs in such amounts as specified pursuant to such termination agreements on January 15, 2021. The remaining capped
call transactions are subject to the same risks as described above. Shortly after the consummation of the 2024 Notes Exchanges, we also
terminated a portion of the zero-strike call option transactions (which we had entered into in February 2019 in connection with the
issuance of the 2024 Notes).
We are subject to counterparty risk with respect to the capped call and the zero-strike call transactions.
The counterparties to the capped call transactions and the zero-strike call transactions we entered into in connection with the
issuance of the 2024 Notes are financial institutions or affiliates of financial institutions, and we are subject to the risk that each of these
counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the capped
call transactions or the zero-strike call transactions, as the case may be. Our exposure to the credit risk of the counterparties under the
capped call transactions and the zero-strike call transactions will not be secured by any collateral. If any such counterparty becomes
subject to bankruptcy or other insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to
our exposure at that time under our transactions with them. In each case, our exposure will depend on many factors. Generally, the
increase in our exposure will be positively correlated to the increase in the market price and in the volatility of our ADSs. In addition, as
a result of a default or other failure to perform, or a termination of obligations, by any counterparty to the capped call transactions or
zero- strike call transactions, we may suffer more dilution than we currently anticipate with respect to our ADSs and the underlying Class
A ordinary shares. We can provide no assurances as to the financial stability or viability of any option counterparty under the capped call
transactions or the zero-strike call transactions.
There can be no assurance that we will not be classified as a passive foreign investment company, or PFIC, for U.S. federal income
tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ADSs or
Class A ordinary shares.
A non-U.S. corporation, such as our company, will be classified as a passive foreign investment company, or PFIC, for U.S.
federal income tax purposes for any taxable year if either (i) 75% or more of its gross income for such year consists of certain types of
“passive” income; or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such
year is attributable to assets that produce or are held for the production of passive income.
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Although the law in this regard is not entirely clear, we treat the VIEs as being owned by us for U.S. federal income tax
purposes because we control their management decisions and are entitled to substantially all of the economic benefits associated with
these entities, and as a result, we consolidate their results of operations in our consolidated U.S. GAAP financial statements. If it were
determined, however, that we do not own the VIEs for U.S. federal income tax purposes, we may be treated as a PFIC for the current
taxable year and any subsequent taxable year.
Assuming that we are the owner of the VIEs for U.S. federal income tax purposes, and based upon our current and expected
income and assets, we do not believe that we were a PFIC for the taxable year ended December 31, 2022 and we do not expect to be a
PFIC for the current taxable year or the foreseeable future. While we do not expect to be or become a PFIC in the current or foreseeable
taxable years, no assurance can be given in this regard because the determination of whether we will be or become a PFIC is a factual
determination made annually that will depend, in part, upon the nature and composition of our income and assets. Fluctuations in the
market price of our ADSs or Class A ordinary shares may cause us to be classified as a PFIC for the current or future taxable years
because the value of our assets for purposes of the asset test, including the value of our goodwill and other unbooked intangibles, may be
determined by reference to the market price of our ADSs or Class A ordinary shares, which may be volatile. Furthermore, the
composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets. If we were to be or
become a PFIC for any taxable year during which a U.S. holder holds our ADSs or Class A ordinary shares, certain adverse U.S. federal
income tax consequences could apply to such U.S. holders.
Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights
of holders of our Class A ordinary shares and ADSs.
Our thirteenth amended and restated memorandum and articles of association contain provisions that have the potential to limit
the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could
have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by
discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. Our board of directors
has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations,
powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions,
including dividend rights, conversion rights, voting rights, rights and terms of redemption and liquidation preferences, any or all of which
may be greater than the rights associated with our ordinary shares, in the form of ADS or otherwise. Preferred shares could be issued
quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If
our board of directors decides to issue preferred shares, the price of our Class A ordinary shares and/or ADSs may fall and the voting and
other rights of the holders of our Class A ordinary shares and ADSs may be materially and adversely affected.
Our shareholders may face difficulties in protecting their interests, and ability to protect their rights through U.S. courts may be
limited, because we are incorporated under Cayman Islands law.
We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our
thirteenth amended and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands, or the
Companies Act, and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by
minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by
the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial
precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority,
but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors
under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the
United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states,
such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition,
Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect
corporate records (except for our memorandum and articles of association and our register of mortgages and charges) or to obtain copies
of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether or not,
and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to
our shareholders. This may make it more difficult for our shareholders to obtain the information needed to establish any facts necessary
for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
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As a Cayman Islands company listed on the New York Stock Exchange, we are subject to the NYSE corporate governance
listing standards. However, the NYSE corporate governance listing standards permit a foreign private issuer like us to follow the
corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home
country, may differ significantly from the NYSE corporate governance listing standards.
Pursuant to Sections 303A.01, 303A.04, 303A.05, 303A.07 and 302.00 of the New York Stock Exchange Listed Company
Manual, a company listed on the New York Stock Exchange must have a majority of independent directors, a nominating and corporate
governance committee composed entirely of independent directors, a compensation committee composed entirely of independent
directors and an audit committee with a minimum of three members, and must hold an annual shareholders’ meeting during each fiscal
year. We currently follow our home country practice in lieu of these requirements. We may also continue to rely on these and other
exemptions available to foreign private issuers in the future, and to the extent that we choose to do so in the future, our shareholders may
be afforded less protection than they otherwise would under the NYSE corporate governance listing standards applicable to U.S.
domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were
you investing in a United States domestic issuer.
It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
Shareholder claims or regulatory investigations that are common in the United States generally are difficult to pursue as a matter
of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for
regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation
mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and
administration, such cooperation with the securities regulatory authorities in the United States may not be efficient in the absence of
mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which
became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection
activities within the territory of the PRC. While detailed interpretation of or implementation rules under Article 177 have yet to be
promulgated, the inability of an overseas securities regulator to directly conduct investigations or evidence collection activities within
China may further increase difficulties faced by you in protecting your interests.
ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreements, which could result in less
favorable outcomes to the plaintiff(s) in any such action.
The deposit agreement governing the ADSs representing our Class A ordinary shares provides that, subject to the depositary’s
right to require a claim to be submitted to arbitration, the federal or state courts in the City of New York have exclusive jurisdiction to
hear and determine claims arising under the deposit agreement and in that regard, to the fullest extent permitted by law, ADS holders
waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our Class A ordinary
shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.
If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was
enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge,
the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not
been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver
provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement. In
determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party
knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit
agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before investing in the ADSs.
If any of the holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising
under the deposit agreement or the ADSs, including claims under federal securities laws, such holder or beneficial owner may not be
entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the
depositary, lead to increased costs to bring a claim, limited access to information and other imbalances of resources between such holder
and us, or limit such holder’s ability to bring a claim in a judicial forum that such holder finds favorable. If a lawsuit is brought against us
and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be
conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including
results that could be less favorable to the plaintiff(s) in any such action.
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Nevertheless, if this jury trial waiver provision is not enforced, to the extent a court action proceeds, it would proceed under the
terms of the deposit agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or ADSs shall relieve us
or the depositary from our respective obligations to comply with the Securities Act and the Exchange Act nor serve as a waiver by any
holder or beneficial owner of ADSs of compliance with the U.S. federal securities laws and the rules and regulations promulgated
thereunder.
Certain judgments obtained against us by our shareholders may not be enforceable.
We are a Cayman Islands exempted company and the majority of our assets are located outside of the United States. The most
significant portion of our operations are conducted in China. In addition, a majority of our current directors and officers are nationals and
residents of countries other than the United States. Substantially all of the assets of these persons may be located outside the United
States. As a result, it may be difficult or impossible for our shareholders to bring an action against us or against these individuals in the
United States in the event that such shareholders believe that their rights have been infringed under the U.S. federal securities laws or
otherwise. Even if such shareholders are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may
render them unable to enforce a judgment against our assets or the assets of our directors and officers.
We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain
provisions applicable to United States domestic public companies.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities
rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K
with the SEC;
● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security
registered under the Exchange Act;
● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and
liability for insiders who profit from trades made in a short period of time; and
● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend
to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the New York Stock
Exchange. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the
information we are required to file with or furnish to the SEC will be less extensive and less timely than that required to be filed with the
SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to
you were you investing in a U.S. domestic issuer.
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The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and they may not be able to exercise their
right to vote their Class A ordinary shares.
Holders of our ADSs will only be able to exercise the voting rights with respect to the underlying Class A ordinary shares in
accordance with the provisions of the deposit agreement, dated as of September 11, 2018 by and among NIO Inc., Deutsche Bank Trust
Company Americas, as ADS depositary, and the holders and beneficial owners of the ADSs issued thereunder and the deposit agreement
for restricted securities, dated as of February 4, 2019 by and among NIO Inc., Deutsche Bank Trust Company Americas, as depositary,
and the holders and beneficial owners of the restricted ADSs issued thereunder (each, as the context requires and applicable to a
particular ADS holder, the “deposit agreement”). Under the deposit agreement, ADS holders must vote by giving voting instructions to
the depositary. If we ask for instructions of ADS holders, then upon receipt of such voting instructions, the depositary will try to vote the
underlying Class A ordinary shares in accordance with these instructions. If we do not instruct the depositary to ask for instructions of
ADS holders, the depositary may still vote in accordance with instructions given by holders of ADSs, but it is not required to do so. ADS
holders will not be able to directly exercise their right to vote with respect to the underlying shares unless they withdraw the shares.
When a general meeting is convened, an ADS holder may not receive sufficient advance notice to withdraw the shares underlying his or
her ADSs to allow such holder to vote with respect to any specific matter. If we ask for instructions of holders of ADSs, the depositary
will notify ADS holders of the upcoming vote and will arrange to deliver our voting materials to ADS holders. We have agreed to give
the depositary at least 30 days’ prior notice of shareholders’ meetings. Nevertheless, we cannot assure you that ADS holders will receive
the voting materials in time to ensure that ADS holders can instruct the depositary to vote their shares. In addition, the depositary and its
agents are not responsible for failing to carry out voting instructions or for their manner of carrying out ADS holders’ voting instructions.
This means that an ADS holder may not be able to exercise the right to vote and may have no legal remedy if the shares underlying his or
her ADSs are not voted as such holder requested.
The depositary for our ADSs will give us a discretionary proxy to vote our Class A ordinary shares underlying the ADSs if the holders
of such ADSs do not vote at shareholders’ meetings, except in limited circumstances, which could adversely affect the interests of our
ADS holders.
Under the deposit agreement for the ADSs, if any holder of the ADSs does not vote, the depositary will give us a discretionary
proxy to vote our Class A ordinary shares underlying such ADSs at shareholders’ meetings unless:
● we have failed to timely provide the depositary with notice of meeting and related voting materials;
● we have instructed the depositary that we do not wish a discretionary proxy to be given;
● we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;
● a matter to be voted on at the meeting would have a material adverse impact on shareholders; or
● the voting at the meeting is to be made on a show of hands.
The effect of this discretionary proxy is that if any such holder of the ADSs does not vote at shareholders’ meetings, such holder
cannot prevent our Class A ordinary shares underlying such ADSs from being voted, except under the circumstances described above.
This may make it more difficult for shareholders to influence the management of our company. Holders of our Class A ordinary shares
are not subject to this discretionary proxy.
An ADS holder’s right to pursue claims against the depositary is limited by the terms of the deposit agreement.
Under the deposit agreement, any action or proceeding against or involving the depositary, arising out of or based upon the
deposit agreement or the transactions contemplated thereby or by virtue of owning the ADSs may only be instituted in a state or federal
court in New York, New York, and a holder of our ADSs, will have irrevocably waived any objection which such holder may have to the
laying of venue of any such proceeding, and irrevocably submitted to the exclusive jurisdiction of such courts in any such action or
proceeding. However, there is uncertainty as to whether a court would enforce this exclusive jurisdiction provision. Furthermore,
investors cannot waive compliance with the U.S. federal securities laws and rules and regulations promulgated thereunder.
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The depositary may, in its sole discretion, require that any dispute or difference arising from the relationship created by the
deposit agreement be referred to and finally settled by an arbitration conducted under the terms described in the deposit agreement,
although the arbitration provisions do not preclude an ADS holder from pursuing claims under the Securities Act or the Exchange Act in
state or federal courts. Furthermore, if an ADS holder is unsuccessful in such arbitration, such holder may be responsible for the fees of
the arbitrator and other costs incurred by the parties in connection with such arbitration pursuant to the deposit agreement. Also, we may
amend or terminate the deposit agreement without the consent of any ADS holder. If an ADS holder continues to hold its ADSs after an
amendment to the deposit agreement, such holder agrees to be bound by the deposit agreement as amended.
Our ADS holders may not receive dividends or other distributions on our Class A ordinary shares and the ADS holders may not
receive any value for them, if it is illegal or impractical to make them available to the ADS holders.
The depositary of our ADSs has agreed to pay the ADS holders the cash dividends or other distributions it or the custodian
receives on Class A ordinary shares or other deposited securities underlying our ADSs, after deducting its fees and expenses. Our ADS
holders will receive these distributions in proportion to the number of Class A ordinary shares the underlying ADSs represent. However,
the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs.
For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the
Securities Act but that are not properly registered or distributed under an applicable exemption from registration. The depositary may
also determine that it is not feasible to distribute certain property through the mail. Additionally, the value of certain distributions may be
less than the cost of mailing them. In these cases, the depositary may determine not to distribute such property. We have no obligation to
register under U.S. securities laws any ADSs, Class A ordinary shares, rights or other securities received through such distributions. We
also have no obligation to take any other action to permit the distribution of ADSs, Class A ordinary shares, rights or anything else to
holders of ADSs. This means that our ADS holders may not receive distributions we make on our Class A ordinary shares or any value
for them if it is illegal or impractical for us to make them available to the ADS holders. These restrictions may cause a material decline in
the value of our ADSs or Class A ordinary shares.
Our ADS holders may experience dilution of their holdings due to inability to participate in rights offerings.
We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under the deposit
agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to
which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs or are registered
under the provisions of the Securities Act. The depositary may, but is not required to, attempt to sell these undistributed rights to third
parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration under the Securities Act, and we
are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a
registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may
experience dilution of their holdings as a result.
We may need additional capital, and the sale of additional Class A ordinary shares and/or ADSs or other equity securities could result
in additional dilution to our shareholders, and the incurrence of additional indebtedness could increase our debt service obligations.
We may require additional cash resources due to changed business conditions, strategic acquisitions or other future
developments. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities
or obtain additional credit facilities. The sale of additional equity and equity-linked securities could result in additional dilution to our
shareholders. The sale of substantial amounts of our Class A ordinary shares and/or ADSs (including upon conversion of our convertible
notes) could dilute the interests of our shareholders and ADS holders and adversely impact the market price of our Class A ordinary
shares and/or ADSs. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and
financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms
acceptable to us, if at all.
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Future sales or issuances, or perceived future sales or issuances, of substantial amounts of our ordinary shares or ADSs could
adversely affect the price of our Class A ordinary shares and/or ADS.
If our existing shareholders sell, or are perceived as intending to sell, substantial amounts of our ordinary shares or ADSs,
including those issued upon the exercise of our outstanding stock options, the market price of our Class A ordinary shares and/or ADSs
could fall. Such sales, or perceived potential sales, by our existing shareholders might make it more difficult for us to issue new equity or
equity-related securities in the future at a time and place we deem appropriate. Ordinary shares held by our existing shareholders may be
sold in the public market in the future subject to the restrictions contained in Rule 144 and Rule 701 under the Securities Act and the
applicable lock-up agreements. If any existing shareholder or shareholders sell a substantial amount of ordinary shares after the
expiration of the applicable lock-up periods, the prevailing market price for our Class A ordinary shares and/or ADSs could be adversely
affected.
In addition, certain of our shareholders or their transferees and assignees will have the right to cause us to register the sale of
their shares under the Securities Act upon the occurrence of certain circumstances. Registration of these shares under the Securities Act
would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of
the registration.
Our ADS holders may be subject to limitations on transfer of their ADSs.
Our ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time
to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time
for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs
to maintain an exact number of ADS holders on its books for a specified period. The depositary may also close its books in emergencies,
and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our
share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of
any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other
reason.
We incur increased costs as a result of being a public company.
As a public company listed in the United States, Hong Kong and Singapore, we incur significant legal, accounting and other
expenses that we did not incur as a private company. The Sarbanes-Oxley Act, rules subsequently implemented by the SEC and the New
York Stock Exchange, the Hong Kong Listing Rules, the listing manual of the Singapore Exchange and the Singapore Code of Corporate
Governance impose various requirements on the corporate governance practices of public companies. We expect these rules and
regulations applicable to public companies to increase our accounting, legal and financial compliance costs and to make certain corporate
activities more time-consuming and costly. Our management will be required to devote substantial time and attention to our public
company reporting obligations and other compliance matters. We are currently evaluating and monitoring developments with respect to
these rules and regulations, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
Our reporting and other compliance obligations as a public company may place a strain on our management, operational and financial
resources and systems for the foreseeable future.
In the past, shareholders of a public company often brought securities class action suits against the company following periods
of instability in the market price of that company’s securities. If we were involved in a class action suit, it could divert a significant
amount of our management’s attention and other resources from our business and operations, which could harm our results of operations
and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our
reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required
to pay significant damages, which could have a material and adverse effect on our financial condition and results of operations.
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The different characteristics of the capital markets in the U.S., Hong Kong and Singapore may negatively affect the trading prices of
our Class A ordinary shares and/or ADSs.
We are subject to the U.S., Hong Kong and Singapore listing and regulatory requirements concurrently. The NYSE, Hong Kong
Stock Exchange and Singapore Exchange have different trading hours, trading characteristics (including trading volume and liquidity),
trading and listing rules, and investor bases (including different levels of retail and institutional participation). As a result of these
differences, the trading prices of our Class A ordinary shares and our ADSs may not be the same, even allowing for currency differences.
Fluctuations in the price of our ADSs due to circumstances peculiar to the U.S. capital markets could materially and adversely affect the
price of our Class A ordinary shares, or vice versa. Certain events having significant negative impact specifically on the U.S. capital
markets may result in a decline in the trading price of our Class A ordinary shares notwithstanding that such event may not impact the
trading prices of securities listed in Hong Kong and Singapore generally or to the same extent, or vice versa. Because of the different
characteristics of the U.S., Hong Kong and Singapore capital markets, the historical market prices of our ADSs may not be indicative of
the trading performance of our Class A ordinary shares after the listing of our Class A ordinary shares on the Hong Kong Stock
Exchange and the Singapore Exchange.
Exchange between our Class A ordinary shares and our ADSs may adversely affect the liquidity and/or trading price of each other.
Our ADSs are currently traded on NYSE. Subject to compliance with U.S. securities law and the terms of the Deposit
Agreement, holders of our Class A ordinary shares may deposit Class A ordinary shares with the depositary in exchange for the issuance
of our ADSs. Any holder of ADSs may also surrender ADSs and withdraw the underlying Class A ordinary shares represented by the
ADSs pursuant to the terms of the Deposit Agreement for trading on the Hong Kong Stock Exchange or the Singapore Exchange. In the
event that a substantial number of Class A ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the
liquidity and trading price of our Class A ordinary shares on the Hong Kong Stock Exchange or the Singapore Exchange and our ADSs
on NYSE may be adversely affected.
The time required for the exchange between Class A ordinary shares and ADSs might be longer than expected and investor might not
be able to settle or effect any sale of their securities during this period, and the exchange of Class A ordinary shares into ADSs
involves costs.
There is no direct trading or settlement between the NYSE and the Hong Kong Stock Exchange or the Singapore Exchange on
which our ADSs and our Class A ordinary shares are respectively traded. In addition, the time differences between New York and Hong
Kong or Singapore, unforeseen market circumstances or other factors may delay the deposit of Class A ordinary shares in exchange for
ADSs or the withdrawal of Class A ordinary shares underlying the ADSs. Investors will be prevented from settling or effecting the sale
of their securities during such periods of delay. In addition, there is no assurance that any exchange for Class A ordinary shares into
ADSs (and vice versa) will be completed in accordance with the timelines that investors may anticipate. Furthermore, the depositary for
the ADSs is entitled to charge holders fees for various services including for the issuance of ADSs upon deposit of Class A ordinary
shares, cancelation of ADSs, distributions of cash dividends or other cash distributions, distributions of ADSs pursuant to share
dividends or other free share distributions, distributions of securities other than ADSs and annual service fees. As a result, shareholders
who exchange Class A ordinary shares into ADSs, and vice versa, may not achieve the level of economic return the shareholders may
anticipate.
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
We were founded in November 2014, as Nextev Inc., which was changed to our current name NIO Inc. in July 2017. Significant
milestones in our development since 2022 include the following:
● In January 2022, we notified holders of 2024 Notes that pursuant to the 2024 Notes Indenture dated as of February 4, 2019
by and between us and The Bank of New York Mellon, as trustee, each holder has the right, at the option of such holder, to
require us to repurchase all of such holder’s 2024 Notes or any portion thereof that is an integral multiple of US$1,000
principal amount for cash on February 1, 2022. The opportunity for holders of 2024 Notes to exercise the repurchase right
commenced at 9:00 a.m., New York City time on January 3, 2022, and terminated at 5:00 p.m., New York City time, on
Friday, January 28, 2022. Based on information from The Bank of New York Mellon as the paying agent for 2024 Notes,
none of 2024 Notes were surrendered for repurchase. The aggregate amount of the repurchase price is nil.
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● On March 10, 2022, our Class A ordinary shares commenced trading, by way of introduction, on the Main Board of the
Hong Kong Stock Exchange under the stock code “9866” in board lots of 10 Class A ordinary shares, and the stock short
name is “NIO-SW”. Our ADSs remain primarily listed and traded on the New York Stock Exchange. The Class A ordinary
shares listed on the Main Board of the Hong Kong Stock Exchange are fully fungible with the ADSs listed on the NYSE.
● On May 20, 2022, our Class A ordinary shares commenced trading, by way of introduction, on the Main Board of the
Singapore Exchange under the stock code “NIO” in board lot sizes of 10 Class A ordinary shares. Our ADSs remain
primarily listed and traded on the New York Stock Exchange. The Class A ordinary shares listed on the Main Board of the
Singapore Exchange are fully fungible with the ADSs listed on the NYSE. The Class A ordinary shares traded on the
Singapore Exchange are not fungible with the Class A ordinary shares traded on the Hong Kong Stock Exchange as there is
no mechanism in place to facilitate such transfer of Class A ordinary shares between the Singapore Exchange and the Hong
Kong Stock Exchange.
Our principal executive offices are located at Building 20, No. 56 AnTuo Road, Jiading District, Shanghai 201804, PRC. Our
telephone number at this address is +86-21-6908-2018. Our registered office in the Cayman Islands is located at the offices of Maples
Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process
in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711. We maintain our
website at http://ir.nio.com/. The information contained on, or linked from, our website is not a part of this annual report.
The SEC maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC using its EDGAR system.
See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures” for a
discussion of our capital expenditures.
B.
Business Overview
Our Chinese name, Weilai (蔚来), which means Blue Sky Coming, reflects our commitment to a more environmentally friendly
future.
We are a pioneer and a leading company in the premium smart electric vehicle market. We design, develop, jointly manufacture,
and sell premium smart electric vehicles, driving innovations in autonomous driving, digital technologies, electric powertrains and
batteries. We differentiate ourselves through our continuous technological breakthroughs and innovations, such as our industry-leading
battery swapping technologies, Battery as a Service, or BaaS, as well as our proprietary autonomous driving technologies and
Autonomous Driving as a Service, or ADaaS.
Our Vehicles
We design, develop, jointly manufacture and sell our vehicles in the premium smart electric vehicle market. We currently offer
our products and services in China, Norway, Germany, the Netherlands, Denmark and Sweden and plan to expand into more global
markets to capture the fast-growing EV demand.
We introduced the EP9 supercar in 2016, which was the then fastest electric vehicle, setting the Nurburgring Nordschleife all-
electric vehicle lap record. Starting from December 2017, we launched a succession of well-positioned vehicle models and established a
competitive product portfolio, including the ES8, a six-seater smart electric flagship SUV, the ES7 (or the EL7), a mid-large five-seater
smart electric SUV, the ES6, a five-seater all-round smart electric SUV, the EC7, a five-seater smart electric flagship coupe SUV, the
EC6, a five-seater smart electric coupe SUV, the ET7, a smart electric flagship sedan, and the ET5, a mid-size smart electric sedan.
In 2022, we started deliveries of the ET7, ES7 and ET5, and launched the EC7 and All-New ES8 which will be delivered in the
second quarter of 2023. All those models are derived from our NT2.0 platform, bringing users experiences beyond expectations in terms
of design, performance, comfort, intelligence, safety and sustainability. They are equipped with NAD, comprising NIO Aquila, a super
sensing system equipped with 33 high-performance sensors including LiDAR, and NIO Adam, a super computing platform with the
computing power up to 1016 TOPS enabled by four NVIDIA DRIVE Orin X chips. Meanwhile, we have launched the PanoCinema
based on NT2.0, an immersive digital cockpit featuring AR and VR technologies, the world’s first on-board AI assistant, NOMI, the
7.1.4 immersive sound system, the waterfall ambient lighting, and the 12.8-inch AMOLED central control screen, making the car a
“holistic immersive digital space” for users.
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Inheriting our high-performance DNA marked by dual-motor intelligent All-Wheel-Drive system, all NIO models are able to
achieve outstanding performances in 0-100 km/h and braking distance. Enabled by battery swapping technology, all our models are
compatible with different battery packs including Standard Range Battery, Long Range Battery and Ultra-Long Range Battery,
supporting different driving ranges and providing an upgradable and flexible user experience.
We delivered 122,486 vehicles, including 14,351 ES8s, 14,159 ES7s, 42,012 ES6s, 17,076 EC6s, 23,075 ET7s and 11,813 ET5s
in 2022. In 2023, we plan to launch and deliver the All-New ES6, All-New EC6 and one new model derived from our NT2.0 platform,
complementing our product portfolio and contributing to our vehicle sales. We are also developing more products to expand our
addressable market segments.
*
**
Represent NEDC range for ES6 and EC6, and CLTC range for All-New ES8, ES7, EC7, ET7 and ET5. The driving ranges are
based on the officially filed documents or engineering test results, which may vary due to different road types, weather and road
conditions, battery level, loading and tires.
150 kWh battery is expected to be available in 2023. The driving ranges with 150 kWh are estimates pursuant to the NEDC or
CLTC standards.
***
Represent configurations of performance versions.
****
Represent starting MSRP in China as of the date of this annual report.
Our Key Technological Breakthroughs and Innovations
Since our inception, we have continued to innovate with the goal of consistently creating the most worry-free and convenient
experience for our users. Our technological breakthroughs and innovations differentiate us from our peers, creating better user
experiences and enhancing our users’ confidence in us. We have strategically focused on building in-house capabilities including battery
swapping, autonomous driving, digital technologies, electric powertrain and battery, among others, to control the design and
development of the vehicle software and hardware architecture and the critical components that go into our products. Our capabilities
have given us greater flexibility to continually improve our current products and allow us to launch new products more rapidly. By
integrating these industry-leading technologies, all of our vehicles can create a relaxing, interactive, intelligent and immersive experience
for our users.
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We have strategically located our research and development offices in locations where we believe give us access to the best
talent. Our global research and development center for production models is located in Shanghai. Our research and development teams in
Hefei mainly focus on vehicle engineering and manufacturing engineering. Our global research and development center for software is
located in Beijing. Our global research and development center for autonomous driving is located in San Jose. Our global design center is
located in Munich.
Battery swapping and BaaS
All of our smart electric vehicles are equipped with proprietary battery swapping technologies, providing our users with a
“chargeable, swappable, upgradable” experience. We also offer Battery as a Service, or BaaS, an industry-first innovative model which
allows users to purchase electric vehicles and subscribe for the usage of batteries separately. BaaS enables our users to benefit from lower
vehicle purchase prices, flexible battery upgrade options and assurance of battery performance.
● Battery swapping. Supported by over 1,500 patented technologies, all of our vehicles support battery swapping. It
provides our users with convenient “recharging” experiences by simply swapping the user’s battery for another one within
minutes. In addition, it enables users to enjoy the benefits of battery technology advancements with upgrade options. In
December 2022, we introduced Power Swap station 3.0 with a service capacity of up to 408 swaps per day. Enabled by
Lidars and NVIDIA DRIVE Orin X chips, it is able to support the Automatic Summon & Swap feature, through which the
station can communicate with the vehicle and automatically navigates the vehicle to complete the swap.
● BaaS. Enabled by vehicle-battery separation and battery subscription, BaaS decouples the battery price from the purchase
price of a vehicle and allows users to subscribe for battery usage separately. For each user under the BaaS model, we sell a
battery to the Battery Asset Company, and the user subscribes for the usage of the battery from the Battery Asset Company.
If users opt to purchase a NIO vehicle and subscribe for the battery under BaaS, they can enjoy a deduction off the original
vehicle purchase price while paying a monthly subscription fee for the battery. NIO users are able to enjoy permanent or
flexible upgrades to batteries with higher capacities or other future battery options with an additional fee as the battery
technologies evolve.
Autonomous driving and ADaaS
We believe that autonomous driving is the core of smart electric vehicles, and it has been our focus from day one. We are one of
the first companies in China to offer enhanced ADAS capabilities. NIO Pilot, our proprietary enhanced ADAS, is equipped with
Navigate on Pilot, or NOP. NOP is able to guide a vehicle on and off ramps, overtake, merge lanes and cruise according to planned routes
in highways and urban expressways.
In January 2021, we announced NIO Autonomous Driving, or NAD, our next generation, proprietary full stack autonomous
driving technology. We have built up the NAD capability with in-house developed perception algorithms, localization, control strategy
and platform software. The technology comprises a super computing platform called NIO Adam and a super sensing system called NIO
Aquila. NAD is expected to gradually cover use cases from expressways, urban roads, parking, battery swapping to other domains to
deliver a safer and more relaxing autonomous driving experience for our users. Staring from the fourth quarter of 2022, we have
gradually released NOP+ beta to users based on NT2.0. We plan to roll out NAD through a monthly subscription under ADaaS in the
future.
In addition, we have commenced our inhouse research and development of the autonomous driving chipset to maximize the
autonomous driving algorithm efficiency.
Digital Technologies
Digital System
Digital system is the foundation for us to achieve continuous upgrade through over-the-air updates, the digital platform for
building our own proprietary software and algorithms and the security system for deep reassurance.
On top of our proprietary software architecture and cloud data platform, NVOS (NIO Vehicle Operating System), our vehicle
digital system, has what we believe to be the industry-leading connectivity and remote service capabilities with an end-to-end security
framework.
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Digital Cockpit
Our digital cockpit has an AI-driven, scalable and flexible architecture that presents users with an intelligent and immersive
digital experience. We have built flexibility into the digital cockpit, so that we can continue to update the NIO Operating System, or NIO
OS, with new features and applications.
Inspired by the concept of mobile living space, we have launched PanoCinema, a panoramic digital cockpit with AR and VR
capabilities, to bring holistic immersive experiences to our users. Inside our digital cockpit, NOMI, our in-car AI companion, can listen
to, communicate and interact with users to build a strong emotional connection between vehicles and users.
Electric Powertrain and Battery
Electric Powertrain
Starting from our first product, we have designed, developed and manufactured our own proprietary electric powertrains in-
house.
Our electric powertrains are designed specifically for NIO’s vehicles, and through FOTA, we are able to continue to improve
and update, and adjust according to our users’ driving behavior. Enabled by in-house research and development capabilities, our dual-
motor configuration offers a variety of electric motors, including 150-300kW induction motor and 160-210 kW permanent magnet motor.
The new-generation electric powertrain features Silicon Carbide power modules which can minimize switching loss and
improve system efficiency compared with IGBT (insulated gate bipolar transistor).
Battery
We are committed to the research, development and innovations in battery technologies. Our batteries are based on advanced
battery pack design, battery management system and proprietary swapping mechanism.
Currently, we offer two battery options: Standard Range Battery and Long Range Battery. The Standard Range Battery currently
on offer is a 75 kWh cell-to-pack battery with hybrid LFP/NCM cells. With certain proprietary patents, the 100 kWh long range cell-to-
pack battery features thermal propagation prevention, highly integrated design, all-climate thermal management and bi-directional cloud
battery management system. We announced the 150 kWh Ultra-long Range Battery with the next generation battery technology in
January 2021, and expect to start its user delivery in 2023.
Design Capabilities and Software-driven Vehicle Technologies
We have significant in-house vehicle design and engineering capabilities, which cover all major areas of vehicle development
starting from concept to completion with a special focus on software-driven technologies. For example, our inhouse developed Intelligent
Chassis Unit enables redundancy control, electronic parking brake control, damper control, air spring leveling control, while achieving
functional safety, cyber security and OTA updates.
Our global design team has comprehensive design capabilities across the board, from brand, vehicles, user interface/user
experience, lifestyle products to accessories.
User Development and User Community
We reach out to and engage with our users directly through our own online and offline platforms, including NIO app, NIO
Houses and NIO Spaces, and aim to build a community where we share joy and grow together with our users.
NIO App
NIO app, our mobile application, is designed to be a portal not only for selling vehicles where users can place orders for and
configure all NIO vehicles, but also for vehicle control, service access and NIO Life product purchase, and most importantly, an online
platform for our user community.
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NIO House and NIO Space
NIO Houses and NIO Spaces serve as the offline channels for us to reach out to and serve our users, as well as the offline
platforms for NIO user community.
NIO Houses have showroom functions while serving as a clubhouse for our users and their friends. We opened our first NIO
House in Beijing in November 2017. As of December 31, 2022, we had 99 NIO Houses in total globally.
NIO Spaces are mainly showrooms for our brand, vehicles and services. Compared with NIO Houses, NIO Spaces are generally
smaller in scale, more delicate and sales-focused. As of December 31, 2022, we had 282 NIO Spaces in total globally (excluding NIO
Space Pop-ups).
NIO Day and NIO Events
Our annual NIO Day is an event jointly hosted by NIO and our users where we launch our new products and technologies and
celebrate the user community. In December 2017 in Beijing, we held our first NIO Day and launched the ES8. We had since then held
multiple NIO Days to launch new products and interact with our users and industry participants in the subsequent years. Most recently, in
December 2022, we held the sixth NIO Day in Hefei and launched the EC7 and the All-New ES8.
On October 7, 2022, we held NIO Berlin 2022, and unveiled ET7, EL7 and ET5 for the European markets, including Norway,
Germany, the Netherlands, Denmark and Sweden. We offer our products in Europe through direct sales, leasing programs, as well as
innovative NIO subscription, through which users will be able to choose the vehicle that best suits their needs for a flexible term from
one month to 60 months.
Formula E
We sponsor a Formula E team currently named as NIO 333, which is a racing team that competes in the Fédération
Internationale de l’Automobile, or FIA, Formula E championship electric racing series.
NIO Life
We have established our lifestyle brand NIO Life, which has an online store on NIO app where users can purchase NIO lifestyle
products. The product categories include apparels, home and living, travel and bags, consumer electronics, car life, food and wines. Since
we launched our online store in December 2016, over 8 million NIO Life items have been delivered to our users through online and
offline channels as of December 31, 2022.
NIO Points
We provide users with NIO Points to encourage user engagement and positive user behavior, such as to keep a safe driving
record. NIO Points are earned, among other things, through the welcome packages upon the purchase of NIO vehicles, referrals for test
drives and vehicle purchases, and active engagement in the user community. NIO Points can be used, both at our online store and at our
NIO Houses and some of the NIO Spaces.
NIO Users Trust
In conjunction with our pursuit of being a user enterprise and with the goal of building a deeper connection between NIO and
our users, Mr. Bin Li, our chairman of the board of directors and chief executive officer, transferred a certain amount of his ordinary
shares to NIO User Trust in January 2019. Our users have the opportunity to discuss and propose the use of the economic benefits from
the shares in NIO User Trust through a User Council consisting of members of our user community elected by our users. The User
Council helps coordinate user activities in our community. According to the articles of association of NIO Users Trust, incomes and
proceeds derived from the trust assets shall be mainly used for the following purposes: (i) environmental protection and sustainable
development, (ii) NIO Users community care projects, (iii) community activities promoting common growth of users and other necessary
projects, and (iv) operational expenses of the Users Trust.
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Our Power Solutions
We offer a comprehensive and innovative suite of power solutions to address the charging and swapping needs of our users. Our
power solutions include home charging called Power Home, battery swapping called Power Swap, supercharging piles called Power
Charger, destination charging piles called Destination Charger, and mobile charging called Power Mobile, all of which are connected to
cloud-enabled Power Cloud, which synchronizes users’ power consumption information and our power network, and intelligently
suggests the appropriate services, according to the users’ locations and power consumption patterns. Our users not only get to check the
availability of charging and swapping resources of NIO’s own network, but also have access to a network of public chargers and their
real-time information through the Power Map on our NIO app. In addition, we offer our users our One Click for Power valet service
where we pick up, charge and then return the vehicle. Our goal is to provide the most convenient power solutions to our users.
Power Home
Through Power Home, we install home chargers at our users’ homes upon our users’ requests if the installation is feasible.
Currently we are offering our users standard smart home chargers and high-speed smart home chargers.
Power Swap
All of our vehicles support battery swapping. Once a vehicle is parked in the swap station and the swap function is activated,
battery swapping will take place within minutes. Automatic battery and electric system checks are performed during each swap to
enhance the safety and security of the vehicle and battery.
As of December 31, 2022, we had 1,315 Power Swap stations covering urban areas and expressways globally, through which
we had completed over 15 million battery swaps cumulatively. We plan to strategically deploy more swap stations in selected
geographical areas and enhance the efficiency of the battery swap stations to ensure optimal battery swap experience for our growing
user base.
Power Charger and Destination Charger
Through Power Charger, our supercharging piles, we provide our users a fast and reliable power solution. Users are able to
locate, use and pay for the charging through our NIO app. Our Power Chargers are of a slim design and are located in parking lots and
other locations easily accessible to our users. In December 2022, we introduced the 500kW ultra-fast Power Charger, which has a
maximum current of 660A and a maximum power of 500kW, and it takes only 20 minutes to charge the 100kWh battery pack from 10%
to 80%.
We also deploy chargers in tourist attractions, shopping malls, office buildings, and other types of destinations to expand the
charging network for convenience and flexibility.
As of December 31, 2022, we had more than 13,000 Power Chargers and Destination Chargers in operation. We plan to further
enhance the efficiency and expand the deployment of our chargers to cater to the growing user demand.
Power Mobile
Through Power Mobile, we provide charging services through fast charging vans with our proprietary fast-charging
technologies, supplementing our swapping and charging network. Users are able to book Power Mobile services in advance through our
NIO app.
As of December 31, 2022, we had approximately 300 Power Mobile vans in operation. We regularly adjust the deployment of
Power Mobile vans in China based on our user distribution and user needs and plan to improve the efficiency of these NIO Power Mobile
vans to create better experiences for users.
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Power Map
In addition to our own swapping and charging network, our users have access to a network of public chargers and their real-time
information through the Power Map on our NIO app, which consisted of over 1,000,000 publicly accessible charging piles globally as of
December 31, 2022. In order to further improve user experience, we have been working to increase the number of chargers with data
synchronized to our Power Cloud.
One Click for Power
We offer our users our One Click for Power valet service. Through our NIO app, a user can have our team pick up his or her
vehicle at the user’s designated parking location for valet charging or swapping. We aim to provide users with the most convenient
charging experience by identifying the most appropriate charging solution based on the user’s travel habits through cloud-based smart
scheduling.
Service and Warranty
Our users can access a full suite of innovative services on our NIO app, as part of our strategy of redefining the user experience.
In addition to our battery swapping services, BaaS and NIO Power solutions described above, we offer our users NIO Service, primarily
through our worry-free service plan and worry-free insurance plan. We believe our service capability is among the core competitiveness
we possess.
Service
Service Network
We currently provide servicing both through NIO service centers and authorized third-party service centers, both of which
provide repair, maintenance and bodywork services.
For our NIO service centers, we have dedicated qualified technicians who receive regular professional trainings and skill tests,
which ensures high-quality user services. As of December 31, 2022, we had 75 NIO service centers worldwide. For authorized third-
party service centers, we have a devoted management team to carefully select and bring authorized service centers into our network,
most with experience servicing high-end branded vehicles. As of December 31, 2022, we had 213 authorized service centers worldwide.
Service Plan
We offer our users worry-free service plans and worry-free insurance plans on an annual fee basis in certain regions. The worry-
free service plan provides statutory and third-party liability and vehicle damage insurance through third-party insurers, repair and routine
maintenance services, courtesy vehicles, roadside assistances, optional value-added services, and enhanced data packages, among other
services. The worry-free insurance plan offers selected services, including limited number of maintenance and paint-repair services,
courtesy vehicles, roadside assistances and other additional services at a more competitive price.
Users are able to arrange for vehicle services using our NIO app. At the user’s request, we pick up the vehicle, arrange for
maintenance and repair services, and then return the vehicle to the user once the services are done. We will also assist the user in
engaging with the insurance company and provide necessary support when it is needed.
Auto Financing
We currently have agreements with several commercial banks in China, pursuant to which we assist users across China in
acquiring financing when they purchase our vehicles. We also offer auto financing arrangements to users directly through our
subsidiaries.
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NIO Certified (Used Vehicle Service)
In January 2021, we launched NIO Certified, our used vehicle service, to provide high-quality services for used NIO vehicle
transactions. We have developed the capabilities in the major cities in China to cover services including used vehicle inspection,
evaluation, acquisition and sales. If users are interested in purchasing used NIO vehicles, they can directly find the product information
and place orders on our NIO app.
Warranty Policy
For an initial retail purchaser of a new NIO vehicle in China, in addition to the warranty required under the relevant PRC law,
including (i) a bumper-to-bumper three-year or 120,000-km warranty, (ii) for critical EV components (batteries, electric motors, power
electric units and vehicle control units), an eight-year or 120,000-km warranty, and (iii) a two-year or 50,000-km warranty covering
vehicle repair, replacement and refund, we also provide an extended warranty in China subject to certain conditions. For the owners of
our vehicles in Europe, in addition to the warranty required under the applicable laws and regulations, we also provide an extended
warranty subject to certain conditions. See “Item 3. Key Information — D. Risk Factors — Risks Related to Our Business and Industry
— Our warranty reserves may be insufficient to cover future warranty claims which could adversely affect our financial performance.”
Supply Chain, Manufacturing and Quality Assurance
We view the suppliers and manufacturers we work with as key partners in our vehicle development process. We aim to leverage
our partners’ industry expertise to ensure that each vehicle we produce meets our strict quality standards.
Supply Chain
We work with global and local supply chain partners while the majority of our supply base is located in China, which enables us
to acquire supplies more quickly and reduces the overall logistics-related cost.
We obtain systems, components, raw materials, parts, manufacturing equipment and other supplies and services from suppliers
which we believe to be reputable and reliable. We follow our internal process to source suppliers taking into account quality, cost and
timing. We continuously innovate our supply chain in order to establish a more effective and diverse supply chain system. We actively
cultivate partnerships with suppliers that have innovative technological capabilities and cost advantages, thereby increasing the
competitiveness and innovativeness of our supply chain. While we obtain components from multiple sources whenever possible, many of
the components used in our vehicles are purchased from a single source. Eventually we plan to implement a multi-source volume
purchasing strategy in order to reduce our reliance on sole source suppliers.
We usually enter into our standard form of agreements with our suppliers. Suppliers shall provide to us the goods and services at
terms and conditions as provided under the agreements according to the pre-determined schedule. We typically pay suppliers with respect
to the goods provided after receipt of goods and within 30-90 days upon receipt of invoices issued by suppliers. The suppliers provide
quality warranty for the goods sold to us. Neither we nor the suppliers are allowed to subcontract or assign any obligations under the
agreements. We typically have the right to terminate the agreement with suppliers due to our strategy or business concern by giving a six-
month prior written notice to supplier. In addition, either party has the right to terminate the agreement upon a material default by the
other party. We hold our suppliers to high ethical standards of code of conducts in areas such as human rights, labor conventions such as
prohibition of forced labor and child labor, environmental protection and anti-corruption, and incorporate these standards in our
cooperation agreements with our suppliers.
Manufacturing
Vehicle Manufacturing
We partner with JAC for the joint manufacturing of our vehicles. JAC jointly manufactures with us all of our current vehicle
models, including the ES8, the ES7 (or the EL7), the ES6, the EC7, the EC6, the ET7 and the ET5, in the F1 Plant and the F2 Plant, and
will jointly manufacture with us our other vehicle models in the F2 Plant. The annual production capacity of each of the F1 Plant and the
F2 Plant can be expanded to up to 300,000 units (calculated based on 5,000 working hours per year).
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Pursuant to the joint manufacturing arrangements we entered into with JAC, as amended and renewed, JAC jointly
manufactures with us a series of our current vehicle models, and will jointly manufacture with us our other vehicle models, in the F1
Plant. We are in charge of vehicle development and engineering, supply chain management, manufacturing techniques and quality
management and assurance. Jianglai, who joined as a party to the joint manufacturing arrangements in May 2021, is responsible for parts
assembly and operation management.
Pursuant to the manufacturing cooperation agreements we entered into with JAC in September and December 2022,
respectively, JAC jointly manufactures with us the ET5 and potentially our other vehicle models in the F2 Plant. We are in charge of
relevant trademarks and related technologies license, vehicle specifications, parameters and option requirements, as well as raw materials
supply.
Electric Powertrain Manufacturing
We have established our manufacturing center in Nanjing and Hefei, for the production of electric powertrains, with highly
automated production lines and advanced MES systems and AGVs.
Quality Assurance
We aim to deliver high-quality products and services to our users in line with our core values and commitments. We believe that
our quality assurance systems are the key to ensuring the delivery of high-quality products and services, and to minimize waste and to
maximize efficiency. We have established a Quality Committee for the overall quality management of our company. The Quality
Committee is chaired by our executive vice president, and is responsible for formulating the group-level quality assurance policies,
strategies, goals and initiatives and reviewing the progress of quality goals. We strongly emphasize quality management across all
business functions, including product development, manufacturing, partner quality management, procurement, power solutions, user
experience, service and logistics. Our quality management groups are responsible for our overall quality strategy, quality systems and
processes, quality culture, and general quality management implementation.
In the research and development stage, we have established an FMA (Failure Mode Analysis) sub-committee and a reliability
working group to continuously improve the awareness, knowledge and ability of problem prevention in product design, process design,
service design and other aspects. We have built an NPDP (NIO Product Development Platform) to manage the entire product
development process, efficiently integrating the workflows of various business departments, and achieving high-quality management of
vehicles to be delivered.
In the manufacturing stage, we implement end-to-end quality planning based on product and process characteristics, covering
quality issue prevention, incoming material inspection, in-process inspection, customer review, pre-shipment inspection and rapid
problem resolution. In the meantime, we actively promote the digitalization of manufacturing quality management in various use cases,
including problem management, change point management, vehicle management, personnel management and others. Through intelligent
data monitoring and analysis, we are able to timely detect abnormalities and make corrections.
In terms of supply chain, we have established the NIO Quality Premium Partner evaluation system, which comprehensively
evaluates our partners from various dimensions to achieve effective quality control of the supply chain. On top of the regular audit and
training of our supply chain partners, we organize expert resources of different fields and functions to work together with the supply
chain partners in need of capability enhancement to quickly improve their process assurance and quality control capabilities.
In addition, we collect users’ feedbacks through various channels, such as hotline, NIO app, NIO Fellow, user service group,
and NOMI in our vehicles, and direct these feedbacks to our product experience, service and quality assurance team so as to drive the
fast iteration and improvement in terms of product development, manufacturing and supply chain.
We have obtained the ISO9001 quality management system certification across our group, including our offices in Europe and
the United States, as well as the JAC-NIO manufacturing facility, which provides a strong guarantee for the systematic efficiency of the
company’s operations.
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Certain Other Cooperation Arrangements
Hefei Strategic Investors
On April 29, 2020, we entered into an investment agreement, or the initial investment agreement, and a shareholders agreement,
or the initial shareholders agreement (collectively, the initial agreements), for investments into NIO Holding Co., Ltd. (previously known
as NIO (Anhui) Holding Co., Ltd.), or NIO China, a legal entity wholly owned by us pre-investment, with Hefei City Construction and
Investment Holding (Group) Co., Ltd. (“Hefei Construction Co.”), CMG-SDIC Capital Co., Ltd. (“SDIC”) and Anhui Provincial
Emerging Industry Investment Co., Ltd. (“Anhui High-tech Co.”).
Pursuant to the initial agreements, each investor may designate a fund managed by it or a third party, as applicable, to perform
the investment obligations and assume other rights and obligations under the initial agreements. Accordingly, on June 5, 2020, we
entered into respective supplemental agreements I to the initial agreements with the investors and their respective designated funds,
Jianheng New Energy Fund, Advanced Manufacturing Industry Investment Fund and New Energy Automobile Fund. Under the
supplemental agreements I, (i) Hefei Construction Co. designated Jianheng New Energy Fund to assume all of its rights and obligations
under the initial agreements, (ii) SDIC designated Advanced Manufacturing Industry Investment Fund to assume all of its rights and
obligations under the initial agreements, (iii) Anhui High-tech Co. designated New Energy Automobile Fund to perform a portion of its
investment obligations under the investment agreement and assume the corresponding rights and obligations under the initial agreements,
and (iv) Anhui High-tech Co. will continue to perform the remaining of its investment and other obligations not assigned to New Energy
Automobile Fund and enjoy its rights under the initial agreements. On June 5, 2020, NIO China updated its Industrial and Commercial
Registration to reflect, among others, Jianheng New Energy Fund, Advanced Manufacturing Industry Investment Fund, Anhui High-tech
Co. and New Energy Automobile Fund as NIO China’s investors. On June 18, 2020, we entered into respective supplemental agreements
II with the parties to the supplemental agreements I and Anhui Provincial Sanzhong Yichuang Industry Development Fund Co., Ltd.,
another designated fund of Anhui High-tech Co. Under the supplemental agreements II, Anhui High-tech Co. designated Anhui
Provincial Sanzhong Yichuang Industry Development Fund Co., Ltd. to assume its remaining rights and obligations under the initial
agreements that had not been assigned to New Energy Automobile Fund pursuant to the supplemental agreements I.
The initial investment agreement, as amended and supplemented, is referred to as the Hefei Investment Agreement, and the
initial shareholders agreement, as amended and supplemented, is referred to as the Hefei Shareholders Agreement in this annual report.
The Hefei Investment Agreement and the Hefei Shareholders Agreement are collectively referred to as Hefei Agreements in this annual
report.
Under the Hefei Investment Agreement, the Hefei Strategic Investors agreed to invest an aggregate of RMB7 billion in cash into
NIO China. We agreed to inject our core businesses and assets in China, including vehicle research and development, supply chain, sales
and services and NIO Power, or together as the Asset Consideration, into NIO China. The Asset Consideration is valued at RMB17.77
billion, as calculated based on 85% of the market value of our company (calculated based on our average ADS trading price over the
thirty public trading days preceding April 21, 2020). As of the date of this annual report, the injection of our core businesses and assets
into NIO China had been completed. Further, we agreed to invest RMB4.26 billion in cash into NIO China. Pursuant to the Hefei
Shareholders Agreement, upon the completion of the investments, we held 75.885% of controlling equity interests in NIO China, and the
Hefei Strategic Investors collectively held the remaining 24.115%. In September 2020, February 2021 and September 2021, we, through
one of our wholly-owned subsidiaries, purchased from certain Hefei Strategic Investors equity interests in NIO China and subscribed for
newly increased registered capital of NIO China to increase our shareholding. After the completion of these transactions, as of the date of
this annual report, we hold 92.114% controlling equity interests in NIO China.
Pursuant to the Hefei Agreements, NIO China will establish its headquarters in the Hefei Economic and Technological
Development Area, or the HETA, for its business operation, research and development, sales and services, supply chain and
manufacturing functions. We will collaborate with the Hefei Strategic Investors and HETA to develop NIO China’s business and to
support the accelerated development of the smart electric vehicle sectors in Hefei in the future. In addition, NIO China could enjoy a
series of subsidies and support from HETA, including rent subsidies, financial support and preferential tax treatment, when NIO China
meets certain performance criteria, such as targets for manufacturing capacity, procurement amount and vehicle sales.
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Pursuant to the Hefei Shareholders Agreement, the Hefei Strategic Investors have certain minority shareholder rights, including,
among others, the right of first refusal, co-sale right, preemptive right, anti-dilution right, redemption right, liquidation preference and
conditional drag-along right. In particular, the following rights, among others, directly relate to obligations of NIO Inc.:
● Redemption right. The Hefei Strategic Investors may require us or our Hong Kong holding vehicles, the immediate
holding companies of NIO China, to redeem all or a portion of the equity interests in NIO China held by the Hefei Strategic
Investors at a redemption price of the total amount of the investment price equal to the Hefei Strategic Investors plus an
investment income calculated at a compound rate of 8.5% per annum upon the occurrence of certain events.
● Share transfer restriction. Before NIO China completes its potential qualified initial public offering, without the prior
written consent of the Hefei Strategic Investors, we may not directly or indirectly transfer, pledge or otherwise dispose of
NIO China’s shares to a third party that may result in our shareholding in NIO China fall below 60%. Without the prior
written consent of the Hefei Strategic Investors, we have the right to directly or indirectly transfer, pledge or otherwise
dispose of no more than 15% of NIO China’s shares. A qualified initial public offering refers to an initial public offering
approved, registered or filed with the CSRC, Shanghai Stock Exchange, Shenzhen Stock Exchange or other overseas
securities issuance review agencies jointly approved by all shareholders of NIO China, and NIO China’s shares are issued
and listed on the stock exchange market recognized by all shareholders of NIO China.
● Liquidation preference. In the event that NIO China is liquidated, the Hefei Strategic Investors are guaranteed a minimum
investment return equal to the sum of their capital contribution in NIO China by the Hefei Strategic Investors plus an
investment income calculated at a compound interest rate of 8.5% per annum on the basis of the total amount of their
capital contribution. If the total consideration received by the Hefei Strategic Investors in such liquidation events is not
sufficient to realize the guaranteed minimum investment return, we undertake to compensate separately the shortfall to the
Hefei Strategic Investors in cash. Therefore, we could potentially be liable for the full amount of the minimum investment
return under the Hefei Investment Agreement.
● NIO Parties’ Redemption Right. Before NIO China is converted into a company limited by shares for the purpose of its
qualified initial public offering, we and/or our designated third party have the right to redeem half of the shares Jianheng
New Energy Fund acquired through this investment. The redemption price will be the higher of the following (a) the
amount of the total paid-in capital increase price in respect of the equity interests to be purchased by us or our designated
parties, plus investment income calculated at a simple interest rate of 10% per annum; and (b) the value of the equity
interests to be redeemed by us or our designated parties determined based on the valuation of NIO China in the most recent
round of financing.
● NIO’s Capital Increase right. Before December 31, 2021, we and our affiliates designated by us have the right to
unilaterally subscribe for up to US$600 million purchase price of the then newly increased registered capital of NIO China,
at the same subscription price at which the Hefei Strategic Investors invested in NIO China pursuant to the Hefei
Agreements.
We ensure effective control in NIO China through the following measures: (i) at the shareholder level, as of the date of this
annual report, we held 92.114% controlling equity interests in NIO China; (ii) at the board level, we are entitled to nominate five
directors to the seven-member board of directors of NIO China; (iii) according to NIO China’s shareholders’ agreement, we have the
power to unilaterally direct NIO China’s activities that most significantly impact its economic performance, including but not limited to
the rights to establish operating and financial decisions of NIO China (including budgets) in the ordinary course of business; and (iv) the
Hefei Strategic Investors are entitled to certain veto rights such as change in NIO China’s corporate structure, change of its core business
and amendment to its articles of association, which were not considered as participating rights and would not overcome the presumption
of consolidation by us with a majority voting rights. As a result, we are the controlling shareholder of NIO China and effectively controls
NIO China.
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Subsequent to the entry into the Hefei Agreements, the cash contribution obligations of us and the Hefei Strategic Investors
have all been fulfilled and we have exercised our redemption right and capital increase right described above in September 2020. In
particular, in connection with our exercise of our redemption right, we, through one of our wholly-owned subsidiaries, redeemed from
Jianheng New Energy Fund 50% of the equity interests in NIO China then held by the Jianheng New Energy Fund in September 2020,
which accounted for 8.612% equity interests in NIO China, and the total consideration we paid for such redemption was RMB511.5
million, consisting of the actual capital increase payment Jianheng New Energy Fund had made plus prorated interest accrued at an
interest rate of 10% per annum. In addition, we assumed Jianheng New Energy Fund’s remaining cash contribution obligation of
RMB2.0 billion. In connection with our exercise of our capital increase right, we, through one of our wholly-owned subsidiaries,
subscribed for newly increased registered capital of NIO China at a consideration of US$600 million. In addition, in February 2021, we,
through one of our wholly-owned subsidiaries, also purchased from two of the Hefei Strategic Investors an aggregate of 3.305% equity
interests in NIO China for a total consideration of RMB5.5 billion and subscribed for newly increased registered capital of NIO China at
a subscription price of RMB10.0 billion. In September 2021, we, through one of our wholly-owned subsidiaries, purchased from a
minority strategic investor of NIO China an aggregate of 1.418% equity interests in NIO China for a total consideration of RMB2.5
billion and subscribed for newly increased registered capital of NIO China at a subscription price of RMB7.5 billion.
As a result of these transactions, as of the date of this annual report, the registered capital of NIO China was RMB6.429 billion,
and we held 92.114% controlling equity interests in NIO China. We have fulfilled all obligations due to be fulfilled under the Hefei
Agreements as of the date of this annual report.
Battery Asset Company
In August 2020, we and the Battery Asset Company Investors jointly established the Battery Asset Company. We and the Initial
BaaS Investors each invested RMB200 million and held 25% equity interests in the Battery Asset Company at its establishment. In
December 2020, April 2021, August 2021 and July 2022, respectively, the Battery Asset Company entered into agreements with new and
existing investors for additional financing. As of the date of this annual report, we beneficially own approximately 19.4% of the equity
interests in the Battery Asset Company.
Competition
Competition in the automotive industry is intense and evolving. We believe the impact of shifting user needs and expectations,
favorable government policies towards new energy vehicles, expanding charging infrastructure, and technological advances in electric
components are causing the industry to evolve in the direction of electric-based vehicles. We believe the primary competitive factors in
our markets are:
● pricing;
● technological innovation;
● vehicle performance, quality and safety;
● service and charging options;
● user experience;
● design and styling; and
● manufacturing efficiency.
The automotive market is highly competitive and we expect it will become more competitive in the future as additional players
enter into this market. We compete with ICE vehicles as well as new energy vehicles. Many of our current and potential competitors have
significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater
resources to the design, development, manufacturing, marketing sales and service of their products. We expect competition in our
industry to intensify in the future in light of increased demand and regulatory push for alternative fuel vehicles, continuing globalization
and consolidation in the worldwide automotive industry.
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Intellectual Property
We have developed a number of proprietary systems and technologies. We designed and developed electric powertrain in-house.
The new-generation electric powertrain features Silicon Carbide power modules which can minimize switching loss and improve energy
efficiency. We jointly designed and developed the 75 kWh hybrid and the 100 kWh NCM battery with our proprietary battery
management system. We have built up the NAD capability with in-house developed perception algorithms, localization, control strategy
and platform software. As a result, our success depends, at least in part, on our ability to protect our core technology and intellectual
property, including our registered patents for electric powertrain, battery and autonomous driving technologies. To accomplish this, we
rely on a combination of patents, patent applications and trade secrets, including employee and third-party nondisclosure agreements,
copyright laws, trademarks, intellectual property licenses and other contractual rights to establish and protect our proprietary rights in our
technology. We will actively monitor and pursue claims against unauthorized use of our intellectual property.
As of December 31, 2022, we had 3,703 issued patents and 2,338 pending patent applications, 4,723 registered trademarks and
1,739 pending trademark applications in the United States, China, Europe and other jurisdictions. As of December 31, 2022, we also held
or otherwise had the legal right to use 188 registered copyrights for software or works of art and approximately 671 registered domain
names, including www.nio.io. We intend to continue to file additional patent applications with respect to our technology.
Environmental, Social and Governance
With the mission of shaping a joyful lifestyle for our users, we are committed to leverage our technologies, products and
services to be a force for good in the aspects of environmental, social and governance (“ESG”). With the guidelines from the United
Nation Global Compact, United Nation Sustainable Development Goals, and Global Reporting Initiative, we have identified the
following three pillars in our ESG initiatives, which have been integrated into our business operations and corporate governance.
Environmental Sustainability
Blue Sky Coming is our guiding philosophy since our inception and our vision for a brighter future. Focusing on low-carbon
development, ecological protection and environmental management, we make efforts to put the concept of sustainability into practice
through the whole lifecycle of the green industry chain and build a green eco-system with upstream and downstream partners.
At the product design and development stage, based on the philosophy of design for sustainability, we conduct comprehensive
research on the availability and application of low-carbon technologies and materials, and apply them on our products to reduce the
carbon emission and energy consumption of our product portfolio. During the manufacturing process, NIO continues to improve and
carry forward its green manufacturing system by carrying out intensive green space construction, empowering digital management and
committing to low-carbon energy utilization. In addition, we implemented water, aluminum and other scrap material recycling in our
plant and aim to further expand our recycling efforts throughout the product lifecycle.
Moreover, we have initiated a series of activities together with different stakeholders to protect the environment and support the
broader community. We launched Clean Parks, an ecosystem co-conservation initiative co-initiated with the World Wide Fund for Nature
(WWF) and the United Nations Development Programme (UNDP). As of the end of 2022, we have rolled out the initiative in thirteen
ecologically sensitive areas globally.
Social Sustainability
At NIO, we are fully committed to being socially responsible and making a positive impact on the society. Driven by user
experience, we integrate quality, safety, and innovation into the whole lifecycle management of products and services, which not only
covers research and development, supply chain, manufacturing and user service, but also includes innovative business models based on
core technologies, aligning user needs with full-lifecycle user experiences. We have formulated a Quality Manual at the corporate level,
which defines the quality management requirements for the entire business chain, from product development, supply chain,
manufacturing and logistics to user experience and service quality.
NIO has built a user community extending from personal growth to community development and user co-creation. To further
understand the demands of users and improve our service quality, NIO has set up a multi-dimensional satisfaction survey mechanism and
the user satisfaction rate reached 4.88/5 in 2021.
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As a member of the United Nations Global Compact, NIO is committed to fulfilling the standards and requirements of the
Universal Declaration of Human Rights and the Declaration of the International Labour Organization on Fundamental Principles and
Rights at Work, and has integrated them into internal systems and polices. We focus on identifying and attracting talent from diverse
backgrounds across the globe and aim to facilitate the long-term development of employees through a value-driven mechanism based on
NIO value system. We have established a unique career development system, NIO Career Path system, providing different development
paths for employees in different positions. On top of our employee stock ownership plan and compulsory benefits and insurances
covering all employees, we also offer our employees various supplementary benefits and organize various employee activities to enrich
employees’ lives and improve their wellbeing. To proactively collect feedback from employees, NIO conducts an annual employee
satisfaction survey covering all employees and the satisfaction survey results was 4.09/5, with the value system scoring the highest,
4.49/5.
We have established various corporate social responsibility initiatives to comprehensively give back to the communities and to
create value for the society. We are the sponsor of the Formula E Student China, a competition event where college students design and
race electric racing vehicles, allowing us to nurture the young talent for the future of the automotive industry. In addition, NIO Users
Trust has been making continuous contributions to public welfare projects, including rural revitalization, emergency assistant, user care
and charity donations, and collaborating with third-party organizations in various projects with the goal to achieve a balance between
social benefits and economic development.
Corporate Governance
We strictly abide by all laws and regulations and aim to protect the rights and interests of shareholders, enhance corporate value,
guide the formulation of business strategies and policies, and increase corporate transparency. To promote our sustainable development
and strengthen the effectiveness of governance, we appropriately balance the diversity among board members and management team. As
a vital part of our company, our management and board members contribute their insights into the strategic decision-making process by
drawing on their gender perspective and diversified industry and technical background. We also aim to develop a pipeline of potential
female successors to the Board to increase the percentage of female Board representatives in the coming years.
As a responsible company, we serve the long-term value of our business and act with integrity and ethics. We established
comprehensive internal ethics and compliance system and polices to manage our business behavior and prohibit corruption, bribery,
extortion, fraud, money laundering, monopoly and unfair competition, and insider trading. For enabling a comprehensive supervision of
ethics, we set up the reporting mechanism with whistle-blower protection. In addition, we carry out integrity training for all employees
every year, and implement standardized management of the performance of their duties.
To provide solid support for business development, NIO has established a comprehensive information security management
system, and has been improving the system constantly in line with applicable laws and regulations in the countries and regions where we
conduct business, supporting smooth business operations of our company and protecting the security of user information.
To support our mission and advance our ESG initiatives, Nominating and ESG Committee oversees and manages our ESG
strategies, policies, and performance, and reports to our board of directors regarding the ESG progress to align the ESG related affairs
with the overall strategy of our company. The ESG steering team under the Nominating and ESG Committee takes charges of the
implementation of ESG initiatives and projects, and leads the ESG coordination team and the ESG responsible personnel in relevant
departments to execute ESG-related specific measures.
Seasonality
In the past few years, demand for new vehicles in the automotive industry were generally higher in the fourth quarter. Such
variation may or may not continue in the future. Our limited operating history makes it difficult for us to judge the exact nature or extent
of the seasonality of our business. Also, any unusually severe weather conditions in some markets may impact demand for our vehicles.
Insurance
We maintain various insurance policies required by PRC laws and regulations to safeguard against risks and unexpected events.
We consider that the coverage from the insurance policies maintained by us is in line with the industry norm. We do not have any
business liability or disruption insurance to cover our operations. For the years ended December 31, 2020, 2021 and 2022, we have not
made, nor been the subject of, any material insurance claim.
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Regulation
This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.
Regulations and Approvals Covering the Manufacturing of New Energy Vehicles
The NDRC promulgated the Provisions on Administration of Investment in Automobile Industry (the “Investment Provisions”),
which became effective on January 10, 2019. According to the Investment Provisions, enterprises are encouraged to, through equity
investment and cooperation in production capacity, enter into strategic cooperation relationship, carry out joint research and development
of products, organize manufacturing activities jointly and increase industrial concentration. The advantageous resources in production,
high learning, research, application and other areas shall be integrated and core enterprises in automobile industry shall be propelled to
form industrial alliance and industrial consortium.
According to the Regulations on the Administration of Newly Established Pure Electric Passenger Vehicle Enterprises, which
became effective on July 10, 2015, before our vehicles (including our current vehicles manufactured in cooperation with JAC) can be
added to the Announcement of Vehicle Manufacturers and Products (the “Manufacturers and Products Announcement”), issued by the
MIIT, a procedure that is required in order for our vehicles to be approved for manufacture and sale in China, our vehicles must meet the
applicable requirements set forth in relevant laws and regulations. Such relevant laws and regulations include, among others, the
Administrative Rules on the Admission of New Energy Vehicle Manufacturers and Products (the “MIIT Admission Rules”), which
became effective on July 1, 2017 and was amended on July 24, 2020, and the Administrative Rules on the Admission of Passenger
Vehicles Manufacturer and Products, which became effective on January 1, 2012, and pass the review by the MIIT. NEVs that have
entered into the Manufacturers and Products Announcement are required to undergo regular inspection every three years by the MIIT so
that the MIIT may determine whether the vehicles remain qualified to stay in the Manufacturers and Products Announcement.
According to the MIIT Admission Rules, in order for our vehicles to enter into the Manufacturers and Products Announcement,
our vehicles must satisfy certain conditions, including, among others, meeting certain standards set out therein, meeting other safety and
technical requirements specified by the MIIT, and passing inspections conducted by a state-recognized testing institution. Once such
conditions for vehicles are met and the application has been approved by the MIIT, the qualified vehicles are published in the
Manufacturers and Products Announcement by the MIIT. Where any new energy vehicle manufacturer manufactures or sells any model
of a new energy vehicle without the prior approval of the competent authorities, including being published in the Manufacturers and
Products Announcement by the MIIT, it may be subject to penalties, including fines, forfeiture of any illegally manufactured and sold
vehicles and spare parts and revocation of its business licenses.
Regulations on Compulsory Product Certification
Under the Administrative Regulations on Compulsory Product Certification which was promulgated by the General
Administration of Quality Supervision, Inspection and Quarantine (the “QSIQ”, which has been merged into the SAMR), on July 3,
2009 and was latest amended on September 29, 2022 and became effective on November 1, 2022, and the List of the First Batch of
Products Subject to Compulsory Product Certification which was promulgated by the QSIQ in association with the State Certification
and Accreditation Administration Committee on December 3, 2001 and became effective on May 1, 2002, SAMR, as the successor of
QSIQ, is responsible for the regulation and quality certification of automobiles. Automobiles and parts and components must not be sold,
exported or used in operating activities until they are certified by designated certification authorities of the PRC as qualified products and
granted certification marks.
Regulations Relating to Parallel Credits Policy on Vehicle Manufacturers and Importers
On September 27, 2017, the MIIT, the Ministry of Finance, or the MOF, the MOFCOM, the General Administration of Customs
of PRC and the SAMR jointly promulgated the Measure for the Parallel Administration of the Corporate Average Fuel Consumption
and New Energy Vehicle Credits of Passenger Vehicle Enterprises (the “Parallel Credits Measure”), which were most recently amended
on June 15, 2020 and took effect on January 1, 2021. Under the Parallel Credits Measure, each of the vehicle manufacturers and vehicle
importers above a certain scale is required to, among other things, maintain its new energy vehicles credits, or the NEV credits, and
corporate average fuel consumption credits, above zero, regardless of whether NEVs 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 calculating NEV credits.
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NEV credits are equal to the aggregate actual scores of a vehicle manufacturer or a vehicle importer minus its aggregate targeted
scores. According to the Parallel Credits Measure, the actual scores shall be calculated by multiplying the score of each new energy
vehicle model, which depends on various metrics such as the driving range, battery energy efficiency and the rated power of fuel cell
systems, and is calculated based on formula published by MIIT (in the case of battery electric vehicle, the NEV credit of each vehicle is
equal to (0.0056 x Vehicle Mileage + 0.4) x Mileage Adjustment Coefficient x Battery Energy Density Adjustment Coefficient x
Electricity Consumption Coefficient), by the respective production or import volume, while the targeted scores shall be calculated by
multiplying the annual production or import volume of traditional ICEs of a vehicle manufacturer or importer by the NEV credit ratio set
by the MIIT. The NEV credit ratios are 14%, 16% and 18% for the years of 2021, 2022 and 2023, respectively, increasing from 10% and
12% for 2019 and 2020, respectively. Excess positive NEV credits are tradable and may be sold to other enterprises through a credit
management system established by the MIIT while excess positive corporate average fuel consumption credits can only be carried
forward or transferred among related parties. Negative NEV credits can be offset by purchasing excess positive NEV credits from other
manufacturers or importers.
According to these measures, the requirements on the NEV credits shall be considered for the entry approval of passenger
vehicle manufacturers and products by the regulators. If a passenger vehicle enterprise fails to offset its negative credits, its new
products, if the fuel consumption of which does not reach the target fuel consumption value for a certain vehicle models as specified in
the Evaluation Methods and Indicators for the Fuel Consumption of Passenger Vehicles, will not be listed in the Announcement of the
Vehicle Manufacturers and Products issued by the MIIT, or will not be granted the compulsory product certification, and the vehicle
enterprises may be subject to penalties according to the relevant rules and regulations.
Regulations on Electric Vehicle Charging Infrastructure
Pursuant to the Guidance Opinions of the General Office of the State Council on Accelerating the Promotion and Application of
the New Energy Vehicles, which became effective on July 14, 2014, the Guidance Opinions of the General Office of the State Council on
Accelerating the Development of Charging Infrastructures of the Electric Vehicle, which became effective on September 29, 2015, the
Guidance on the Development of Electric Vehicle Charging Infrastructure (2015-2020), which became effective on October 9, 2015, and
the Development Plan for the New-energy Vehicle Industry (2021-2035), which became effective on October 20, 2020, the PRC
government encourages the construction and development of charging infrastructure for electric vehicles, such as charging stations and
battery swap stations, and only centralized charging and battery replacement power stations are required to obtain approvals for
construction, permits from the relevant authorities.
The Circular on Accelerating the Development of Electrical Vehicle Charging Infrastructures in Residential Areas promulgated
on July 25, 2016 provides that the operators of electrical vehicle charging and battery swap infrastructure are required to be covered
under liability insurance policies to protect the purchasers of electric vehicles, covering the safety of electric vehicle charging.
Regulations on Automobile Sales
Pursuant to the Administrative Measures on Automobile Sales promulgated by the MOFCOM, April 5, 2017, which became
effective on July 1, 2017, automobile suppliers and dealers are required to file with relevant authorities through the information system
for the national automobile circulation operated by the competent commerce department within 90 days after the receipt of a business
license. Where there is any change to the information concerned, automobile suppliers and dealers must update such information within
30 days after such change.
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Regulations on the Recall of Defective Automobiles
On October 22, 2012, the State Council promulgated the Administrative Provisions on Defective Automotive Product Recalls,
which became effective on January 1, 2013 and were amended on March 2, 2019. The product quality supervision department of the
State Council is responsible for the supervision and administration of recalls of defective automotive products nationwide. Pursuant to
the administrative provisions, manufacturers of automobile products are required to take measures to eliminate defects in products they
sell. A manufacturer must recall all defective automobile products. Failure to recall such products may result in an order to recall the
defective products from the quality supervisory authority of the State Council. If any operator conducting sales, leasing, or repair of
vehicles discovers any defect in automobile products, it must cease to sell, lease or use the defective products and must assist
manufacturers in the recall of those products. Manufacturers must recall their products through publicly available channels and publicly
announce the defects. Manufacturers must take measures to eliminate or cure defects, including rectification, identification, modification,
replacement or return of the products. Manufacturers that attempt to conceal defects or do not recall defective automobile products in
accordance with relevant regulations will be subject to penalties, including fines, forfeiture of any income earned in violation of law and
revocation of licenses.
Pursuant to the Implementation Rules on the Administrative Provisions on Defective Automotive Product Recalls, which became
effective on January 1, 2016 and was latest amended on October 23, 2020, if a manufacturer is aware of any potential defect in its
automobiles, it must investigate in a timely manner and report the results of such investigation to the SAMR. Where any defect is found
during the investigations, the manufacturer must cease to manufacture, sell, or import the relevant automobile products and recall such
products in accordance with applicable laws and regulations.
On November 23, 2020, the SAMR issued the Circular on Further Improving the Regulation of Recall of Automobile with Over-
the-Air (OTA) Technology, pursuant to which automobiles manufacturers that provide technical services through OTA are required to
complete filing with the SAMR and those who have provided such services through OTA must complete such filing before December 31,
2020. In addition, if an automaker uses OTA technology to eliminate defects and recalls its defective products, it must make a recall plan
and complete a filing with the SAMR.
Regulations on Product Liability
Pursuant to the Product Quality Law of the PRC, promulgated on February 22, 1993 and latest amended on December 29, 2018,
a manufacturer is prohibited from producing or selling products that do not meet applicable standards and requirements for safeguarding
human health and ensuring human and property safety. Products must be free from unreasonable dangers threatening human and property
safety. Where a defective product causes physical injury to a person or property damage, the aggrieved party may make a claim for
compensation from the producer or the seller of the product. Producers and sellers of non-compliant products may be ordered to cease
the production or sale of the products and could be subject to confiscation of the products and/or fines. Earnings from sales in
contravention of such standards or requirements may also be confiscated, and in severe cases, an offender’s business license may be
revoked.
Favorable Government Policies Relating to New Energy Vehicles in the PRC
On November 2, 2020, the State Council issued the Development Plan for the New-energy Vehicle Industry (2021-2035), in
order to boost the high-quality development of NEVs from 2021 to 2035. The development plan is implemented with a view to achieve
the following goals: (i) by 2025, the average power consumption of NEVs will drop to 12.0 kWh per 100 kilometers. The sales volume
of NEVs will reach around 20% of the total sales volume of new vehicles, and highly autonomous vehicles will achieve commercial
applications in limited areas and specific scenarios; (ii) by 2035, pure electric vehicles shall become the mainstream of new vehicles for
sale. Vehicle use in public areas shall achieve full electrification, fuel cell vehicles shall achieve commercialized application, and highly
autonomous vehicles shall achieve large-scale application, in order to effectively promote the improvement of energy saving and
emission reduction level and social operation efficiency.
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Government Subsidies for Purchases of New Energy Vehicles
On April 22, 2015, the MOF, the Ministry of Science and Technology, or the MOST, the MIIT and the NDRC jointly issued
the Circular on the Financial Support Policies on the Promotion and Application of New Energy Vehicles in 2016-2020 (the “Financial
Support Circular”), which took effect on the same day. The Financial Support Circular provides that those who purchase new energy
vehicles specified in the Catalogue of Recommended New Energy Vehicle Models for Promotion and Application by the MIIT, may
obtain subsidies from the PRC national government. Pursuant to the Financial Support Circular, a purchaser may purchase a new energy
vehicle from a seller by paying the original price minus the subsidy amount, and the seller may obtain the subsidy amount from the
government after such new energy vehicle is sold to the purchaser. The Financial Support Circular also provided a preliminary phase-out
schedule for the provision of subsidies.
On December 29, 2016, the MOF, the MOST, the MIIT and the NDRC jointly issued the Circular on Adjusting the Subsidy
Policy for the Promotion and Application of New Energy Vehicles (the “Circular on Adjusting the Subsidy Policy”), which took effect
on January 1, 2017, to adjust the existing subsidy standard for purchases of new energy vehicles. The Circular on Adjusting the Subsidy
Policy capped the local subsidies at 50% of the national subsidy amount, and further specified that national subsidies for purchasers
purchasing certain new energy vehicles (except for fuel cell vehicles) from 2019 to 2020 would be reduced by 20% as compared to 2017
subsidy standards.
The subsidy standard is reviewed and updated on an annual basis. The 2020 subsidy standard, effective from April 23, 2020,
was provided in the Circular on Improving the Subsidy Policies for the Promotion and Application of New Energy Vehicles jointly
promulgated by the MOF, the MOST, the MIIT and the NDRC on the same day. The 2020 subsidy standard reduces the base subsidy
amount by 10% for each NEV, sets subsidies for 2 million vehicles as the upper limit of annual subsidy scale; and provides that national
subsidy shall only apply to an NEV that is either (i) with the sale price under RMB300,000 or (ii) equipped with battery swapping
mechanism. Given all of our vehicles are equipped with battery swapping mechanism, purchasers of all of our vehicles, regardless of
sales price, are eligible to enjoy the subsidies provided by the PRC government to purchases of new energy vehicles. The 2021 subsidy
standard, effective from January 1, 2021, was provided in the Circular on Further Improving the Subsidy Policies for the Promotion and
Application of New Energy Vehicles jointly promulgated by the MOF, the MOST, the MIIT and the NDRC on December 31, 2020. The
2021 subsidy standard reduces the base subsidy amount by 20% for each NEV on the basis of that for the previous year. Further, the
current 2022 subsidy standard, effective from January 1, 2022, was provided in the Circular on Financial Subsidy Policies for the
Promotion and Application of New Energy Vehicles in Year 2022 jointly promulgated by the MOF, the MOST, the MIIT and the NDRC
on December 31, 2021. The current 2022 subsidy standard reduces the base subsidy amount by 30% for each NEV from that for the
previous year. The new energy vehicles subsidy policy was terminated on December 31, 2022.
Exemption of Vehicle Purchase Tax
On December 26, 2017, the MOF, the STA, the MIIT and the MOST jointly issued the Announcement on Exemption of Vehicle
Purchase Tax for New Energy Vehicle. On June 28, 2019, the MOF and the STA jointly issued the Announcement on Renewal of
Preferential Policies on Vehicle Purchase Tax. Pursuant to the two announcements, from January 1, 2018 to December 31, 2020, the
vehicle purchase tax which is applicable for ICE vehicles is not imposed on purchases of qualified new energy vehicles listed in the
Catalogue of New Energy Vehicle Models Exempt from Vehicle Purchase Tax (the “NEV Catalogue”), issued by the MIIT. Such
announcement provides that the policy on exemption of vehicle purchase tax is also applicable to new energy vehicles added to the NEV
Catalogue prior to December 31, 2017. On April 16, 2020, the MOF, the STA and the MIIT jointly issued the Announcement on
Exemption of Vehicle Purchase Tax for New Energy Vehicle, with effect from January 1, 2021, which extends the vehicle purchase tax
exemption period provided under the above two announcements till December 31, 2022. On September 18, 2022, the MOF, the STA and
the MIIT jointly issued the Announcement on Continuation of Policies for Exemption of Vehicle Purchase Tax for New Energy Vehicle,
with effect from September 18, 2022, which provides that the new energy vehicles purchased during the period from January 1, 2023 to
December 31, 2023 will be exempted from the vehicle purchase tax.
Non-imposition of Vehicle and Vessel Tax
The Notice on Preferential Vehicle and Vessel Tax Policies for Energy-saving and New-energy Vehicles and Vessels, which was
jointly promulgated by the MOF, the Ministry of Transport, the STA and the MIIT on July 10, 2018, clarifies that NEVs are not subject
to vehicle and vessel tax.
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New Energy Vehicle License Plate
In recent years, in order to control the number of motor vehicles on the road, certain local governments have issued restrictions
on the issuance of vehicle license plates. These restrictions generally do not apply to the issuance of license plates for new energy
vehicles, which makes it easier for purchasers of new energy vehicles to obtain automobile license plates. For example, pursuant to the
Implementation Measures on Encouraging Purchase and Use of New Energy Vehicles in Shanghai, local authorities will issue new
automobile license plates to qualified purchasers of new energy vehicles without requiring such qualified purchasers to go through
certain license-plate bidding processes and to pay license-plate purchase fees as compared with purchasers of ICE vehicles.
Regulations on Value-added Telecommunications Services
In 2000, the State Council promulgated the Telecommunications Regulations of the PRC (the “Telecommunications
Regulations”), which was most recently amended in February 2016 and provides a regulatory framework for telecommunications
services providers in the PRC. The Telecommunications Regulations categorize all telecommunications businesses in China as either
basic or value-added. Value-added telecommunications services are defined as telecommunications and information services provided
through public network infrastructure. Pursuant to the Classified Catalogue of Telecommunications Services, an attachment to the
Telecommunications Regulations, which was most recently updated in June 2019 by the MIIT, internet information services, or ICP
services, are classified as value-added telecommunications services. Under the Telecommunications Regulations and relevant
administrative measures, commercial operators of value-added telecommunications services must first obtain a license for conducting
Internet content provision services, or an ICP license, from the MIIT or its provincial level counterparts. Otherwise, such operator might
be subject to sanctions, including corrective orders and warnings, imposition of fines and confiscation of illegal gains and, in the case of
significant infringement, orders to close the website.
Pursuant to the Administrative Measures on Internet Information Services, promulgated by the State Council in 2000 and
amended in 2011, “internet information services” refer to the provision of information through the internet to online users, and are
divided into “commercial internet information services” and “non-commercial internet information services.” A commercial ICP service
operator must obtain an ICP license before engaging in any commercial ICP service within China, while the ICP license is not required if
the operator will only provide internet information on a non-commercial basis.
In addition to the regulations and measures above, the provision of commercial internet information services on mobile internet
applications are regulated by the Administrative Provisions on Information Services of Mobile Internet Applications, promulgated by the
CAC in June 2022, which became effective on August 1, 2022 and replaces its predecessor regulation. Pursuant to these provisions, the
mobile internet applications providers shall acquire relevant qualifications required by laws and regulations and implement the
information security management responsibilities strictly and fulfill their obligations, including real-name system, protection of users’
information, examination and management of information content, etc., and shall comply with relevant provisions on the scope of
necessary personal information when engaging in personal information processing activities. In addition, such providers shall not compel
the user to agree to the processing of personal information for any reason and refuse the user to use its basic functions and services as the
user does not agree to provide non-essential personal information.
The Regulations for the Administration of Foreign-Invested Telecommunications Enterprises, promulgated by the State Council
on December 11, 2001 and last amended on March 29, 2022, which became effective on May 1, 2022, requires that the ultimate foreign
equity ownership in a value-added telecommunications services provider may not exceed 50%, except as otherwise stipulated by the
state. In addition, the telecommunications enterprises must obtain approval from the MIIT, or its authorized local counterparts, before
launching the value-added telecommunications business in China.
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Regulations on Autonomous Driving
On July 27, 2021, the MPS and the Ministry of Transport issued Administration of Road Testing and Demonstration Application
of Intelligent Connected Vehicles (Trial Implementation) (the “Circular No. 97”), which became effective on September 1, 2021, and is
the primary regulation governing protocol of road testing and demonstration application of intelligent connected vehicles in the PRC.
Pursuant to the Circular No. 97, any entity intending to conduct the road testing and demonstration application of intelligent connected
vehicles must apply for and obtain a temporary license plate for each tested vehicle. To qualify for such temporary license plate, an
applicant entity must satisfy, among others, the following requirements: (i) it must be an independent legal person registered under PRC
law with the capacity to conduct manufacturing, technological research or testing of automobiles and automobile parts, which has
established protocols to test and assess the performance of autonomous driving functionalities of intelligent connected vehicles and is
capable of conducting real-time remote monitor of the tested vehicles, and has the ability to ensure the network security of tested
vehicles and remote monitoring platform; (ii) the tested vehicle must be equipped with a driving system that can switch between
autonomous driving mode and human driving mode in a safe, quick and simple manner and ensures human driver to take control of the
tested vehicle any time immediately when necessary; (iii) the tested vehicle must be equipped with the function of recording, storing and
real-time monitoring the condition of the tested vehicle and is able to transmit real-time data of the tested vehicle, such as the control
mode, location and speed; (iv) it must sign an employment contract or a labor service contract with the driver of the tested vehicle, who
must be a licensed driver of corresponding vehicle types with more than three years’ driving experience and a track record of safe driving
and is familiar with the testing protocol or application scheme for autonomous driving system and proficient in operating the system; and
(v) it must provide the Safety Self-declaration, the result of risk assessment on network security, the proof of corresponding measures
taken against such risk and other materials to the competent department, and insure each tested vehicle for at least RMB5 million against
vehicle accidents or provide a letter of guarantee covering the same. In addition, as to the demonstration application, the applicant entity
could also be a consortium of several independent legal persons and has the operational capability of demonstration application and
relevant scheme.
During the road testing and demonstration application, the tested vehicle shall be marked with the words such as “autonomous
driving road test” or “for autonomous driving demonstration purposes” in a noticeable manner and the autonomous driving mode shall
not be used unless in the permitted areas specified in the Safety Self-declaration, and the entity shall not make any changes of software
and hardware that may affect the function and performance of the tested vehicle without providing the relevant safety description
materials to the competent department in advance. In addition, the entity is required to submit to the competent department a periodical
report every six months and a final report within one month after the completion of road testing and demonstration application. In the
case of a vehicle accident which causes severe injury or death of personnel or vehicle damage, the entity must report such accident to the
competent department within 24 hours and submit a comprehensive analysis report in writing covering cause analysis, final liability
allocation results, etc. within five working days after the traffic enforcement agency determines the liability for the accident.
On March 24, 2021, the MPS issued the Draft Proposed Amendments of the Road Traffic Safety Law (the “MPS Proposed
Amendments”). The MPS Proposed Amendments clarify, among others, the requirements related to road testing of, and access by,
vehicles equipped with autonomous driving functions, as well as regulating how liability for traffic violations and accidents will be
allocated. The MPS Proposed Amendments stipulate that vehicles equipped with autonomous driving functions should first pass tests in
closed roads and venues and obtain temporary license plates before embarking on road testing. Further such road testing should be
conducted at designated times, areas and routes in accordance with the law. After passing the road test, vehicles equipped with
autonomous driving functions can be manufactured, imported and sold in accordance with the relevant laws and regulations, and those
needing access to the road must apply for motor vehicle number plates. The MPS Proposed Amendments provide that when vehicles
equipped with autonomous driving functions and human driving modes are involved in road traffic violations or accidents, the
responsibility of the driver or the autonomous driving system developer shall be determined in accordance with laws, as well as the
liability for damage. For vehicles on the road that are equipped with autonomous driving functions without human driving modes, this
liability issue should be separately dealt with by relevant departments of the State Council.
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According to the Notice on Promoting the Development of Intelligent Connected Vehicles and Maintaining the Security of
Surveying and Mapping Geographic Information issued by the Ministry of Natural Resources of the PRC on August 25, 2022, if an
intelligent connected vehicle is equipped with or integrated with certain sensors, the collection, storage, transmission and processing of
surveying and mapping geographic information and data, including spatial coordinates, images, point clouds and their attribute
information, of vehicles and surrounding road facilities in the process of road test, will be considered surveying and mapping activities.
Persons who collect, store, transmit and process such surveying and mapping geographic information and data, will be the main actors of
surveying and mapping activities. Additionally, if any vehicle manufacturer, service provider or smart driving software provider that is a
domestic enterprise needs to engage in the collection, storage, transmission and processing of surveying and mapping geographic
information and data, it shall obtain the corresponding surveying and mapping qualification or entrust an agency with the corresponding
surveying and mapping qualification to carry out the intended activities; if any vehicle manufacturer, service provider or smart driving
software provider that is a foreign-invested enterprise needs to engage in the collection, storage, transmission and processing of
surveying and mapping geographic information and data, it shall entrust an agency with corresponding surveying and mapping
qualification to carry out the intended activities, and the entrusted agency shall undertake the collection, storage, transmission and
processing of the relevant spatial coordinates, images, point clouds and their attribute information and other businesses, and provide
geographic information service and support.
Regulations on Consumer Rights Protection
Our business is subject to a variety of consumer protection laws, including the PRC Consumer Rights and Interests Protection
Law, as amended in 2013 and became effective on March 15, 2014, which imposes stringent requirements and obligations on business
operators. Failure to comply with these consumer protection laws could subject us to administrative sanctions, such as the issuance of a
warning, confiscation of illegal income, imposition of fines, an order to cease business operations, revocation of business licenses, as
well as potential civil or criminal liabilities.
Regulations on Internet Information Security and Privacy Protection
In December 2012, the SCNPC promulgated the Decision on Strengthening Network Information Protection, or the Network
Information Protection Decision, to enhance the legal protection of information security and privacy on the internet. The Network
Information Protection Decision also requires internet operators to take measures to ensure confidentiality of information of users.
In July 2013, the MIIT promulgated the Provisions on Protection of Personal Information of Telecommunication and Internet
Users to regulate the collection and use of users’ personal information in the provision of telecommunication service and internet
information service in China.
On July 1, 2015, the SCNPC promulgated the PRC National Security Law, which came into effect on the same day. The PRC
National Security Law provides that the state shall safeguard the sovereignty, security and cyber security development interests of the
state, and that the state shall establish a national security review and supervision system to review, among other things, foreign
investment, key technologies, internet and information technology products and services, and other important activities that are likely to
impact the national security of the PRC.
In August 2015, the SCNPC promulgated the Ninth Amendment to the Criminal Law, which became effective in November
2015 and amended the standards of crime of infringing citizens’ personal information and reinforced the criminal culpability of unlawful
collection, transaction, and provision of personal information. It further provides that any ICP provider that fails to fulfill the obligations
related to internet information security administration as required by applicable laws and refuses to rectify upon orders will be subject to
criminal liability.
In November 2016, the SCNPC promulgated the Cyber Security Law of the PRC (the “Cyber Security Law”), which became
effective on June 1, 2017. The Cyber Security Law requires that a network operator take technical measures and other necessary
measures in accordance with applicable laws and regulations and the compulsory requirements of the national and industrial standards to
safeguard the safe and stable operation of its networks. We are subject to such requirements as we are operating internet of vehicles, a
website and mobile application and providing certain internet services mainly through our mobile application. The Cyber Security Law
further requires network operators to formulate contingency plans for network security incidents, report to the competent departments
immediately upon the occurrence of any incident endangering cyber security and take corresponding remedial measures.
Network operators are also required to maintain the integrity, confidentiality and availability of network data. The Cyber
Security Law reaffirms the basic principles and requirements specified in other existing laws and regulations on personal data protection,
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such as the requirements on the collection, use, processing, storage and disclosure of personal data, and network operators being required
to take technical and other necessary measures to ensure the security of the personal information they have collected and prevent the
personal information from being divulged, damaged or lost. Any violation of the Cyber Security Law may subject the internet
information services provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, shutdown of
websites or criminal liabilities.
The General Administration of Quality Supervision, Inspection and Quarantine and Standardization Administration issued the
Standard of Information Security Technology — Personal Information Security Specification (2017 edition), which took effect in May
2018, and the Standard of Information Security Technology — Personal Information Security Specification (2020 edition), which took
effect in October 2020. Pursuant to these standards, any entity or person who has the authority or right to determine the purposes for and
methods of using or processing personal information are seen as a personal data controller. Such personal data controller is required to
collect information in accordance with applicable laws, and prior to collecting such data, the information provider’s consent is required.
On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the MPS and
the General Office of the SAMR jointly issued the Notice on the Measures for Determining the Illegal Collection and Use of Personal
Information through Mobile Applications, which aims to provide reference for supervision and administration departments and provide
guidance for mobile applications operators’ self-examination and self-correction and social supervision by netizens, and further
elaborates the forms of behavior constituting illegal collection and use of the personal information through mobile applications including:
(i) failing to publish the rules on the collection and use of personal information; (ii) failing to explicitly explain the purposes, methods
and scope of the collection and use of personal information; (iii) collecting and using personal information without the users’ consent;
(iv) collecting personal information unrelated to the services they provide and beyond the necessary principle; (v) providing personal
information to others without the users’ consent; (vi) failing to provide the function of deleting or correcting the personal information
according to the laws or failing to publish information such as ways of filing complaints and reports.
In addition, on May 28, 2020, the NPC approved the PRC Civil Code, which came into effect on January 1, 2021. Pursuant to
the PRC Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information should follow
the principles of legitimacy, properness and necessity.
On May 12, 2021, the CAC issued the Several Provisions on Automobile Data Security Management (Draft for Comment),
which further elaborates the principles and requirements for the protection of personal information and important data in the automobile
industry scenarios, and defines enterprise or institution engaged in the automobile design, manufacture, and service as an operator. Such
operator is required to process personal information or important data in accordance with applicable laws and regulations during the
process of design, production, sales, operation, maintenance, and management of automobile. On August 16, 2021, the CAC, the NDRC,
the MPS, the MIIT and the Ministry of Transport jointly promulgated the Several Provisions on Automobile Data Security Management
(Trial Implementation), or the Provisions on Automobile Data Security, which took effect from October 1, 2021 and clearly defines the
definition of automobile data, automobile data processing, automobile data processor, personal information, sensitive personal
information and important data, and aims to regulate the collection, analysis, storage, utilization, provision, publication, and cross-border
transmission of personal information and important data generated throughout the lifecycle of automobiles by automobile designers,
producers and service providers. Relevant automobile data processor including automobile manufacturers, compartment and software
providers, dealers, maintenance providers are required to process personal information and important data in accordance with applicable
laws during the automobile design, manufacture, sales, operation, maintenance and management. To process personal information,
automobile data processors shall obtain the consent of the individual or conform to other circumstances stipulated by laws and
regulations. Pursuant to the Provisions on Automobile Data Security, important data shall be stored within the PRC and a cross-border
data security assessment shall be conducted by the national cyberspace administration authority in concert with relevant departments
under the State Council if there is a need to provide such data overseas. The security management for the cross-border transfer of
personal information which is not included in important data shall be governed by the relevant PRC laws and regulations. To process
important data, automobile data processors shall conduct risk assessment in accordance with regulations and submit risk assessment
reports to related departments at provincial levels.
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On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC (the “Data Security Law”), which took effect in
September 2021. The Data Security Law sets forth data security and privacy related compliance obligations on entities and individuals
carrying out data related activities. The Data Security Law also introduces a data classification and layered protection system based on
the importance of data and the degree of impact on national security, public interests or legitimate rights and interests of individuals or
organizations when such data is tampered with, destroyed, leaked or illegally acquired or used. In addition, the Data Security Law
provides a national security review procedure for those data activities that may affect national security, and imposes export restrictions on
certain data and information. According to the PRC National Security Law, the State shall establish institutions and mechanisms for
national security review and regulation, and conduct national security review on certain matters that affect or may affect PRC national
security, such as key technologies and IT products and services. Furthermore, the Data Security Law also provides that any organization
or individual within the territory of the PRC shall not provide any foreign judicial body and law enforcement body with any data without
the approval of the competent PRC governmental authorities. In early July 2021, regulatory authorities in China launched cybersecurity
investigations with regard to several China-based companies that are listed in the United States.
In July 2021, General Office of the Central Committee of the Communist Party of China and the General Office of the State
Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law (the “Opinions”),
which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal
securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as
promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas
listed companies. As of the date of this annual report, we have not received any inquiry, notice, warning, or sanctions from PRC
governmental authorities in connection with the above contents of Opinions.
On December 28, 2021, the CAC, the NDRC, the MIIT, the MPS, the Ministry of National Security, the MOF, the MOFCOM,
the PBOC, the SAMR, the National Radio and Television Administration, the CSRC, the National Administration of State Secrets
Protection and the State Cryptography Administration jointly released the Cybersecurity Review Measures, which took effect on
February 15, 2022. Pursuant to the Cybersecurity Review Measures, network platform operators with information of over one million
users shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate, among others, the risk of
critical information infrastructure, core data, important data, or the risk of a large amount of personal information being influenced,
controlled or maliciously used by foreign governments after going public, and cyber information security risk.
On July 30, 2021, the MIIT issued the Opinion on Strengthening the Access Administration of Intelligent Connected Vehicles
Manufacturing Enterprises and Their Products, or the Access Administration Opinion, which provided responsibilities of intelligent
connected vehicles manufacturing enterprises, and required such enterprises to strengthen the management of vehicle data security, cyber
security, software updates, function safety and intended function safety. Furthermore, the Access Administration Opinion stated that
vehicles manufacturing enterprises shall conduct cybersecurity reviews prior to transmitting data abroad.
On July 30, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information
Infrastructure, or the Regulations, which took effect in September 2021. The Regulations supplement and specify the provisions on the
security of critical information infrastructure as stated in the Cyber Security Law. The Regulations provide, among others, that protection
department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification
of certain critical information infrastructure. According to the Regulations, operators of certain industries or sectors that may endanger
national security, people’s livelihood and public interest in case of damage, function loss or data leakage may be identified as critical
information infrastructure operators by the CAC or the respective industrial regulatory authorities once they meet the identification
standards promulgated by the authorities.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal
Information Protection Law, which took effect in November 2021. As the first systematic and comprehensive law specifically for the
protection of personal information in the PRC, the Personal Information Protection Law provides, among others, that (i) an individual’s
separate consent shall be obtained before operation of such individual’s sensitive personal information, e.g., biometric characteristics and
individual location tracking, (ii) personal information operators operating sensitive personal information shall notify individuals of the
necessity of such operations and the influence on the individuals’ rights, (iii) if personal information operators reject individuals’
requests to exercise their rights, individuals may file a lawsuit with a People’s Court.
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On October 29, 2021, the CAC issued the Measures for the Security Assessment of Data Exit (Draft for Comment), and on July
7, 2022, the CAC finally adopted the Measures for the Security Assessment of Data Exit, which took into effect on September 1, 2022
and stipulates that data processors who provide overseas the personal information and important data collected and generated during
operations within the PRC shall be subject to security assessment by the CAC. Specifically speaking, if the data processor provides data
overseas and meets one of the following circumstances, it shall declare the security assessment: (i) personal information by operators of
critical information infrastructure; (ii) the data contains important data; (iii) personal information processors who have processed
personal information of one million people provide personal information abroad; (iv) accumulatively provided personal information of
more than one hundred thousand people or sensitive personal information of more than ten thousand people abroad since January 1 of the
previous year; and (v) other circumstances as specified by the CAC. The assessment results of the data exit are valid for two years.
In addition, on November 14, 2021, the Administration Regulations on Cyber Data Security (Draft for Comments), or the Draft
Regulations, were proposed by the CAC for public comments until December 13, 2021. The Draft Regulations set out general guidelines,
protection of personal information, security of important data, security management of cross-border data transfer, obligations of internet
platform operators, supervision and management, and legal liabilities. Key requirements include: (i) data processors shall enhance the
security protection of data processing systems, data transmission networks, and data storage environments, among others, under the
graded cybersecurity protection requirements, and any system that processes important data shall in principle meet the security protection
requirements for Level 3 or higher cyberspace and critical information infrastructure, and any system that processes core data shall be
strictly protected in accordance with relevant regulations; (ii) data processors should establish a data security emergency response
mechanism, and promptly start the emergency response mechanism in the event of a data security incident; (iii) the detailed rules for data
processors to apply when providing personal information to third parties, or sharing, trading or entrusting important data to third parties;
(iv) the scenarios of cybersecurity review which shall be subject to Cybersecurity Review Measures; (v) the definitions of important data
and processors’ security protection obligations; (vi) the detailed rules on cross-border data transfer which added missing details to the
Personal Information Protection Law; (vii) data processors processing personal information of more than one million individuals shall
also comply with the regulations for processing of important data; and (viii) data processors dealing with important data or listing
overseas (including Hong Kong) should carry out an annual data security assessment by themselves or by entrusting data security service
agencies, and each year before January 31, data security assessment report for the previous year shall be submitted to the districted city
level cyberspace administration department. In addition, the Draft Regulations reiterate that data processors which process the personal
information of at least one million individuals must apply for a cybersecurity review if they are to be listed abroad, and further require
the data processors that carry out the following activities to apply for cybersecurity review in accordance with the relevant laws and
regulations: (i) the merger, reorganization or division of internet platform operators that have gathered a large number of data resources
related to national security, economic development and public interests affects or may affect national security; (ii) the listing of the data
processor in Hong Kong affects or may affect national security; and (iii) other data processing activities that affect or may affect national
security. Furthermore, in one of the following situations, data processors shall delete or anonymize personal information within 15
business days: (i) the purpose of processing personal information has been achieved or the purpose of processing is no longer needed; (ii)
the storage term agreed with the users or specified in the personal information processing rules has expired; (iii) the service has been
terminated or the account has been canceled by the individual; or (iv) unnecessary personal information or personal information
unavoidably collected due to the use of automatic data collection technology but without the consent of the individual. Any failure to
comply with such requirements may subject us to, among others, suspension of services, fines, revoking relevant business permits or
business licenses and penalties. As of the date of this annual report, there is no definite timetable as to when the Draft Regulations will be
enacted.
On December 8, 2022, the MIIT published the Administration Measures on Data Security in the Field of Industry and
Information Technology (Trial), which came into effect on January 1, 2023. Such measures require the industrial and telecom data
processors to further implement data classification and hierarchical management, take necessary measures to ensure that data remains
effectively protected and being lawfully applied and conduct data security risk monitoring. Such measures also provide the definitions of
“core data” and “important data” in the field of industry and information technology.
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Regulations on E-Commerce
On August 31, 2018, the SCNPC promulgated the E-Commerce Law of the PRC (the “E-Commerce Law”), which became
effective as of January 1, 2019. The E-Commerce Law establishes the regulatory framework for the e-commerce sector in the PRC for
the first time by laying out certain requirements on e-commerce platform operators. According to the E-Commerce Law, the e-commerce
platform operators shall prepare a contingency plan for cybersecurity events and take technological measures and other measures to
prevent online illegal and criminal activities. The E-Commerce Law also expressly requires e-commerce platform operators to take
necessary actions to ensure fair dealing on their platforms to safeguard the legitimate rights and interests of consumers, including to
prepare platform service agreements and transaction information record-keeping and transaction rules, to prominently display such
documents on the platform’s website, and to keep such information for no less than three years following the completion of a transaction.
Where the e-commerce platform operators conduct self-operated business on their platforms, they shall distinguish and mark their self-
operated business from the businesses of the business operators using the platform in a prominent manner, and shall not mislead
consumers. The e-commerce platform operators shall bear civil liability of a commodity seller or service provider for the business
marked as self-operated, pursuant to the law.
Regulations on Insurance Brokerage
According to Insurance Law of the PRC promulgated by the SCNPC on June 30, 1995 and latest amended on April 24, 2015,
which became effective on April 24, 2015, insurance brokers shall meet the conditions prescribed by the insurance regulatory agency of
the State Council and obtain the license for operating insurance brokerage business. On February 1, 2018, China Insurance Regulatory
Commission which has been merged into the CBIRC, promulgated the Regulatory Provisions on Insurance Brokerages, or the Insurance
Brokerages Provisions, which became effective on May 1, 2018. Pursuant to the Insurance Brokerages Provisions, insurance brokers
shall mean institutions which provide intermediary services for execution of insurance contracts between policyholders and insurance
companies based on interests of policyholders and collect commissions, including insurance brokerage companies and their branches.
Any insurance brokerage company operating insurance brokerage businesses in the PRC shall satisfy the stipulated criteria and obtain a
license for operating insurance brokerage businesses. Whoever illegally engages in insurance brokerage business without a license shall
be banned, and its illegal gains shall be confiscated and it shall be fined not less than one time and not more than five times the illegal
gains; if there is no illegal gains or the illegal gains are less than RMB50,000, a fine of not less than RMB50,000 and not more than
RMB300,000 shall be imposed.
According to the Service Guidelines for Approval of the Establishment of Insurance Brokerage Institutions issued by the CBIRC
on September 30, 2021, insurance brokers whose foreign investment ratio is higher than or equal to 25% after penetrating cumulative
calculation are regarded as foreign-invested insurance brokers. Pursuant to the Notice of the CBIRC General Office on Clarifying
Relevant Measures for the Opening-up of the Insurance broker Market issued by the CBIRC on December 3, 2021, overseas insurance
brokerage companies with actual business experience and complying with the relevant provisions of the CBIRC are permitted to invest in
and establish insurance brokerage companies in China to engage in insurance brokerage business. However, in practice, subject to the
qualifications set by the CBIRC for foreign shareholders of the insurance brokerage companies, the CBIRC typically would not approve
the establishment of foreign-invested insurance brokerage companies.
Regulations on Land and the Development of Construction Projects
Regulations on Land Grants
Under the Interim Regulations on Assignment and Transfer of the Rights to the Use of the State-owned Urban Land of the PRC,
promulgated by the State Council on May 19, 1990 and latest amended on November 29, 2020, a system of assignment and transfer of
the right to use state-owned land was adopted. A land user must pay land premiums to the state as consideration for the assignment of the
right to use a land site within a certain term, and the land user who obtained the right to use the land may transfer, lease out, mortgage or
otherwise commercially exploit the land within the term of use. Under the Interim Regulations on Assignment and Transfer of the Rights
to the Use of the State-owned Urban Land of the PRC and the Law of the PRC on Urban Real Estate Administration, the local land
administration authority may enter into an assignment contract with the land user for the assignment of land use rights. The land user is
required to pay the land premium as provided in the assignment contract. After the full payment of the land premium, the land user must
register with the land administration authority and obtain a land use rights certificate which evidences the acquisition of land use rights.
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Regulations on Planning of a Construction Project
Pursuant to the Regulations on Planning Administration regarding Assignment and Transfer of the Rights to Use of the State-
Owned Land in Urban Area promulgated by the Ministry of Construction in December 1992 and amended in January 2011, a
construction land planning permit shall be obtained from the municipal planning authority with respect to the planning and use of land.
According to the Urban and Rural Planning Law of the PRC promulgated by the SCNPC on October 28, 2007 and latest amended on
April 23, 2019, a construction work planning permit must be obtained from the competent urban and rural planning government authority
for the construction of any structure, fixture, road, pipeline or other engineering project within an urban or rural planning area.
After obtaining a construction work planning permit, subject to certain exceptions, a construction enterprise must apply for a
construction work commencement permit from the construction authority under the local people’s government at the county level or
above in accordance with the Administrative Provisions on Construction Permit of Construction Projects promulgated by the Ministry of
Housing and Urban-Rural Development (the “MOHURD”), on June 25, 2014 and implemented on October 25, 2014 and latest amended
on March 30, 2021.
Pursuant to the Administrative Measures for Reporting Details Regarding Acceptance Examination upon Completion of
Buildings and Municipal Infrastructure promulgated by the Ministry of Construction on April 4, 2000 and amended on October 19, 2009
and the Provisions on Acceptance Examination upon Completion of Buildings and Municipal Infrastructure promulgated and
implemented by the MOHURD on December 2, 2013, upon the completion of a construction project, the construction enterprise must
submit an application to the competent department in the people’s government at or above county level where the project is located, for
examination upon completion of building and for filing purpose; and to obtain the filing form for acceptance and examination upon
completion of construction project.
Regulations on Environmental Protection and Work Safety
Regulations on Environmental Protection
Pursuant to the Environmental Protection Law of the PRC promulgated by the SCNPC, on December 26, 1989, latest amended
on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will discharge pollutants during the course of
operations or other activities must implement effective environmental protection safeguards and procedures to control and properly treat
waste gas, waste water, waste residue, dust, malodorous gases, radioactive substances, noise, vibrations, electromagnetic radiation and
other hazards produced during such activities.
Environmental protection authorities impose various administrative penalties on persons or enterprises in violation of the
Environmental Protection Law. Such penalties include warnings, fines, orders to rectify within the prescribed period, orders to cease
construction, orders to restrict or suspend production, orders to make recovery, orders to disclose relevant information or make an
announcement, imposition of administrative action against relevant responsible persons, and orders to shut down enterprises. Any person
or entity that pollutes the environment resulting in damage could also be held liable under the PRC Civil Code. In addition,
environmental organizations may also bring lawsuits against any entity that discharges pollutants detrimental to the public welfare.
Regulations on Work Safety
Under relevant construction safety laws and regulations, including the Work Safety Law of the PRC which was promulgated by
the SCNPC on June 29, 2002, latest amended on June 10, 2021 and became effective on September 1, 2021, production and operating
business entities must establish objectives and measures for work safety and improve the working environment and conditions for
workers in a planned and systematic way. A work safety protection scheme must also be set up to implement the work safety job
responsibility system. In addition, production and operating business entities must arrange work safety training and provide the
employees with protective equipment that meets the national standards or industrial standards. Furthermore, production and operating
business entities shall report their major hazard sources and related safety and emergency measures to the emergency management
department and other relevant departments for the record, and establish a safety risk grading control system and take corresponding
control measures. Automobile and components manufacturers are subject to the above-mentioned environment protection and work
safety requirements.
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Regulations on Fire Control
Pursuant to the Fire Control Law of the PRC promulgated by the SCNPC on April 29, 1998 and latest amended on April 29,
2021, for special construction projects stipulated by the housing and urban-rural development authority of the State Council, the
developer shall submit the fire safety design documents to the housing and urban-rural development authority for examination, while for
construction projects other than those stipulated as special development projects, the developer shall, at the time of applying for the
construction permit or approval for work commencement report, provide the fire safety design drawings and technical materials which
satisfy the construction needs. According to the Interim Regulations on Administration of Examination and Acceptance of Fire Control
Design of Construction Projects promulgated on April 1, 2020 and effective on June 1, 2020, an examination system for fire prevention
design and acceptance only applies to special construction projects, and for other projects, a record-filing and spot check system would
be applied.
Regulations on Intellectual Property Rights
Patent Law
According to the Patent Law of the PRC promulgated by the SCNPC on March 12, 1984 and currently effective from June 1,
2021, the State Intellectual Property Office is responsible for administering patent law in the PRC. The patent administration departments
of provincial, autonomous region or municipal governments are responsible for administering patent law within their respective
jurisdictions. The Chinese patent system adopts a first-to-file principle, which means that when more than one person files different
patent applications for the same invention, only the person who files the application first is entitled to obtain a patent of the invention. To
be patentable, an invention or a utility model must meet three criteria: novelty, inventiveness and practicability. The protection period is
twenty years for an invention patent and ten years for a utility model patent and fifteen years for a design patent, commencing from their
respective application dates.
Regulations on Copyright
The Copyright Law of the PRC (the “Copyright Law”), which took effect on June 1, 1991 and was latest amended in 2020 and
came into effect on June 1, 2021, provides that Chinese citizens, legal persons, or other organizations shall, whether published or not,
own copyright in their copyrightable works, which include, among others, works of literature, art, natural science, social science,
engineering technology and computer software. Copyright owners enjoy certain legal rights, including right of publication, right of
authorship and right of reproduction. The Copyright Law extends copyright protection to Internet activities, products disseminated over
the Internet and software products. In addition, the Copyright Law provides for a voluntary registration system administered by the China
Copyright Protection Center. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities,
which include ceasing infringement activities, apologizing to the copyright owners and compensating the loss of the copyright owner.
Infringers of a copyright may also be subject to fines and/or administrative or criminal liabilities in severe situations.
Pursuant to the Computer Software Copyright Protection Regulations promulgated by the State Council on December 20, 2001,
latest amended on January 30, 2013 and currently effective from March 1, 2013, the software copyright owner may go through the
registration formalities with a software registration authority recognized by the State Council’s copyright administrative department. The
software copyright owner may authorize others to exercise that copyright, and is entitled to receive remuneration.
Trademark Law
Trademarks are protected by the Trademark Law of the PRC which was adopted on August 23, 1982 and latest amended in
2019, as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and latest amended
on April 29, 2014. The Trademark Office under the SAMR, handles trademark registrations. The Trademark Office grants a ten-year
term to registered trademarks and the term may be renewed for another ten-year period upon request by the trademark owner. A
trademark registrant may license its registered trademarks to another party by entering into trademark license agreements, which must be
filed with the Trademark Office for its record. As with patents, the Trademark Law of the PRC has adopted a first-to-file principle with
respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered
or subject to a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark
application may be rejected. Any person applying for the registration of a trademark may not injure existing trademark rights first
obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already
gained a “sufficient degree of reputation” through such party’s use.
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Regulations on Domain Names
The MIIT promulgated the Measures on Administration of Internet Domain Names (the “Domain Name Measures”), on
August 24, 2017, which took effect on November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name
promulgated by the MIIT on November 5, 2004. According to the Domain Name Measures, the MIIT is in charge of the administration
of PRC internet domain names. The domain name registration follows a first-to-file principle. Applicants for registration of domain
names must provide the true, accurate and complete information of their identities to domain name registration service institutions. The
applicants will become the holder of such domain names upon the completion of the registration procedure.
Regulations on Foreign Investment in China
Catalogue for the Guidance of Foreign Investment Industries
Investments in the PRC by foreign investors and foreign-invested enterprises were regulated by the Catalogue for the Guidance
of Foreign Investment Industries (the “Foreign Investment Catalogue”), jointly promulgated by the MOFCOM and NDRC on June 28,
1995 and amended from time to time. The Foreign Investment Catalogue was last repealed by the Special Administrative Measures
(Negative List) for Foreign Investment Access (2021 Version) (the “2021 Negative List”), which was jointly promulgated by the
MOFCOM and the NDRC on December 27, 2021 and came into effect on January 1, 2022, and the Catalogue of Industries for
Encouraging Foreign Investment (2022 Version) (the “2022 Encouraging Catalogue”), which was jointly promulgated by the
MOFCOM and the NDRC on October 26, 2022 and became effective on January 1, 2023. The 2022 Encouraging Catalogue and the 2021
Negative List set out the industries and economic activities in which foreign investment in the PRC is encouraged, restricted or
prohibited. Pursuant to the 2022 Encouraging Catalogue, the research and development and manufacture of key parts and components of
NEVs fall within the encouraged catalogue, and the 2021 Negative List lifts the limit on foreign ownership of automakers for ICE
passenger vehicles. However, the 2021 Negative List provides that foreign investors shall hold no more than 50% of the equity interest in
a service provider operating certain value-added telecommunications services (other than for e-commerce, domestic multi-parties
communications, storage and forwarding categories, call centers), and foreign investors are prohibited to invest in certain services related
to autonomous driving.
The establishment, operation and management of corporate entities in the PRC is governed by the PRC Company Law, which
was latest amended on October 26, 2018. The PRC Company Law generally governs two types of companies — limited liability
companies and joint stock limited companies. The PRC Company Law shall also apply to foreign-invested companies. Where laws on
foreign investment have other stipulations, such stipulations shall prevail. The establishment procedures, approval or record-filing
procedures, registered capital requirements, foreign exchange matters, accounting practices, taxation and labor matters of a wholly
foreign-owned enterprise are regulated by the Foreign Investment Law of the PRC, or the Foreign Investment Law, which became
effective on January 1, 2020 and replaced three laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the
PRC Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise Law, together with their implementation rules and
ancillary regulations.
Foreign Investment Law
On March 15, 2019, the NPC promulgated the Foreign Investment Law, which became effective on January 1, 2020 and
replaced three laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law
and the PRC Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign
Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with
prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic
invested enterprises in China. The Foreign Investment Law establishes the basic framework for the access to, and the promotion,
protection and administration of foreign investments in view of investment protection and fair competition.
According to the Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted
by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign
investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively
with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares,
shares in assets, or other similar rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively
with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative
regulations or the State Council.
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According to the Foreign Investment Law, the State Council will publish or approve to publish a catalogue for special
administrative measures, or the “negative list.” The Foreign Investment Law grants national treatment to foreign invested entities, except
for those foreign invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.”
Because the “negative list” has yet been published, it is unclear whether it will differ from the current 2021 Negative List. The Foreign
Investment Law provides that foreign invested entities operating in foreign restricted or prohibited industries will require market entry
clearance and other approvals from relevant PRC governmental authorities.
Furthermore, the Foreign Investment Law provides that foreign invested enterprises established before the implementation of
the Foreign Investment Law may maintain their structure and corporate governance within five years after the implementation of the
Foreign Investment Law.
In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their
investments in the PRC, including, among others, that local governments shall abide by their commitments to the foreign investors;
foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory
procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the
investment of foreign investors is prohibited; mandatory technology transfer is prohibited; and the capital contributions, profits, capital
gains, proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or
proceeds received upon settlement by foreign investors within China, may be freely remitted inward and outward in RMB or a foreign
currency. Also, foreign investors or the foreign investment enterprise should be imposed legal liabilities for failing to report investment
information in accordance with the requirements.
On December 26, 2019, the State Council promulgated the Implementation Regulations on the Foreign Investment Law of the
PRC, effective on January 1, 2020, which further requires that foreign-invested enterprises and domestic enterprises shall be treated
equally with respect to policy making and implementation. Pursuant to the Implementation Regulations on the Foreign Investment Law,
if the existing foreign-invested enterprises fail to change their original forms as of January 1, 2025, the relevant market regulation
departments will not process other registration matters for the enterprises, and may disclose their relevant information to the public.
On December 30, 2019, the MOFCOM and the SAMR jointly issued the Measures for Reporting of Foreign Investment
Information (the “Foreign Investment Information Measures”), which became effective on January 1, 2020 and replaced the Interim
Administrative Measures for the Record-filing of the Establishment and Modification of Foreign-invested Enterprises. Since January 1,
2020, for foreign investors carrying out investment activities directly or indirectly in the PRC, foreign investors or foreign-invested
enterprises shall submit investment information through the Enterprise Registration System and the National Enterprise Credit
Information Publicity System operated by the SAMR. Foreign investors or foreign-invested enterprises shall disclose their investment
information by submitting reports for their establishments, modifications and cancellations and their annual reports in accordance with
the Foreign Investment Information Measures. If a foreign-invested enterprise investing in the PRC has finished submitting its reports for
its establishment, modifications and cancellation and its annual reports, the relevant information will be shared by the competent market
regulation department to the competent commercial department, and such foreign-invested enterprise is not required to submit the reports
to the two departments separately.
Regulations on Foreign Exchange
General Principles of Foreign Exchange
Under the Regulations on the Foreign Exchange System of the PRC promulgated on January 29, 1996 and most recently
amended on August 5, 2008 and various regulations issued by the State Administration of Foreign Exchange of the PRC (the “SAFE”),
and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-
related receipts and payments and payment of interest and dividends. The conversion of Renminbi into other currencies and remittance of
the converted foreign currency outside the PRC of capital account items, such as direct equity investments, loans and repatriation of
investment, requires the prior approval from the SAFE or its local office.
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Payments for transactions that take place within the PRC must be made in Renminbi. Unless otherwise approved, PRC
companies may not repatriate foreign currency payments received from abroad or retain the same abroad. Foreign-invested enterprises
may retain foreign exchange in accounts with designated foreign exchange banks under the current account items subject to a cap set by
the SAFE or its local branch. Foreign exchange proceeds under the current accounts may be either retained or sold to a financial
institution engaged in settlement and sale of foreign exchange pursuant to relevant SAFE rules and regulations. For foreign exchange
proceeds under the capital accounts, approval from the SAFE is generally required for the retention or sale of such proceeds to a financial
institution engaged in settlement and sale of foreign exchange.
Pursuant to the Circular of the SAFE on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct
Investment (the “SAFE Circular No. 59”), promulgated by SAFE on November 19, 2012, which became effective on December 17,
2012 and latest amended on December 30, 2019, approval of SAFE is not required for opening a foreign exchange account and
depositing foreign exchange into the accounts relating to the direct investments. The SAFE Circular No. 59 also simplified foreign
exchange-related registration required for the foreign investors to acquire the equity interests of Chinese companies and further improve
the administration on foreign exchange settlement for foreign-invested enterprises.
The Circular on Further Simplifying and Improving the Foreign Currency Management Policy on Direct Investment (the
“SAFE Circular No. 13”), effective from June 1, 2015 and latest amended on December 30, 2019, cancels the administrative approvals
of foreign exchange registration of direct domestic investment and direct overseas investment and simplifies the procedure of foreign
exchange-related registration. Pursuant to SAFE Circular No. 13, the investors shall register with banks for direct domestic investment
and direct overseas investment.
The Circular on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested
Enterprise (the “SAFE Circular No. 19”), which was promulgated by the SAFE on March 30, 2015 and latest amended on March 23,
2023, provides that a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign
exchange capital in its capital account for which the relevant foreign exchange administration has confirmed monetary capital
contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account).
Pursuant to SAFE Circular No. 19, for the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange
capital on a discretionary basis; a foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the
scope of business; where an ordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign
exchanges settled, the foreign-invested enterprise must first go through domestic re-investment registration and open a corresponding
account for foreign exchange settlement pending payment with the foreign exchange administration or the bank at the place where it is
registered.
The Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (the
“SAFE Circular No. 16”), which was promulgated by the SAFE and became effective on June 9, 2016, provides that enterprises
registered in the PRC may also convert their foreign debts from foreign currency into Renminbi on a self-discretionary basis. SAFE
Circular No. 16 also provides an integrated standard for conversion of foreign exchange under capital account items (including, but not
limited to, foreign currency capital and foreign debts) on a self-discretionary basis, which applies to all enterprises registered in the PRC.
According to the PRC Market Entities Registration Administrative Regulations promulgated by the State Council on July 27,
2021 and effective on March 1, 2022, and other laws and regulations governing the foreign-invested enterprises and company
registrations, the establishment of a foreign-invested enterprise and any capital increase and other major changes in a foreign-invested
enterprise shall be registered with the SAMR or its local counterparts, and shall be filed via the foreign investment comprehensive
administrative system (the “FICMIS”), if such foreign-invested enterprise does not involve special access administrative measures
prescribed by the PRC government.
On October 23, 2019, SAFE issued the Circular on Further Promoting Cross-border Trade and Investment Facilitation. This
circular allows the foreign-invested enterprises without equity investment as in their approved business scope to use their capital
obtained from foreign exchange settlement to make domestic equity investment as long as the investments are real and in compliance
with the foreign investment-related laws and regulations. In addition, this circular stipulates that qualified enterprises in certain pilot
areas may use their capital income from registered capital, foreign debt and overseas listing, for the purpose of domestic payments
without providing authenticity certifications to the relevant banks in advance for those domestic payments. Payments for transactions that
take place within the PRC must be made in RMB. Foreign currency revenues received by PRC companies may be repatriated into the
PRC or retained outside of the PRC in accordance with requirements and terms specified by SAFE.
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Pursuant to SAFE Circular No. 13 and other laws and regulations relating to foreign exchange, when setting up a new foreign-
invested enterprise, the foreign-invested enterprise shall register with the bank located at its registered place after obtaining the business
license, and if there is any change in capital or other changes relating to the basic information of the foreign-invested enterprise,
including, without limitation, any increase in its registered capital or total investment, the foreign-invested enterprise must register such
changes with the bank located at its registered place after obtaining approval from or completing the filing with competent authorities.
Pursuant to the relevant foreign exchange laws and regulations, the above-mentioned foreign exchange registration with the banks will
typically take less than four weeks upon the acceptance of the registration application.
Based on the foregoing, if we intend to provide funding to our wholly foreign-owned subsidiaries through capital injection at or
after their establishment, we must register the establishment of and any follow-on capital increase in our wholly foreign-owned
subsidiaries with the SAMR or its local counterparts, file such via the FICMIS and register such with the local banks for the foreign
exchange related matters.
Loans by the Foreign Companies to their PRC Subsidiaries
A loan made by foreign investors as shareholders in a foreign-invested enterprise is considered to be foreign debt in China and
is regulated by various laws and regulations, including the Regulation of the PRC on Foreign Exchange Administration, the Interim
Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions (Revised in 2020), the
Detailed Rules for the Implementation of Provisional Regulations on Statistics and Supervision of External Debt, and the Administrative
Measures for Registration of Foreign Debts. Under these rules and regulations, a shareholder loan in the form of foreign debt made to a
PRC entity does not require the prior approval of the SAFE. However, such foreign debt must be registered with and recorded by the
SAFE or its local branches within fifteen (15) business days after entering into the foreign debt contract. Pursuant to these rules and
regulations, the balance of the foreign debts of a foreign-invested enterprise shall not exceed the difference between the total investment
and the registered capital of the foreign-invested enterprise (the “Total Investment and Registered Capital Balance”).
On January 12, 2017, the PBOC promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-
Prudential Management of Full-Covered Cross-Border Financing (the “PBOC Notice No. 9”). Pursuant to PBOC Notice No. 9, within a
transition period of one year from January 12, 2017, the foreign-invested enterprises may adopt the currently valid foreign debt
management mechanism (the “Current Foreign Debt Mechanism”), or the mechanism as provided in PBOC Notice No. 9 (the “Notice
No. 9 Foreign Debt Mechanism”), at their own discretions. PBOC Notice No. 9 provides that enterprises may conduct independent
cross-border financing in RMB or foreign currencies as required. Pursuant to PBOC Notice No. 9, the outstanding cross-border financing
of an enterprise (the outstanding balance drawn, here and below) shall be calculated using a risk-weighted approach (the “Risk-
Weighted Approach”), and shall not exceed certain specified upper limits. PBOC Notice No. 9 further provides that the upper limit of
risk-weighted outstanding cross-border financing for enterprises shall be equal to 200% of its net assets multiplied by macro-prudential
regulation parameter (the “Net Asset Limits”). The macro-prudential regulation parameter shall be 1. Enterprises shall file with the
SAFE in its capital item information system after entering into the relevant cross-border financing contracts and prior to three business
days before drawing any money from the foreign debts. On October 25, 2022, the PBOC and the SAFE raised the macro-prudential
regulation parameter for cross-border financing of enterprises and financial institutions from 1 to 1.25.
Based on the foregoing, if we provide funding to our wholly foreign-owned subsidiaries through shareholder loans, the balance
of such loans shall not exceed the Total Investment and Registered Capital Balance and we will need to register such loans with the
SAFE or its local branches in the event that the Current Foreign Debt Mechanism applies, or the balance of such loans shall be subject to
the Risk-Weighted Approach and the Net Asset Limits and we will need to file the loans with the SAFE in its information system in the
event that the Notice No. 9 Foreign Debt Mechanism applies. According to PBOC Notice No. 9, after a transition period of one year
from January 12, 2017, the PBOC and the SAFE will determine the cross-border financing administration mechanism for the foreign-
invested enterprises after evaluating the overall implementation of PBOC Notice No. 9. As of the date of this annual report, neither the
PBOC nor the SAFE has promulgated and made public any further rules, regulations, notices or circulars in this regard. It is uncertain
which mechanism will be adopted by the PBOC and the SAFE in the future and what statutory limits will be imposed on us when
providing loans to our PRC subsidiaries.
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Offshore Investment
Under the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange
Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose
Vehicles (the “SAFE Circular 37”), issued by the SAFE and effective on July 4, 2014, PRC residents are required to register with the
local SAFE branch prior to the establishment or control of an offshore special purpose vehicle (the “SPV”), which is defined as an
offshore enterprise directly established or indirectly controlled by PRC residents for investment and financing purposes, with the
enterprise assets or interests PRC residents hold in China or overseas. The term “control” means to obtain the operation rights, right to
proceeds or decision-making power of an SPV through acquisition, trust, holding shares on behalf of others, voting rights, repurchase,
convertible bonds or other means. An amendment to registration or subsequent filing with the local SAFE branch by such PRC resident
is also required if there is any change in basic information of the offshore company or any material change with respect to the capital of
the offshore company. At the same time, the SAFE has issued the Operation Guidance for the Issues Concerning Foreign Exchange
Administration over Round-trip Investment regarding the procedures for SAFE registration under SAFE Circular 37, which became
effective on July 4, 2014 as an attachment of SAFE Circular 37.
Under the relevant rules, failure to comply with the registration procedures set forth in the SAFE Circular 37 may result in bans
on the foreign exchange activities of the relevant onshore company, including the payment of dividends and other distributions to its
offshore parent or affiliates, and may also subject relevant PRC residents to penalties under PRC foreign exchange administration
regulations.
Regulations on Dividend Distribution
Wholly foreign-owned enterprises and Sino-foreign equity joint ventures in the PRC may pay dividends only out of their
accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, these foreign-
invested enterprises may not pay dividends unless they set aside at least 10% of their respective accumulated profits after tax each year, if
any, to fund certain reserve funds, until such time as the accumulative amount of such fund reaches 50% of the enterprise’s registered
capital. In addition, these companies also may allocate a portion of their after-tax profits based on PRC accounting standards to employee
welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends.
Regulations governing abovementioned dividend distribution arrangements have been replaced by the Foreign Investment Law
and its implantation rules, which do not provide specific dividend distribution rules for foreign invested enterprises. The Foreign
Investment Law and its implementation rules also provide that after the conversion from a wholly foreign-owned enterprise or sino-
foreign equity joint venture to a foreign invested enterprise under the Foreign Investment Law, distribution method of gains agreed in the
joint venture agreements may continue to apply.
Regulations on Taxation
Enterprise Income Tax
On March 16, 2007, the SCNPC promulgated the PRC Enterprise Income Tax Law which was amended on February 24, 2017
and December 29, 2018 and on December 6, 2007, the State Council enacted the Regulations for the Implementation of the Enterprise
Income Tax Law which came into effect on January 1, 2008 and was amended on April 23, 2019 (collectively, the “EIT Law”). Under
the EIT Law, both resident enterprises and non-resident enterprises are subject to tax in the PRC. Resident enterprises are defined as
enterprises that are established in China in accordance with PRC laws, or that are established in accordance with the laws of foreign
countries but are actually or in effect controlled from within the PRC. Non-resident enterprises are defined as enterprises that are
organized under the laws of foreign countries and whose actual management is conducted outside the PRC, but have established
institutions or premises in the PRC, or have no such established institutions or premises but have income generated from inside the PRC.
Under the EIT Law and relevant implementing regulations, a uniform corporate income tax rate of 25% is applied. However, if non-
resident enterprises have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment
or premises in the PRC but there is no actual relationship between the relevant income derived in the PRC and the established institutions
or premises set up by them, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.
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In addition, an enterprise certified as a high and new technology enterprise enjoys a reduced enterprise income tax rate of 15%.
According to the Administrative Measures for the Certification of High-Tech Enterprises amended in January 2016, the provincial
counterparts of the MOST, the MOF and the STA jointly determine whether an enterprise is a High-Tech Enterprise considering the
ownership of core technology, whether the main technologies underlying the key products or services fall within the officially supported
high-tech fields, the proportion of research and development personnel of the total staff, the proportion of research and development
expenditure of total revenue, the proportion of high-tech products or services of total revenue, and other factors prescribed.
Value-added Tax
The Provisional Regulations of the PRC on Value-added Tax were promulgated by the State Council on December 13, 1993,
came into effect on January 1, 1994 and were subsequently amended from time to time; and the Detailed Rules for the Implementation of
the Provisional Regulations of the PRC on Value-added Tax (Revised in 2011) were promulgated by the MOF on December 25, 1993 and
subsequently amended on December 15, 2008 and October 28, 2011 (collectively, the “VAT Law”). On November 19, 2017, the State
Council promulgated the Decisions on Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the Provisional
Regulations of the PRC on Value-added Tax (the “Order 691”). On March 20, 2019, the MOF, the STA and the General Administration
of Customs jointly issued the Announcement on Relevant Policies on Deepen the Reform of Value-added Tax (the “Announcement 39”).
According to the VAT Law and the Order 691, all enterprises and individuals engaged in the sale of goods, the provision of processing,
repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of the
PRC are the taxpayers of value-added tax (the “VAT”). According to the Announcement 39, the VAT tax rates generally applicable are
simplified as 13%, 9%, 6% and 0%, which became effective on April 1, 2019, and the VAT tax rate applicable to the small-scale
taxpayers is 3%.
Dividend Withholding Tax
The EIT Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared
to non-PRC resident investors that do not have an establishment or place of business in the PRC, or that have such establishment or place
of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends
are derived from sources within the PRC.
Pursuant to the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital (the “Double Taxation
Avoidance Arrangement”), and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax
authority to have satisfied the relevant conditions and requirements under such Double Taxation Avoidance Arrangement and other
applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise
may be reduced to 5%. However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax
Treaties (the “STA Circular 81”), issued on February 20, 2009 by the STA, if the relevant PRC tax authorities determine, in their
discretions, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven,
such PRC tax authorities may adjust the preferential tax treatment. According to the Circular on Several Questions regarding the
“Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the STA and took effect on April 1, 2018, when
determining the applicant’s status as the “beneficial owner” regarding tax treatments in connection with dividends, interests or royalties
in the tax treaties, several factors, including, without limitation, whether the applicant is obligated to pay more than 50% of his or her
income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual
business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant any tax exemption on
relevant incomes or levy tax at an extremely low rate, will be taken into account, and such factors will be analyzed according to the
actual circumstances of the specific cases. This circular further provides that an applicant who intends to prove his or her status as the
“beneficial owner” shall submit the relevant documents to the relevant tax bureau according to the Announcement on Issuing the
Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Agreements.
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Tax on Indirect Transfer
On February 3, 2015, the STA issued the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-
PRC Resident Enterprises (the “Circular 7”), which was latest amended on December 29, 2017. Pursuant to Circular 7, an “indirect
transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises, may be recharacterized and
treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was
established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may
be subject to PRC enterprise income tax. When determining whether there is a “reasonable commercial purpose” of the transaction
arrangement, features to be taken into consideration include, inter alia, whether the main value of the equity interest of the relevant
offshore enterprise derives directly or indirectly from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly
consists of direct or indirect investment in China or if its income is mainly derived from China; and whether the offshore enterprise and
its subsidiaries directly or indirectly holding PRC taxable assets have a real commercial nature which is evidenced by their actual
function and risk exposure. According to Circular 7, where the payer fails to withhold any or sufficient tax, the transferor shall declare
and pay such tax to the tax authority by itself within the statutory time limit. Circular 7 does not apply to transactions of sale of shares by
investors through a public stock exchange where such shares were acquired on a public stock exchange. On October 17, 2017, the STA
issued the Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise Income Tax (the “Circular 37”), which was
amended by the Announcement of the State Taxation Administration on Revising Certain Taxation Normative Documents issued on June
15, 2018 by the STA. The Circular 37 further elaborates the relevant implemental rules regarding the calculation, reporting and payment
obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remain uncertainties as to the interpretation and
application of Circular 7. Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions or sale of our
shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved.
Regulations on Employment and Social Welfare
Labor Contract Law
The Labor Contract Law of the PRC (the “Labor Contract Law”), which was promulgated on June 29, 2007 and amended on
December 28, 2012, is primarily aimed at regulating rights and obligations of employer and employee relationships, including the
establishment, performance and termination of labor contracts. Pursuant to the Labor Contract Law, labor contracts shall be concluded in
writing if labor relationships are to be or have been established between employers and employees. Employers are prohibited from
forcing employees to work above certain time limits and employers shall pay employees for overtime work in accordance with national
regulations. In addition, employee wages shall be no lower than local standards on minimum wages and must be paid to employees in a
timely manner.
Interim Provisions on Labor Dispatch
Pursuant to the Interim Provisions on Labor Dispatch promulgated by the Ministry of Human Resources and Social Security on
January 24, 2014, which became effective on March 1, 2014, dispatched workers are entitled to equal pay with full-time employees for
equal work. Employers are allowed to use dispatched workers for temporary, auxiliary or substitutive positions, and the number of
dispatched workers may not exceed 10% of the total number of employees. Pursuant to the Labor Contract Law, if the employer violates
the relevant labor dispatch regulations, the labor administrative department shall order it to make corrections within a prescribed time
limit; if it fails to make corrections within the time limit, a fine of more than RMB5,000 but less than RMB10,000 per person will be
imposed on the employer.
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Social Insurance and Housing Fund
As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and amended in 2010, the
Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the
Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the
Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the
Unemployment Insurance Measures promulgated on January 22, 1999 and the Social Insurance Law of the PRC implemented on July 1,
2011 and amended on December 29, 2018, employers are required to provide their employees in the PRC with welfare benefits covering
pension insurance, unemployment insurance, maternity insurance, work-related injury insurance and medical insurance. These payments
are made to local administrative authorities. Any employer that fails to make social insurance contributions may be order to rectify the
non-compliance and pay the required contributions within a prescribed time limit and be subject to a late fee. If the employer still fails to
rectify the failure to make the relevant contributions within the prescribed time, it may be subject to a fine ranging from one to three
times the amount overdue.
In accordance with the Regulations on the Administration of Housing Funds which was promulgated by the State Council in
1999 and latest amended in March 2019, employers must register at the designated administrative centers and open bank accounts for
depositing employees’ housing funds. Employer and employee are also required to pay and deposit housing funds, with an amount no
less than 5% of the monthly average salary of the employee in the preceding year in full and on time. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—Increases in labor costs and enforcement of stricter labor laws and regulations
in the PRC may adversely affect our business and our profitability.”
Employee Stock Incentive Plan
Pursuant to the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock
Incentive Plan of Overseas Listed Company, which was issued by the SAFE on February 15, 2012, employees, directors, supervisors,
and other senior management who participate in any stock incentive plan of a publicly-listed overseas company and who are PRC
citizens or non-PRC citizens residing in China for a continuous period of no less than one year, subject to a few exceptions, are required
to register with the SAFE through a qualified domestic agent, which may be a PRC subsidiary of such overseas listed company, and
complete certain other procedures.
In addition, the STA has issued certain circulars concerning employee stock options and restricted shares. Under these circulars,
employees working in the PRC who exercise stock options or are granted restricted shares will be subject to PRC individual income tax.
The PRC subsidiaries of an overseas listed company are required to file documents related to employee stock options and restricted
shares with relevant tax authorities and to withhold individual income taxes of employees who exercise their stock options or purchase
restricted shares. If the employees fail to pay or the PRC subsidiaries fail to withhold income tax in accordance with relevant laws and
regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC governmental authorities.
M&A Rules and Overseas Listing
On August 8, 2006, six PRC governmental and regulatory agencies, including the MOFCOM and the CSRC, promulgated the
Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), governing the mergers and
acquisitions of domestic enterprises by foreign investors that became effective on September 8, 2006 and was revised on June 22, 2009.
The M&A Rules, among other things, require that if an overseas company established or controlled by PRC companies or individuals
(the “PRC Citizens”), intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC Citizens,
such acquisition must be submitted to the MOFCOM for approval. The M&A Rules also require that an offshore special vehicle, or a
special purpose vehicle formed for overseas listing purposes and controlled directly or indirectly by the PRC companies or individuals,
shall obtain the approval of the CSRC prior to overseas listing and trading of such special purpose vehicle’s securities on an overseas
stock exchange.
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On February 17, 2023, the CSRC released the Overseas Listing Filing Rules, which took effect on March 31, 2023. According
to the Overseas Listing Filing Rules, the issuer or a major domestic operating company designated by the issuer, as the case may be, shall
file with the CSRC, among others, (i) with respect to its follow-on offering in the same foreign market within three business days after
completion of the follow-on offering, and (ii) with respect to its follow-on offering and listing in other foreign markets within three
business days, after its initial filing of the listing application to the regulator in the place of such intended listing. Non-compliance with
the Overseas Listing Filing Rules or an overseas listing completed in breach of the Overseas Listing Filing Rules may result in a warning
on the relevant domestic companies and a fine of RMB1 million to RMB10 million on them. Furthermore, the supervisors directly
responsible and other directly responsible persons of the domestic enterprises may be warned, and fined between RMB500,000 to
RMB5,000,000. The controlling shareholders or actual controllers of the domestic company organize or instigate the relevant illegal acts,
or conceals relevant matters resulting in the illegal acts, may be fined between RMB 1 million to RMB10 million.
On February 17, 2023, the CSRC issued the Notice on Administrative Arrangements for the Filing of Domestic Enterprise’s
Overseas Offering and Listing, which stipulates the domestic enterprises have completed overseas listings are not required to file with
CSRC in accordance with the Overseas Listing Filing Rules immediately, but shall carry out filing procedures as required if they conduct
refinancing or fall within other circumstances that require filing with the CSRC.
On February 24, 2023, the CSRC and several other administrations jointly released the Provisions on Strengthening
Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (the “Archives
Rules”), which became effective on March 31, 2023. The Archives Rules apply to both overseas direct offerings and overseas indirect
offerings. The Archives Rules provides that, among other things, (i) in relation to the overseas listing activities of domestic enterprises,
the domestic enterprises are required to strictly comply with the relevant requirements on confidentiality and archives management,
establish a sound confidentiality and archives system, and take necessary measures to implement their confidentiality and archives
management responsibilities; (ii) during the course of an overseas offering and listing, if a domestic enterprise needs to publicly disclose
or provide to securities companies, accounting firms or other securities service providers and overseas regulators, any materials that
contain relevant state secrets or that have a sensitive impact (i.e., be detrimental to national security or the public interest if divulged), the
domestic enterprise should complete the relevant approval/filing and other regulatory procedures; and (iii) working papers produced in
the PRC by securities companies and securities service institutions, which provide domestic enterprises with securities services during
their overseas issuance and listing, should be stored in the PRC, and the transmission of all such working papers to recipients outside of
the PRC is required to be approved by competent authorities of the PRC.
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C.
Organizational Structure
The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIEs, as of the date of this
annual report:
Contractual Agreements with the VIEs and Their Shareholders
On April 2018, we, through one of our PRC subsidiaries, entered into a series of contractual arrangements with Beijing NIO and
its shareholders, which was then replaced by a new set of contractual arrangements we entered into with the same parties in April 2021.
Further, on November 30, 2022 and December 12, 2022, we, through our respective PRC subsidiaries, entered into a series of contractual
agreements with each of Anhui NIO AT and Anhui NIO DT, respectively, and their respective shareholders.
The following is a summary of the contractual agreements by and among Shanghai NIO, Beijing NIO and the shareholders of
Beijing NIO. The terms of the contractual agreements with the same title between (i) Anhui NIO AD, Anhui NIO AT and the
shareholders of Anhui NIO AT, and (ii) NIO China, Anhui NIO DT and the shareholders of Anhui NIO DT are substantially the same as
those described below, except for, among others, the amount of the loans to the shareholders of each VIE and the amount of service fees
to be paid. We believe that the shareholders of all the VIEs will not receive any personal benefits from these agreements except as
shareholders of our company.
Exclusive Business Cooperation Agreements between Shanghai NIO and Beijing NIO
Under the exclusive business cooperation agreements dated April 19, 2018 and April 12, 2021, respectively, between Shanghai
NIO and Beijing NIO (the “Exclusive Business Cooperation Agreements”), pursuant to which, in exchange for a monthly service fee,
Beijing NIO agreed to engage the Shanghai NIO as its exclusive provider of technical support, consultation and other services.
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Under the Exclusive Business Cooperation Agreements, the service fee shall consist of 100% of the total consolidated profit of
Beijing NIO, after the deduction of any accumulated deficit of Beijing NIO in respect of the preceding financial year(s), operating costs,
expenses, taxes and other statutory contributions. Notwithstanding the foregoing, Shanghai NIO may adjust the scope and amount of
services fees according to mainland China tax law and tax practices, and Beijing NIO will accept such adjustments. Shanghai NIO shall
calculate the service fee on a monthly basis and issue a corresponding invoice to Beijing NIO. Notwithstanding the payment
arrangements in the Exclusive Business Cooperation Agreements, Shanghai NIO may adjust the payment time and payment method, and
Beijing NIO will accept any such adjustment.
In addition, absent the prior written consent of Shanghai NIO, during the term of the Exclusive Business Cooperation
Agreements, with respect to the services subject to the Exclusive Business Cooperation Agreements and other matters, Beijing NIO shall
not directly or indirectly accept the same or any similar services provided by any third party and shall not establish cooperation
relationships similar to that formed by the Exclusive Business Cooperation Agreements with any third party. Shanghai NIO may appoint
other parties, who may enter into certain agreements with Beijing NIO, to provide Beijing NIO with the services under the Exclusive
Business Cooperation Agreements.
The Exclusive Business Cooperation Agreements also provide that Shanghai NIO has the exclusive proprietary rights to and
interests in any and all intellectual property rights developed or created by Beijing NIO during the performance of the Exclusive
Business Cooperation Agreements.
The Exclusive Business Cooperation Agreements shall remain effective unless terminated (a) in accordance with the provisions
of the Exclusive Business Cooperation Agreements; (b) in writing by the Shanghai NIO; or (c) renewal of the expired business period of
either Shanghai NIO or Beijing NIO is denied by relevant government authorities, at which time the Exclusive Business Cooperation
Agreements will terminate upon termination of that business period.
Exclusive Option Agreements between Shanghai NIO, Registered Shareholders and Beijing NIO
Under the exclusive option agreements (the “Exclusive Option Agreements”) dated April 19, 2018 and April 12, 2021, among
Shanghai NIO, Beijing NIO and its shareholders, namely Mr. Bin Li and Mr. Lihong Qin (the “Registered Shareholders”), respectively,
Shanghai NIO has the rights to require the Registered Shareholders to transfer any or all their equity interests in Beijing NIO to Shanghai
NIO and/or a third party designated by it, in whole or in part at any time and from time to time, for considerations equivalent to the
respectively outstanding loans owed to the Registered Shareholders (or part of the loan amounts in proportion to the equity interests
being transferred) or, if applicable, for a nominal price, unless the relevant government authorities or the mainland China laws request
that another amount be used as the purchase price, in which case the purchase price shall be the lowest amount under such request.
Beijing NIO and the Registered Shareholders, and Registered Shareholders, separately, have made a series covenants and
undertakings to ensure that Shanghai NIO retains control over all material respects of the operation and governance of Beijing NIO.
The Registered Shareholders have also undertaken that, subject to the relevant laws and regulations, they will return to Shanghai
NIO any consideration they receive in the event that Shanghai NIO exercise the options under the Exclusive Option Agreements to
acquire the equity interests in Beijing NIO.
The Exclusive Option Agreements shall remain effective unless terminated in the event that the entire equity interests held by
the Registered Shareholders in Beijing NIO have been transferred to Shanghai NIO or its appointee(s).
Equity Pledge Agreements between Shanghai NIO, Registered Shareholders and Beijing NIO
Under the equity pledge agreements dated April 19, 2018 and April 12, 2021, respectively, entered into between Shanghai NIO,
the Registered Shareholders and Beijing NIO (the “Equity Pledge Agreements”), the Registered Shareholders agreed to pledge all their
respective equity interests in Beijing NIO that they own, including any interest or dividend paid for the shares, to Shanghai NIO as a
security interest to guarantee the performance of contractual obligations and the payment of outstanding debts.
The pledge in respect of Beijing NIO takes effect upon the completion of registration with the relevant administration for
industry and commerce and shall remain valid until after all the contractual obligations of the Registered Shareholders and Beijing NIO
under the relevant contractual arrangements have been fully performed and all the outstanding debts of the Registered Shareholders and
Beijing NIO under the relevant contractual arrangements have been fully paid.
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Upon the occurrence and during the continuance of an event of default (as defined in the Equity Pledge Agreements), Shanghai
NIO shall have the right to require Beijing NIO’s shareholders (i.e., the Registered Shareholders) to immediately pay any amount
payable by Beijing NIO under the Exclusive Business Cooperation Agreement, repay any loans and pay any other due payments, and
Shanghai NIO shall have the right to exercise all such rights as a secured party under any applicable mainland China law and the Equity
Pledge Agreements, including without limitations, being paid in priority with the equity interests based on the monetary valuation that
such equity interests are converted into or from the proceeds from auction or sale of the equity interest upon written notice to the
Registered Shareholders.
The registration of the Equity Pledge Agreements as required by the relevant laws and regulations has been completed in
accordance with the terms of the Equity Pledge Agreements and the PRC laws and regulations.
Power of Attorney by Registered Shareholders
The Registered Shareholders have executed powers of attorney dated April 19, 2018 and April 12, 2021, respectively, (the
“Powers of Attorney”). Under the Powers of Attorney, the Registered Shareholders irrevocably appointed Shanghai NIO and their
designated persons (including but not limited to directors and their successors and liquidators replacing the directors but excluding those
non-independent or who may give rise to conflict of interests) as their attorneys-in-fact to exercise on their behalf, and agreed and
undertook not to exercise without such attorneys-in-fact’s prior written consent, any and all right that they have in respect of their equity
interests in Beijing NIO, including without limitation:
(i)
(ii)
(iii)
(iv)
(v)
to convene and attend shareholders’ meetings of Beijing NIO;
to file documents with the relevant companies registry;
to exercise all shareholder’s rights and shareholder’s voting rights in accordance with law and the constitutional
documents of Beijing NIO, including but not limited to the sale, transfer, pledge or disposal of any or all of the equity
interests in Beijing NIO;
to execute any and all written resolutions and meeting minutes and to approve the amendments to the articles of
associations in the name and on behalf of such shareholder; and
to nominate, appoint or remove the legal representatives, directors, supervisors, general manager and other senior
management of Beijing NIO.
Further, the Powers of Attorney shall remain effective for so long as each shareholder holds equity interest in Beijing NIO.
Loan Agreements between Shanghai NIO and Registered Shareholders
Shanghai NIO and the Registered Shareholders entered into loan agreements dated April 19, 2018 and April 12, 2021,
respectively, (the “Loan Agreements”), pursuant to which Shanghai NIO agreed to provide loans to the Registered Shareholders, to be
used exclusively as investment in Beijing NIO. The loans must not be used for any other purposes without the relevant lender’s prior
written consent.
The term of each loan commences from the date of the agreement and ends on the date the lender exercises its exclusive call
option under the relevant Exclusive Option Agreement, or when certain defined termination events occur, such as if the lender sends a
written notice demanding repayment to the borrower, or upon the default of the borrower, whichever is earlier.
After the lender exercises his exclusive call option, the borrower may repay the loan by transferring all of its equity interest in
Beijing NIO to the lender, or a person or entity nominated by the lender, and use the proceeds of such transfer as repayment of the loan.
If the proceeds of such transfer are equal to or less than the principal of the loan under the relevant Loan Agreement, the loan is
considered interest-free. If the proceeds of such transfer are higher than the principal of the loan under the relevant Loan Agreement, any
surplus is considered interest for the loan under the relevant Loan Agreement.
In the opinion of Han Kun Law Offices, our PRC legal counsel:
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(i)
(ii)
(iii)
each of the agreements comprising the contractual arrangements is legal, valid and binding on the parties thereto,
enforceable under applicable PRC laws and regulations, except that (a) the contractual arrangements provide that the
arbitral body may award remedies over the shares and/or assets or award injunctive relief and/or order the winding up
of Beijing NIO, and that courts of competent jurisdictions are empowered to grant interim remedies in support of the
arbitration pending the formation of an arbitral tribunal or in appropriate cases, while under PRC laws and regulations,
an arbitral body has no power to grant injunctive relief or to order an entity to wind up, and the aforesaid interim
remedies granted by competent courts may not be recognizable or enforceable in the PRC; and (b) the contractual
arrangements provide that the Registered Shareholders undertake to appoint committees designated by Shanghai NIO
as the liquidation committee upon the winding up of Beijing NIO to manage its assets; however, in the event of a
mandatory liquidation required by PRC laws and regulations, these provisions may not be enforceable;
each of the agreements comprising the contractual arrangements does not violate the provisions of the articles of
associations of Shanghai NIO and Beijing NIO, respectively; and
no approval or authorization from the PRC governmental authorities are required for entering into and the performance
of the contractual arrangements except that (a) the pledge of any equity interest in Beijing NIO for the benefit of
Shanghai NIO is subject to registration requirements with the relevant governmental authority which has been duly
completed; (b) the exercise of any exclusive option rights by Shanghai NIO under the exclusive option agreements may
subject to the approval, filing or registration requirements with the relevant authorities under the then prevailing PRC
laws and regulations; and (c) the arbitration awards/interim remedies provided under the dispute resolution provision of
the contractual arrangements shall be recognized by competent courts before compulsory enforcement.
For a description of the risks related to our corporate structure, please see “Item 3. Key Information—D. Risk Factors—Risks
Related to Our Corporate Structure.”
D.
Property, Plants and Equipment
Currently, we own land use rights with respect to a parcel of land in Nanjing of approximately 355,297.72 square meters and the
ownership with respect to the plant thereon for a term ending on March 10, 2063, which are used for the manufacture of our electric
powertrains. As of December 31, 2022, we also leased a number of our facilities in various cities in China mainly for user centers,
warehouses, power management centers and sales, marketing and customer service with an aggregated floor area of approximately
995,391.26 square meters. As of December 31, 2022, we leased property in North America for our North American headquarters and
global software development center, and sales, marketing, light assembly, research and development center with an aggregate floor area
of 386,466 square feet; we leased properties in Europe for management, engineering and storage and design headquarters with an
aggregate floor area of 328,027 square meters.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations is based upon and should be read in conjunction
with our consolidated financial statements and their related notes included elsewhere in this annual report. This annual report contains
forward-looking statements. See “Forward-Looking Information.” In evaluating our business, you should carefully consider the
information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our
businesses and financial performance are subject to substantial risks and uncertainties.
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A. Operating Results
Overview
We are a pioneer and a leading company in the premium smart electric vehicle market. We design, develop, jointly manufacture
and sell premium smart electric vehicles, driving innovations in autonomous driving, digital technologies, and electric powertrains and
batteries. We differentiate ourselves through our continuous technological breakthroughs and innovations, such as our industry-leading
battery swapping technologies, BaaS, as well as our proprietary autonomous driving technologies and ADaaS.
Our product portfolio currently consists of the ES8, a six-seater smart electric flagship SUV, the ES7 (or the EL7), a mid-large
five-seater smart electric SUV, the ES6, a five-seater all-round smart electric SUV, the EC7, a five-seater smart electric flagship coupe
SUV, the EC6, a five-seater smart electric coupe SUV, the ET7, a smart electric flagship sedan, and the ET5, a mid-size smart electric
sedan. In 2022, we delivered 122,486 vehicles, including 14,351 ES8s, 42,012 ES6s, 17,076 EC6s, 23,075 ET7s, 11,813 ET5s and
14,159 ES7s.
Impact of COVID-19 on Our Operations
The majority of our revenues are derived from sales of our vehicles in China. Our results of operations and financial condition
have been affected by the spread of COVID-19 since the first quarter of 2020. The COVID-19 pandemic has impact on China’s auto
industry in general and the production and delivery of vehicles of our company. Our operations experienced disruptions in 2020, 2021
and 2022, such as temporary closure of our offices and/or those of our customers or suppliers and suspension of services, resulting in a
reduction of vehicles manufactured and delivered, which affected our business, financial condition, results of operations and cash flow.
We worked closely with JAC, the joint manufacturer of our vehicles, to resume productions and minimize the impact of COVID-19 on
our manufacturing capabilities. In addition, we strived to expand our traffic channels, integrate our online and offline sales efforts and
offer high-quality services to bring business and operation back to normal.
There has been an easing of the travel restrictions and quarantine requirements related to COVID-19 in China since December
2022. However, there remains uncertainty as to the future impact of the virus. The extent to which the pandemic impacts our results of
operations going forward will depend on future developments which are highly uncertain and unpredictable, including the frequency,
duration and extent of outbreaks of COVID-19, the appearance of new variants with different characteristics, the success or failure of
efforts to contain or treat cases, and future actions we or the authorities may take in response to these developments. In addition, our
financial position, results of operations and cash flows could be adversely affected to the extent that the pandemic harms the Chinese
economy in general. As of December 31, 2022, we had cash and cash equivalents, restricted cash and short-term investments of
RMB42,212.8 million (US$6,120.3 million). We believe this level of liquidity is sufficient to successfully navigate an extended period of
uncertainty.
See “Item 3. Key Information — D. Risk Factors —Risks Related to Our Business and Industry—Our business, financial
condition and results of operations may be adversely affected by the COVID-19 pandemic.”
Key Line Items Affecting Our Results of Operations
Revenues
The following table presents our revenue components by amount and as a percentage of the total revenues for the periods
indicated.
Revenues:
Vehicle sales
Other sales(1)
Total revenues
Note:
2020
RMB
%
RMB
2021
%
(in thousands)
2022
RMB
US$
%
Year Ended December 31
15,182,522
1,075,411
16,257,933
93.4
6.6
100.0
33,169,740
2,966,683
36,136,423
91.8
8.2
100.0
45,506,581
3,761,980
49,268,561
6,597,834
545,436
7,143,270
92.4
7.6
100.0
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(1) Other sales are comprised as below:
Other sales
Sales of packages and provision of power solution
Sales of charging piles
Sales of automotive regulatory credits
Battery upgrade service
Others
Total
Year Ended December 31,
2020
2021
2022
RMB
%
RMB
%
(in thousands)
RMB
US$
%
244,072
229,781
120,648
5,346
475,564
1,075,411
1.5
1.4
0.8
0.0
2.9
6.6
526,171
319,386
516,549
291,218
1,313,359
2,966,683
1.5
0.9
1.4
0.8
3.6
8.2
857,912
405,246
67,291
64,123
2,367,408
3,761,980
124,386
58,755
9,756
9,297
343,242
545,436
1.7
0.8
0.1
0.1
4.9
7.6
We began generating revenues in June 2018, when we began making deliveries of the ES8. We currently generate revenues from
vehicle sales, which represent revenues from sales of new vehicles, and other sales including (a) sales of packages and provision of
power solution, including the sales of our service package and energy package and provision of charging and battery swapping services,
(b) sales of charging piles, including home chargers provided as one of the performance obligations in the contract of vehicle sales, and
additional charging piles sold separately, (c) sales of automotive regulatory credits, (d) battery upgrade service, which represents the
battery upgrade program for providing incremental battery capacity to the users; and (e) others, which mainly consist of revenues from
sales of accessories, interest income from our auto financing arrangement, embedded products and services offered together with vehicle
sales, etc.. Embedded products and services include vehicle connectivity service and extended warranty.
Revenue from sales of new vehicles, charging piles, battery upgrade service, automotive regulatory credits and sales of
accessories are recognized when controls are transferred. For vehicle connectivity services and battery swapping service, we recognize
revenue using a straight-line method. As for the extended warranty, given our limited operating history and lack of historical data, we
recognize revenue over time based on a straight-line method initially, and will continue monitoring the cost pattern periodically and
adjust the revenue recognition pattern to reflect the actual cost pattern as it becomes available with more data. Revenues for our energy
package or service package are recognized over time on a monthly basis as our users simultaneously receive and consume the benefits of
the related package and the legally enforceable term is only one month.
Cost of Sales
The following table presents our cost of sales components by amount and as a percentage of our total cost of sales for the period
indicated.
Cost of Sales:
Vehicle sales
Other sales
Total cost of sales
2020
RMB
%
RMB
2021
%
(in thousands)
2022
RMB
US$
%
Year Ended December 31,
(13,255,770)
(1,128,744)
(14,384,514)
92.2
7.8
100.0
(26,516,643)
(2,798,347)
(29,314,990)
90.5
9.5
100.0
(39,271,801)
(4,852,767)
(44,124,568)
(5,693,876)
(703,585)
(6,397,461)
89.0
11.0
100.0
We incur cost of sales in relation to (i) vehicle sales, including parts, materials, processing fee, labor costs, manufacturing cost
(including depreciation of assets associated with the production), losses on production related purchase commitments, warranty
expenses, and inventory write-downs, and (ii) other sales, including parts, materials, labor costs, vehicle connectivity cost, and
depreciation of assets that are associated with sales of service and others.
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Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of (i) design and development expenses, which include, among others,
consultation fees, outsourcing fees and expenses of testing materials and (ii) employee compensation, representing salaries, benefits and
bonuses as well as share-based compensation expenses for our research and development staff. Our research and development expenses
also include travel expenses, depreciation and amortization of equipment used in relation to our research and development activities,
rental and related expenses with respect to laboratories and offices for research and development teams and others, which primarily
consists of telecommunication expenses, office fees and freight charges.
Our research and development expenses are mainly driven by the number of our research and development employees, the stage
and scale of our vehicle development and development of technology.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses include (i) employee compensation, including salaries, benefits and bonuses as
well as share-based compensation expenses with respect to our sales, marketing and general corporate staff, (ii) marketing and
promotional expenses, which primarily consist of marketing and advertising costs, and sponsorship fees related to our Formula E team,
(iii) rental and related expenses, which primarily consist of rental for NIO Houses, NIO Spaces and offices, (iv) professional service
expenses, which consist of outsourcing fees primarily relating to human resources and IT functions, design fees paid for NIO Houses,
NIO Spaces and offices and fees paid to auditors and legal counsel, (v) depreciation and amortization expenses, primarily consisting of
depreciation and amortization of leasehold improvements, IT equipment and software, among others, (vi) expenses of low value
consumables, primarily consisting of, among others, IT consumables, office supplies, sample fees and IT-system related licenses, (vii)
traveling expenses, and (viii) other expenses, which includes telecommunication expenses, utilities and other miscellaneous expenses.
Our selling, general and administrative expenses are significantly affected by the number of our non-research and development
employees, marketing and promotion activities and the expansion of our sales and after-sales network, including NIO Houses, NIO
Spaces and other leased properties.
Interest and Investment Income
Interest and investment income primarily consists of interest and gain earned on cash deposits, short-term investment and long-
term investment.
Gain on extinguishment of debt
Gain on extinguishment of debt consists of gain earned from repurchase of convertible notes.
Interest Expense
Interest expense consists of interest expense with respect to our indebtedness.
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Share of Income of Equity Investees
Share of income of equity investees primarily consists of our share of the losses, net of shares of gains of our investees in which,
as of December 31, 2022, we held 1.0% to 51.0% equity interest. Our equity interest is accounted for using the equity method since we
exercise significant influence but do not own a majority equity interest in or control those investees. For investees in which we held
equity interest less than 20%, we can exercise significant influence over investees through participation and voting right in the board of
directors or investment committee. For investee in which we held equity interest of 51.0%, we cannot determine the significant financial
and operating decisions of this investee at our discretion according to the corporate government documents.
Other Income/(Loss), Net
Other income or losses primarily consist of foreign exchange gains or losses we incur based on movements between the U.S.
dollar and the Renminbi. Other income also includes income from reimbursement from depository bank.
Income Tax Expense
Income tax expense primarily consists of current income tax expense, mainly attributable to intra-group income earned by our
United States, German, UK, Hong Kong and PRC subsidiaries which are eliminated upon consolidation but were subject to tax in
accordance with applicable tax law, and deferred income tax expense, recognized for the tax consequences attributable to differences
between carrying amounts of existing assets and liabilities in the financial statements and their respective tax basis, and operating loss
carry-forwards.
Taxation
Cayman Islands
We are incorporated in the Cayman Islands. The Cayman Islands currently have no form of income, corporate or capital gains
tax and no estate duty, inheritance tax or gift tax. There are no other taxes likely to be material to us levied by the government of the
Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the
jurisdiction of the Cayman Islands.
Hong Kong
Subsidiaries incorporated in Hong Kong are subject to 8.25% profit tax on the first HKD2 million taxable income and 16.5%
profit tax on the remaining taxable income generated from operations in Hong Kong. There is no withholding tax in Hong Kong on
remittance of dividends.
PRC
Generally, our PRC subsidiaries are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%,
except for our certain PRC subsidiaries that are qualified as high and new technology enterprises under the PRC Enterprise Income Tax
Law and are eligible for a preferential enterprise income tax rate of 15%. The enterprise income tax is calculated based on the entity’s
global income as determined under PRC tax laws and accounting standards.
Our products and services are primarily subject to value-added tax at a rate of 13% on the vehicles and charging piles, repair
and maintenance services and charging services as well as 6% on services such as research and development services, in each case less
any deductible value-added tax we have already paid or born. We are also subject to surcharges on value-added tax payments in
accordance with PRC law.
Dividends paid by our PRC subsidiaries in China to our Hong Kong subsidiaries will be subject to a withholding tax rate of
10%, unless the relevant Hong Kong entity satisfies all the requirements under the Double Taxation Avoidance Arrangement and
receives approval from the relevant tax authority. If our Hong Kong subsidiaries satisfy all the requirements under the tax arrangement
and receive approval from the relevant tax authority, then the dividends paid to the Hong Kong subsidiaries would be subject to
withholding tax at the standard rate of 5%. Effective from November 1, 2015, the above-mentioned approval requirement has been
abolished, but a Hong Kong entity is still required to file application package with the relevant tax authority, and settle the overdue taxes
if the preferential 5% tax rate is denied based on the subsequent review of the application package by the relevant tax authority.
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If NIO Inc. or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC Enterprise
Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Under the PRC Enterprise Income Tax Law, research and development expenses incurred by an enterprise in the course of
carrying out research and development activities that have not formed intangible assets and are included in the profit and loss account for
the current year. Besides deducting the actual amount of research and development expenses incurred, an enterprise is allowed an
additional 75%/100% deduction of the amount in calculating its taxable income for the relevant year. For research and development
expenses that have formed intangible assets, the tax amortization is based on 175%/200% of the costs of the intangible assets.
Recently Issued Accounting Pronouncements
For a summary of recently issued accounting pronouncements, see Note 3 to our consolidated financial statements included
elsewhere in this annual report.
Results of Operations
The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information
should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The
operating results in any year are not necessarily indicative of the results that may be expected for any future periods.
Revenues:(1)
Vehicle sales
Other sales(3)
Total revenues
Cost of sales:(2)
Vehicle sales
Other sales
Total cost of sales
Gross profit
Operating expenses:(2)
Research and development(2)
Selling, general and administrative(2)
Other operating (loss)/income, net
Total operating expenses
Loss from operations
Interest and investment income
Interest expenses
Gain on extinguishment of debt
Share of (loss)/income of equity investees
Other (loss)/income, net
Loss before income tax expense
Income tax expense
Net loss
Other comprehensive income/(loss)
Change in unrealized gains related to available-for-sale debt securities, net of tax
Foreign currency translation adjustment, net of nil tax
Total other comprehensive income/(loss)
Total comprehensive loss
Accretion on redeemable non-controlling interests to redemption value
Net loss attributable to non-controlling interests
Other comprehensive income attributable to non-controlling interests
Comprehensive loss attributable to ordinary shareholders of NIO Inc.
Notes:
2020
RMB
15,182,522
1,075,411
16,257,933
(13,255,770)
(1,128,744)
(14,384,514)
1,873,419
(2,487,770)
(3,932,271)
(61,023)
(6,481,064)
(4,607,645)
166,904
(426,015)
—
(66,030)
(364,928)
(5,297,714)
(6,368)
(5,304,082)
—
137,596
137,596
(5,166,486)
(311,670)
4,962
—
(5,473,194)
Year Ended December 31,
2021
RMB
RMB
(in thousands)
2022
US$
33,169,740
2,966,683
36,136,423
(26,516,643)
(2,798,347)
(29,314,990)
6,821,433
(4,591,852)
(6,878,132)
152,248
(11,317,736)
(4,496,303)
911,833
(637,410)
—
62,510
184,686
(3,974,684)
(42,265)
(4,016,949)
24,224
(230,345)
(206,121)
(4,223,070)
(6,586,579)
31,219
(4,727)
(10,783,157)
45,506,581
3,761,980
49,268,561
(39,271,801)
(4,852,767)
(44,124,568)
5,143,993
(10,836,261)
(10,537,119)
588,728
(20,784,652)
(15,640,659)
1,358,719
(333,216)
138,332
377,775
(282,952)
(14,382,001)
(55,103)
(14,437,104)
746,336
717,274
1,463,610
(12,973,494)
(279,355)
157,014
(151,299)
(13,247,134)
6,597,834
545,436
7,143,270
(5,693,876)
(703,585)
(6,397,461)
745,809
(1,571,110)
(1,527,739)
85,358
(3,013,491)
(2,267,682)
196,996
(48,312)
20,056
54,772
(41,024)
(2,085,194)
(7,989)
(2,093,183)
108,209
103,995
212,204
(1,880,979)
(40,503)
22,765
(21,936)
(1,920,653)
(1) We began generating revenues in June 2018, when we began making deliveries and sales of the ES8. We currently generate revenues
from vehicle sales and other sales.
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(2) Share-based compensation expenses were allocated in cost of sales and operating expenses as follows:
Cost of sales
Research and development expenses
Selling, general and administrative expenses
Total
5,564
51,024
130,506
187,094
34,009
406,940
569,191
1,010,140
66,914
1,323,370
905,612
2,295,896
9,702
191,871
131,301
332,874
(3) Other sales mainly consist of revenues from sales of packages and provision of power solution, battery upgrade service, automotive
regulatory credits, accessories, and a number of embedded products and services offered together with vehicle sales. Embedded
products and services include home chargers, vehicle connectivity service, extended warranty and battery swapping service.
Years Ended December 31, 2022 and 2021
Revenues
Our revenues increased by 36.3% from RMB36,136.4 million in 2021 to RMB49,268.6 million (US$7,143.3 million) in 2022,
primarily attributable to (i) an increase of vehicle delivery volume by 34.0% in 2022 as compared to 2021 mainly due to a more
diversified product mix offered to our users, (ii) an increase in other revenue by RMB1,471.7 million from sales of packages and
provision of power solution, charging piles and other sales, which was in line with the incremental vehicle sales, and partially offset by
(iii) the decrease in revenue from sales of automotive regulatory credits by RMB449.3 million due to decreased sales of credits with
lower selling prices and volumes, and (iv) a decrease in revenue from battery upgrade services by RMB227.1 million, mainly due to the
cumulative demand having been fulfilled in 2021.
Cost of sales
Our cost of sales increased by 50.5% from RMB29,315.0 million in 2021 to RMB44,124.6 million (US$6,397.5 million) in
2022, primarily attributable to an increase in cost of vehicle sales by RMB12,755.2 million and an increase of cost of packages and
provision of power solution by RMB1,547.8 million, which is mainly due to (i) an increase of vehicle delivery volume by 34.0% in 2022,
(ii) higher battery cost per vehicle, (iii) inventory provisions, accelerated depreciation on production facilities, and losses on purchase
commitments for the existing generation of ES8, ES6 and EC6 which are expected to have lower production and delivery levels due to
their transition to new models under NT2.0, (RMB985.4 million in total), and (iv) higher depreciation and operating cost from the
expanded investment in our power and service network.
Gross Profit and Gross Margin
Our gross profit decreased by 24.6% from RMB6,821.4 million in 2021 to RMB5,144.0 million (US$745.8 million) in 2022.
The decrease of gross profit compared to 2021 was mainly driven by the decrease of profit from sales of packages and provision of
power solution with RMB1,216 million as a result of the expanded investment in our power and service network, and the decrease of
RMB449.3 million from sales of the automotive regulatory credits with high sales margin.
Gross margin in 2022 was 10.4%, compared with 18.9% in 2021. The decrease of gross margin as compared to 2021 was
mainly driven by the decrease of vehicle margin and other sales margin in 2022.
Vehicle margin in 2022 was 13.7%, compared with 20.1% in 2021. The decrease of vehicle margin as compared to 2021 was
mainly driven by (i) the increased battery cost per vehicle with negative impact of around 3.8%, and (ii) the increased inventory
provisions, accelerated depreciation on production facilities, and losses on purchase commitments for the existing generation of ES8,
ES6 and EC6 which are expected to have lower production levels and deliveries due to their transition to new models under NT2.0, with
a negative impact of 2.2% on vehicle margin.
Other sales margin in 2022 was negative 29.0%, compared with 5.7% in 2021, which was mainly driven by (i) decrease of
margin from sales of packages and provision of power solution with a negative impact of 24.8% as a result of the expanded investment in
power and service network, (ii) the decrease of margin from sales of automotive regulatory credits which with high sales margin, with
negative impact of 15.6%, and (iii) partially offset by increase of interest income from our auto financing arrangement and other sales
with high margin.
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Research and Development Expenses
Research and development expenses increased by 136.0% from RMB4,591.9 million in 2021 to RMB10,836.3 million
(US$1,571.1 million) in 2022, primarily due to increased personnel costs in research and development functions of RMB4,026.8 million
as well as the incremental design and development costs of RMB1,704.1 million for new products and technologies.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by 53.2% from RMB6,878.1 million in 2021 to RMB10,537.1 million
(US$1,527.7 million) in 2022, primarily due to (i) increased employee compensation expense of RMB1,638.2 million due to an increase
in sales and general corporate functions, (ii) increased rental and related expense and professional service expense which totaled
RMB913.9 million mainly due to the Company’s sales and service network expansion, (iii) increased marketing and promotional
expenses of RMB347.2 million due to an increase in marketing and promotional activities to promote our vehicles in China and Europe.
Loss from Operations
As a result of the foregoing, we incurred a loss from operations of RMB15,640.7 million (US$2,267.7 million) in 2022,
representing an increase of 247.9% as compared to a loss of RMB4,496.3 million in 2021.
Interest and investment income
We recorded interest and investment income of RMB1,358.7 million (US$197.0 million) in 2022, representing an increase of
49.0% as compared to RMB911.8 million in 2021, primarily due to the increase in short-term investment and long-term time deposits on
average throughout 2022.
Interest Expense
Our interest expense decreased from RMB637.4 million in 2021 to RMB333.2 million (US$48.3 million) in 2022, primarily due
to the conversion premium charged in connection with separately and individually negotiated agreements with certain holders of their
outstanding 2024 Notes for early conversion in January 2021.
Gain on extinguishment of debt
Our gain on extinguishment of debt was RMB138.3 million (US$20.1 million) in 2022, compared with nil in 2021, which was
attributed to the gain from the repurchase of a portion of the 2026 Notes with a carrying amount of RMB1,317.1 million (US$191.0
million) in 2022.
Share of Income of Equity Investees
We recorded share of income of equity investees of RMB377.8 million (US$54.8 million) in 2022, as compared to RMB62.5
million in 2021, primarily due to the increased share of income recorded from our equity investments measured under equity method due
to increased earnings of equity investees in 2022.
Other Income/(Loss), Net
We recorded other losses of RMB283.0 million (US$41.0 million) in 2022, as compared with other income of RMB184.7
million in 2021, primarily due to a foreign exchange loss of RMB504.7 million mainly reflecting the revaluation impact of overseas
Renminbi-related assets as a result of Renminbi’s depreciation against U.S. dollars.
Income Tax Expense
In 2022, our income tax expense was RMB55.1 million (US$8.0 million), as compared to RMB42.3 million in 2021.
Net Loss
As a result of the foregoing, we incurred a net loss of RMB14,437.1 million (US$2,093.2 million) in 2022, representing an
increase of 259.4% as compared to a net loss of RMB4,016.9 million in 2021.
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Years Ended December 31, 2021 and 2020
Revenues
Our revenues increased by 122.3% from RMB16,257.9 million in 2020 to RMB36,136.4 million in 2021, primarily attributable
to (i) an increase of vehicle delivery volume by 109.1% in 2021 as compared to 2020 mainly due to a more diversified product mix
offered to our users, (ii) an increase in the average selling price of our vehicles by 6.0% mainly due to the higher percentage of vehicles
sold with long-range batteries, which we offer at a higher selling price, that we started to offer in the second half of 2020; (iii) an increase
in revenue from the sales of automotive regulatory credits by RMB395.9 million due to increased sales of credits with higher selling
prices; (iv) an increase in other revenue by 175.9%, which was in line with the incremental vehicle sales, and (v) an increase in revenue
from the battery upgrade service by RMB1,204.2 million, as we launched such service in the second half of 2020.
Cost of sales
Our cost of sales increased by 103.8% from RMB14,384.5 million in 2020 to RMB29,315.0 million in 2021, primarily
attributable to an increase in cost of vehicle sales by RMB13,260.9 million, which was mainly due to the increase of vehicle delivery
volume in 2021.
Gross Profit and Gross Margin
Our gross profit increased significantly from RMB1,873.4 million in 2020 to RMB6,821.4 million in 2021. The increase of
gross profit compared to 2020 was mainly driven by the increase of vehicle delivery volume and vehicle margin.
Gross margin in 2021 was 18.9%, compared with 11.5% in 2020. The increase of gross margin as compared to 2020 was mainly
driven by the increase of vehicle margin in 2021.
Vehicle margin in 2021 was 20.1%, compared with 12.7% in 2020. The increase of vehicle margin as compared to 2020 was
mainly driven by the economies of scale achieved as a result of vehicle production and delivery volume increase, and higher average
selling price primarily due to higher take rate of the Long Range Battery that we started to offer in the second half of 2020.
Other sales margin in 2021 was 5.7%, compared with negative 5% in 2020, which was mainly driven by the increase of
automotive regulatory credits with high sales margin.
Research and Development Expenses
Research and development expenses increased by 84.6% from RMB2,487.8 million in 2020 to RMB4,591.9 million in 2021,
primarily due to increased personnel costs in research and development functions of RMB1,295.9 million as well as the incremental
design and development costs of RMB749.4 million for new products and technologies.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by 74.9% from RMB3,932.3 million in 2020 to RMB6,878.1 million in
2021, primarily attributed to (i) increased employee compensation expense of RMB1,206.4 million mainly due to increase in personnel
headcount in the sales and service functions, (ii) increased marketing and promotional expenses of RMB753.1 million due to an increase
in marketing and promotional activities to promote our vehicles, and (iii) increased rental and related expense and professional service
expense which totaled RMB560.6 million mainly due to the Company’s sales and service network expansion.
Loss from Operations
As a result of the foregoing, we incurred a loss from operations of RMB4,496.3 million in 2021, representing a slight decrease
of 2.4% as compared to a loss of RMB4,607.6 million in 2020.
Interest and Investment Income
We recorded interest and investment income of RMB911.8 million in 2021, representing a significant increase as compared to
RMB166.9 million in 2020, primarily due to a significant increase of RMB33,106.8 million in short-term investment.
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Interest Expense
Our interest expense increased from RMB426.0 million in 2020 to RMB637.4 million in 2021, primarily due to the conversion
premium of RMB363.4 million charged in connection with separately and individually negotiated agreements with certain holders of
their outstanding 2024 Notes for early conversion in January 2021, offset by the decrease of interest expense of RMB188.5 million in the
remaining period of 2021 for the portion of 2024 Notes that was early converted.
Share of (Loss)/Income of Equity Investees
We recorded share of income of equity investees of RMB62.5 million in 2021, as compared to share of loss of equity investee of
RMB66.0 million in 2020, primarily due to the investment gains recorded from our equity investments measured under equity method in
2021, including a gain of RMB104.6 million recognized as a result of the dilution of our ownership in one investee as a result of a
financing transaction completed by the investee.
Other (Loss)/Income, Net
We recorded other income of RMB184.7 million in 2021, as compared with other losses of RMB364.9 million in 2020,
primarily due to foreign exchange adjustments of RMB551.5 million in connection with the movements between the U.S. dollar and the
Renminbi.
Income Tax Expense
In 2021, our income tax expense was RMB42.3 million, as compared to RMB6.4 million in 2020, primarily attributable to the
increased taxable income reported by certain subsidiaries.
Net Loss
As a result of the foregoing, we incurred a net loss of RMB4,016.9 million in 2021, representing a decrease of 24.3% as
compared to a net loss of RMB5,304.1 million in 2020.
B.
Liquidity and Capital Resources
Cash Flows and Working Capital
We had net cash provided by operating activities of RMB1,950.9 million, RMB1,966.4 million in 2020, 2021, respectively, and
net cash used in operating activities of RMB3,866.0 million (US$560.5 million) in 2022.
As of December 31, 2022, we had a total of RMB42,326.3 million (US$6,136.7 million) in cash and cash equivalents, restricted
cash (including non-current restricted cash) and short-term investments. As of December 31, 2022, 70.3% of our cash and cash
equivalents and restricted cash (including non-current restricted cash) and short-term investments were denominated in Renminbi and
held in PRC and Hong Kong and the other cash and cash equivalents and restricted cash (including non-current restricted cash) and
short-term investments were mainly denominated in US$ and held in the PRC, Hong Kong and United States. Our cash and cash
equivalents consist primarily of cash on hand, time deposits and highly liquid investments placed with banks, which are unrestricted as to
withdrawal and use, and which have original maturities of three months or less.
As of December 31, 2022, we had bank facilities with an aggregated amount of RMB56,121.5 million (US$8,136.9 million),
which consists of non-collateral based bank facilities of RMB28,411.5 million (US$4,119.3 million) and collateral-based bank facilities
of RMB27,710.0 million (US$4,017.6 million). Out of the total non-collateral based bank facilities, RMB2,838.8 million (US$411.6
million), RMB3,264.3 million (US$473.3 million), and RMB350.0 million (US$50.7 million) were used for bank borrowing, issuance of
letters of guarantee, and bank’s acceptance notes, respectively. Out of the total collateral-based bank facilities, RMB2,650.0 million
(US$384.2 million), RMB5,884.5 million (US$853.2 million), and RMB300.0 million (US$43.5 million) were used for issuance of
letters of guarantee, bank’s acceptance notes and letter of credit, respectively.
As of December 31, 2022, we had RMB10,885.8 million (US$1,578.3 million), in total long-term borrowings outstanding,
consisting primarily of the 2024 Notes, 2026 Notes and 2027 Notes, portions of the asset-backed notes, and our long-term bank debt.
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The 2024 Notes are unsecured debt and are not redeemable by us prior to the maturity date except for certain changes in tax law.
In accordance with the indenture governing the 2024 Notes, or the 2024 Notes Indenture, holders of the 2024 Notes may require us to
purchase all or any portion of their notes on February 1, 2022 at a repurchase price equal to 100% of the principal amount of the 2024
Notes to be repurchased, plus accrued and unpaid interest. Such repurchase right offer expired on January 28, 2022. None of the
noteholders exercised their repurchase right, and no notes were surrendered for repurchase. Holders of the 2024 Notes may also require
us, upon a fundamental change (as defined in the 2024 Notes Indenture), to repurchase for cash all or part of their 2024 Notes at a
fundamental change repurchase price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus accrued and
unpaid interest. The holders of the 2024 Notes may convert their notes to a number of our ADSs at their option at any time prior to the
close of business on the second business day immediately preceding the maturity date pursuant to the 2024 Notes indenture, at a
conversion rate of 105.1359 ADSs per US$1,000 principal amount of the 2024 Notes. The 2024 Notes that are converted in connection
with a make-whole fundamental change (as defined in the 2024 Notes Indenture) may be entitled to an increase in the conversion rate for
such 2024 Notes. In connection with the issuance of the 2024 Notes, we entered into capped call transactions and zero-strike call option
transactions. Satisfying the obligations of the 2024 Notes could adversely affect the amount or timing of any distributions to our
shareholders. As of December 31, 2022, approximately US$163.7 million principal amount of the 2024 Notes were outstanding. We may
choose to satisfy, repurchase, or refinance the 2024 Notes through public or private equity or debt financings if we deem such financings
available on favorable terms.
In January 2021, we issued US$750 million aggregate principal amount of 0.00% convertible senior notes due 2026, or the 2026
Notes, and US$750 million aggregate principal amount of 0.50% convertible senior notes due 2027, or the 2027 Notes. The 2026 Notes
and the 2027 Notes are unsecured debt. The 2026 Notes will not bear interest, and the principal amount of the 2026 Notes will not
accrete. The 2027 Notes will bear interest at a rate of 0.50% per year. The 2026 Notes will mature on February 1, 2026 and the 2027
Notes will mature on February 1, 2027, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
Prior to August 1, 2025, in the case of the 2026 Notes, and August 1, 2026, in the case of the 2027 Notes, the 2026 Notes and the 2027
Notes, as applicable, will be convertible at the option of the holders only upon satisfaction of certain conditions and during certain
periods. Holders may convert their 2026 Notes or 2027 Notes, as applicable, at their option at any time on or after August 1, 2025, in the
case of the 2026 Notes, or August 1, 2026, in the case of the 2027 Notes, until the close of business on the second scheduled trading day
immediately preceding the relevant maturity date. Upon conversion, we will pay or deliver to such converting holders, as the case may
be, cash, ADSs, or a combination of cash and ADSs, at our election. The initial conversion rate of the 2026 Notes is 10.7458 ADSs per
US$1,000 principal amount of such 2026 Notes. The initial conversion rate of the 2027 Notes is 10.7458 ADSs per US$1,000 principal
amount of such 2027 Notes. The relevant conversion rate for such series of the 2026 Notes and the 2027 Notes is subject to adjustment
upon the occurrence of certain events. Holders of the 2026 Notes and the 2027 Notes may require us to repurchase all or part of their
2026 Notes and 2027 Notes for cash on February 1, 2024, in the case of the 2026 Notes, and February 1, 2025, in the case of the 2027
Notes, or in the event of certain fundamental changes, at a repurchase price equal to 100% of the principal amount of the 2026 Notes or
the 2027 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the relevant repurchase date. In addition, on
or after February 6, 2024, in the case of the 2026 Notes, and February 6, 2025, in the case of the 2027 Notes, until the 20th scheduled
trading day immediately prior to the relevant maturity date, we may redeem the 2026 Notes or the 2027 Notes, as applicable for cash
subject to certain conditions, at a redemption price equal to 100% of the principal amount of the 2026 Notes or the 2027 Notes to be
redeemed, plus accrued and unpaid interest, if any, to, but excluding, the relevant optional redemption date. Furthermore, we may redeem
all but not part of the 2026 Notes or the 2027 Notes in the event of certain changes in the tax laws. Satisfying the obligations of the 2026
Notes and the 2027 Notes could adversely affect the amount or timing of any distributions to our shareholders. We may choose to satisfy,
repurchase, or refinance the 2026 Notes or the 2027 Notes through public or private equity or debt financings if we deem such financings
available on favorable terms.
Shortly after the pricing of the 2026 Notes and the 2027 Notes in January 2021, we entered into separate and individually
privately negotiated agreements with certain holders of the 2024 Notes to exchange approximately US$581.7 million principal amount of
the outstanding 2024 Notes for ADSs. The 2024 Notes Exchanges closed on January 15, 2021. In connection with the 2024 Notes
Exchanges, we also entered into agreements with certain financial institutions that are parties to our existing capped call transactions
(which we had entered into in February 2019 in connection with the issuance of the 2024 Notes) shortly after the pricing of the 2026
Notes and the 2027 Notes to terminate a portion of the relevant existing capped call transactions in a notional amount corresponding to
the portion of the principal amount of such 2024 Notes exchanged. In connection with such terminations of the existing capped call
transactions, we received deliveries of ADSs in such amounts as specified pursuant to such termination agreements on January 15, 2021.
The Affiliate Notes were issued in two tranches in September 2019. The Affiliate Notes issued in the first tranche matured in
360 days from the issuance date, bore no interest, and required us to pay a premium at 2% of the principal amount at maturity. The
Affiliate Notes issued in the second tranche matured on the date that was three years from the issuance date, bore no interest, and
required us to pay a premium at 6% of the principal amount at maturity. As of December 31, 2022, all of the Affiliate Notes were
converted into Class A ordinary shares or ADSs.
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As of December 31, 2022, we repurchased an aggregate principal amount of US$192.9 million of 2026 Notes for a total cash
consideration of US$170.5 million. Based on the outstanding principal amount of the 2024 Notes, the 2026 Notes and the 2027 Notes
and the highest conversion rate under each of the relevant indenture, the maximum number of ADSs that would be issued in connection
with the outstanding convertible notes is approximately 43.0 million.
Our principal sources of liquidity have been proceeds from issuances of equity securities, our notes offerings, our bank facilities
and cash flow from business operations. We have been applying a variety of methods to manage our working capital. We use just-in-
time, pull-production system to control the inventory level of the components. We adopt made-to-order model and do not maintain a high
level of inventories of vehicles. We aim to fulfill orders and deliver vehicles to our users within 21 to 28 days from the date users place
their orders. We manage the payment term policy to suppliers to improve our cash position. For most of our suppliers, the payment term
ranges from 30 to 90 days. Meanwhile, payment methods can be a combination of cash and notes payable.
We believe that our current cash, cash equivalents and short-term investments balance as of December 31, 2022 is sufficient to
fund our operating activities, capital expenditures and other obligations for at least the next twelve months. However, we may decide to
enhance our liquidity position or increase our cash reserve for future expansions and acquisitions through additional capital and/or
finance funding. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of
indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We
cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
The following table sets forth a summary of our cash flows for the periods indicated.
Summary of Consolidated Cash Flow Data:
Net cash outflow used in operating activities before movements in
working capital
Changes in operating assets and liabilities
Net cash provided by/(used in) operating activities
Net cash (used in)/provided by investing activities
Net cash provided by/(used in) financing activities
Effects of exchange rate changes on cash equivalents and restricted
cash
Net increase/(decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of the year
Cash, cash equivalents and restricted cash at end of the year
Operating Activities
2020
RMB
Year Ended December 31,
2021
RMB
RMB
(in thousands)
2022
US$
(2,878,979)
4,829,873
1,950,894
(5,071,060)
41,357,435
(726,358)
2,692,744
1,966,386
(39,764,704)
18,128,743
(8,309,972)
4,443,964
(3,866,008)
10,385,017
(1,616,384)
(682,040)
37,555,229
989,869
38,545,098
(500,959)
(20,170,534)
38,545,098
18,374,564
(121,896)
4,780,729
18,374,564
23,155,293
(1,204,830)
644,314
(560,516)
1,505,686
(234,355)
(17,674)
693,141
2,664,061
3,357,202
Net cash used in operating activities was RMB3,866.0 million (US$560.5 million) in 2022, primarily attributable to a net loss of
RMB14,437.1 million (US$2,093.2 million), adjusted for (i) non-cash items of RMB 6,127.1 million (US$888.4 million), which
primarily consisted of depreciation and amortization of RMB2,852.3 million (US$413.5 million), share-based compensation expenses of
RMB2,295.9 million (US$332.9 million), amortization of right-of-use assets of RMB1,141.7 million (US$165.5 million), (ii) a net
increase in changes in operating assets and liabilities by RMB4,444.0 million (US$644.3 million), which was primarily attributable to an
increase in trade and notes payable of RMB11,650.9 million (US$1,689.2 million), an increase in accruals and other liabilities of
RMB4,119.4 million (US$597.3 million), an increase in other non-current liabilities of RMB1,620.9 million (US$235.0 million), which
was partially offset by, among others, an increase in inventory of RMB 6,257.5 million (US$907.3 million), trade and notes receivable of
RMB2,303.4 million (US$334.0 million) and prepayments and other current assets of RMB1,239.9 million (US$179.8 million).
Net cash provided by operating activities was RMB1,966.4 million in 2021, primarily attributable to a net loss of RMB4,016.9
million, adjusted for (i) non-cash items of RMB3,290.6 million, which primarily consisted of depreciation and amortization of
RMB1,708.0 million, share-based compensation expenses of RMB1,010.1 million, amortization of right-of-use assets of RMB643.9
million and expected credit loss expense of RMB54.3 million, (ii) a net increase in changes in operating assets and liabilities by
RMB2,692.7 million, which was primarily attributable to an increase in trade and notes payable of RMB6,260.3 million, an increase in
other non-current liabilities of RMB1,778.4 million, an increase in taxes payable of RMB447.0 million and an increase in amount due to
related parties of RMB342.6 million, which was partially offset by, among others, an increase in trade and notes receivable of
RMB1,717.7 million and an increase of other non-current assets of RMB3,705.8 million.
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Net cash provided by operating activities was RMB1,950.9 million in 2020, primarily attributable to a net loss of RMB5,304.1
million, adjusted for (i) non-cash items of RMB 2,425.1 million, which primarily consisted of depreciation and amortization of
RMB1,046.5 million, amortization of right-of-use assets of RMB499.2 million, share-based compensation expenses of RMB187.1
million and foreign exchange loss of RMB457.4 million, (ii) a net increase in changes in operating assets and liabilities by RMB4,829.9
million, which was primarily attributable to an increase in trade and notes payable of RMB3,256.6 million, an increase in accruals and
other liabilities of RMB836.5 million, which was partially offset by, among others, a decrease in operating lease liabilities of RMB448.5
million and an increase in inventory of RMB197.8 million.
Investing Activities
Net cash provided by investing activities was RMB10,385.0 million (US$1,505.7 million) in 2022, primarily attributable to (i)
proceeds from sale of short-term investments of RMB106,658.2 million (US$15,464.0 million), partially offset by (ii) purchase of short-
term investments of RMB87,631.7 million (US$12,705.4 million), (iii) purchase of property, plant and equipment and intangible assets
of RMB6,972.9 million (US$1,011.0 million), (iv) purchase of held to maturity debt investments of RMB1,830.0 million (US$265.3
million).
Net cash used in investing activities was RMB39,764.7 million in 2021, primarily attributable to (i) purchases of short-term
investments of RMB134,316.2 million, (ii) purchase of property, plant and equipment and intangible assets of RMB4,078.8 million, (iii)
acquisitions of held to maturity debt investments RMB1,300.0 million, (iv) acquisitions of equity investees and equity security
investments of RMB592.6 million, and (v) purchase of available-for-sale debt investment of RMB650.0 million, partially offset by (i)
proceeds from sale of short-term investments of RMB101,121.7 million, and (ii) loan repayment from related parties of RMB50.0
million.
Net cash used in investing activities was RMB5,071.1 million in 2020, primarily attributable to (i) purchases of short-term
investments of RMB7,594. 1 million, (ii) purchase of property, plant and equipment and intangible assets of RMB 1,127.7 million, and
(iii) acquisition of equity investees of RMB250.8 million, partially offset by (i) proceeds from sale of short-term investments of
RMB3,738.5 million, and (ii) proceeds from disposal of property and equipment of RMB 163.1 million.
Financing Activities
Net cash used in financing activities was RMB1,616.4 million (US$234.4 million) in 2022, primarily attributable to repayments
of borrowings from third parties of RMB8,550.3 million (US$1,239.7 million), partially offset by proceeds from borrowings from third
parties of RMB6,918.6 million (US$1,003.1 million).
Net cash provided by financing activities was RMB18,128.7 million in 2021, primarily attributable to (i) proceeds from
issuance of ordinary shares, net of RMB12,677.6 million, (ii) proceeds from issuance of convertible promissory note of RMB9,560.8
million, (iii) proceeds from borrowings from third parties of RMB6,112.0 million, and (iv) proceeds from exercise of stock options of
RMB144.6 million, partially offset by (i) repurchase of redeemable non-controlling interests of RMB8,000.0 million, (ii) repayments of
borrowings from third parties of RMB2,432.3 million, and (iii) principal payments of finance leases of RMB32.9 million.
Net cash provided by financing activities was RMB41,357.4 million in 2020, primarily attributable to (i) proceeds from
issuance of ordinary shares, net of RMB34,607.1 million, (ii) capital injection from redeemable non-controlling interests holders of
RMB5,000.0 million, (iii) proceeds from issuance of convertible promissory note-third parties of RMB3,014.6 million, (iv) proceeds
from issuance of convertible promissory note-related parties of RMB90.5 million, (v) proceeds from borrowings from third parties of
RMB1,605.5 million, and (vi) proceeds from borrowings from related parties of RMB260.0 million, partially offset by (i) repurchase of
redeemable non-controlling interests of RMB2,071.5 million, (ii) repayments of borrowings from third parties of RMB964.8 million, and
(iii) repayments of borrowings from related parties of RMB285.8 million.
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Material Cash Requirements
Our material cash requirements as of December 31, 2022 and any subsequent interim period primarily include our capital
commitments, operating and financing lease obligations, short-term and long-term borrowings, convertible notes and asset-backed
securities and notes, as below:
Capital commitments
Operating lease obligations
Finance lease obligations
Short-term and long-term borrowings
Interest on borrowings
Convertible notes with principal and interest
Asset-backed securities and notes
Total
Total
Less than 1 year
1-3 years
3-5 years
More than 5 years
Payment due by period
5,349,049
11,663,262
72,331
4,577,990
69,809
10,437,397
1,423,541
33,593,379
3,978,540
1,878,905
35,151
4,147,530
58,015
77,406
1,129,596
11,305,143
(in RMB thousands)
1,355,750
2,639,711
24,016
402,860
10,593
1,217,644
293,945
5,944,519
13,115
1,876,408
11,014
22,080
1,075
9,142,347
—
11,066,039
1,644
5,268,238
2,150
5,520
126
—
—
5,277,678
Our capital commitments are commitments in relation to the purchase of property and equipment including leasehold
improvements.
Our operating and finance lease obligations consist of leases in relation to certain manufacturing plant, offices and buildings,
NIO Houses and other property for our sales and after-sales network.
Our short-term and long-term borrowings represent borrowings with maturity from eleven months to seven years.
Our convertible notes represent the 2024 Notes with outstanding principal amount of US$163.7 million as of December 31,
2022, the 2026 Notes with outstanding principal amount of US$557.1 million as of December 31, 2022 and the 2027 Notes with
outstanding principal amount of US$750.0 million as of December 31, 2022, which will mature in January 2024, January 2026 and
January 2027, respectively.
Our asset-backed securities and notes represent the proceeds from the issuance of debt securities and notes under asset-backed
securitization arrangements with the principal amount of RMB812 million, RMB847 million and RMB1,025 million as of December 31,
2022, which will be mature in September 2023, March 2024 and July 2024, respectively.
We intend to fund our existing and future material cash requirements with our existing cash balance. We will continue to make
cash commitments, including capital expenditures, to support the growth of our business.
Other than those shown above, we did not have any significant capital and other commitments, long-term obligations,
mortgages and charges or guarantees as of December 31, 2022. As of December 31, 2022, for the purpose of indebtedness, save as
disclosed in our consolidated financial statements included elsewhere in this annual report, we did not have significant contingent
liabilities. As of December 31, 2022, save as disclosed in this section, we did not have any significant bank overdrafts, loans and other
similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges hire purchase commitments or
other outstanding material contingent liabilities.
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Capital Expenditures
In 2020, 2021 and 2022, our capital expenditures were mainly used for the acquisition of property, plant and equipment and
intangible assets which consisted primarily of mold and tooling, IT equipment, research and development equipment, leasehold
improvements, consisting primarily of office space, NIO Houses and laboratory improvements as well as the roll-out of our power
solutions, and equity investments. We made capital expenditures of RMB1,378.5 million, RMB4,671.3 million and RMB7,251.9 million
(US$1,051.4 million) in 2020, 2021 and 2022, respectively. We expect our capital expenditures to continue to be significant in the
foreseeable future as we expand our business, and that our level of capital expenditures will be significantly affected by user demand for
our products and services. The fact that we have a limited operating history means we have limited historical data on the demand for our
products and services. As a result, our future capital requirements may be uncertain and actual capital requirements may be different
from those we currently anticipate. To the extent the proceeds of securities we have issued and cash flows from our business activities are
insufficient to fund future capital requirements, we may need to seek equity or debt financing. We will continue to make capital
expenditures to support the expected growth of our business.
Holding Company Structure
NIO Inc. is a holding company with no material operations of its own. We conduct our operations in China primarily through
our PRC subsidiaries, and, to a much lesser extent, the VIEs. As a result, our ability to pay dividends depends significantly upon
dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the
future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned
subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with
PRC accounting standards and regulations. Under PRC law, each of our subsidiaries and the VIEs and their subsidiaries in China is
required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds
reach 50% of its registered capital. In addition, each of our wholly foreign-owned subsidiaries in China may allocate a portion of its
after-tax profits based on PRC accounting standards to enterprise expansion funds, staff bonuses and welfare funds at its discretion, and
the VIEs may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at its
discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a
wholly foreign-owned company out of China is subject to examination by the banks designated by the SAFE. Our PRC subsidiaries have
not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory
reserve funds. The VIEs did not have any material assets or liabilities as of December 31, 2022. In the future we expect (i) Beijing NIO
to focus on value-added telecommunications services, including, without limitation, performing internet services as well as holding
certain related licenses; (ii) Anhui NIO AT to focus on autonomous driving services, including, without limitation, performing certain
services as well as holding certain related licenses; and (iii) Anhui NIO DT to focus on insurance brokerage services, including, without
limitation, performing insurance brokerage services as well as holding certain related licenses through its subsidiary.
Off-Balance Sheet Arrangements
Other than the guarantees provided to Battery Asset Company in relation to the BaaS model as described in Note 2(s) to our
consolidated financial statements included elsewhere in this annual report, we have not entered into any off-balance sheet financial
guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into
any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated
financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that
serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that
provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.
C.
Research and Development, Patents and Licenses, etc.
See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”
D.
Trend Information
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or
events for the period from January 1, 2022 to December 31, 2022 that are reasonably likely to have a material effect on our net revenues,
income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily
indicative of future operating results or financial conditions.
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E.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires our management to make
estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet
dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material
differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our
estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our
circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters
that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to
occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material
impact on our financial condition or results of operations. There are other items within our financial statements that require estimation
but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our
financial statements. For a detailed discussion of our significant accounting policies and related judgments, see Note 2 to our
consolidated financial statements included elsewhere in this annual report.
Warranty liabilities
We accrue a warranty reserve for all new vehicles sold by us, which includes our best estimate of the projected costs to repair or
replace items under warranties. These estimates are based on actual claims incurred to date and an estimate of the nature, frequency and
costs of future claims. These estimates are inherently uncertain given our relatively short history of sales, and changes to the historical or
projected warranty experience may cause material changes to the warranty reserve when we accumulate more actual data and experience
in the future.
The portion of the warranty reserve expected to be incurred within the next 12 months is included within accruals and other
liabilities, while the remaining balance is included within other non-current liabilities on the consolidated balance sheets. Warranty
expense is recorded as a component of cost of revenues in the consolidated statements of comprehensive loss.
When our assumptions relating to the estimates of the projected costs to repair or replace items under warranties
decreased/increased by 5% while holding all other assumptions constant, there would be no significant impact to our consolidated results
of operations.
Long-term investments
Our available-for-sale debt security investments are reported at estimated fair value with the aggregate unrealized gains and
losses, net of tax, reflected in accumulated other comprehensive loss in the consolidated balance sheets. Gain or losses are realized when
the investments are sold or when dividends are declared or payments are received or when other than temporarily impaired. As of
December 31, 2022, we valued these investments using a market approach by adopting a backsolve method, which benchmarked the fair
value of the investments to a recent financing transaction of these investees. Key assumptions include expected time to exit, expected
volatility and probability of each scenario.
When our assumptions related to the estimates of the fair value of the investment decreased/increased by 5% while holding all
other estimates constant, there would be no significant impact to our consolidated results of operations.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Executive Officers
The following table sets forth information regarding our executive officers and directors as of the date of this annual report.
Directors and Executive Officers
Bin Li
Lihong Qin
Feng Shen
Xin Zhou
Wei Feng
Ganesh V. Iyer
Hai Wu
Denny Ting Bun Lee
Yu Long
James Gordon Mitchell
Age
48
49
59
53
43
55
54
55
50
49
Position/Title
Chairman and Chief Executive Officer
Director and President
Executive Vice President
Executive Vice President
Chief Financial Officer
Chief Executive Officer of NIO U.S.
Independent Director
Independent Director
Independent Director
Director
Mr. Bin Li is our founder and has served as chairman of the board since our inception and our chief executive officer since
March 2018. Since July 2021, Mr. Li has served as a director of Uxin Limited (Nasdaq: UXIN), a leading e-commerce platform for
buying and selling used cars in China. In 2000, Mr. Li co-founded Beijing Bitauto E-Commerce Co., Ltd. and served as its director and
president until 2006. From 2010 to 2020, Mr. Li served as chairman of the board of directors at Bitauto Holdings Limited (previously
listed on NYSE with stock code BITA), a former NYSE-listed automobile service company and a leading automobile service provider in
China. In 2002, Mr. Li co-founded Beijing Creative & Interactive Digital Technology Co., Ltd. as the chairman of the board of directors
and had served as its president and director. Mr. Li received his bachelor’s degree in sociology from Peking University.
Mr. Lihong Qin is our co-founder and has served as our director and our president since our inception. Prior to joining us, Mr.
Qin served as chief marketing officer and executive director at Longfor Properties Co., Ltd. (HKEX: 960), a leading company involved
in property development and investment in China, from 2008 to 2014. He also served as deputy general manager at Anhui Chery
Automobile Sales and Service Company from 2005 to 2008, as senior consultant and project manager at Roland Berger Strategy
Consultants from 2003 to 2005. Mr. Qin received his bachelor’s degree and a master’s degree in law from Peking University in 1996 and
1999, respectively, and a master’s degree in public policy from Harvard University in 2001.
Mr. Feng Shen joined our company in December 2017, and currently serves as our executive vice president and chairman of
quality management committee. Mr. Shen worked in several senior executive management roles, such as president of Polestar China and
global chief technology officer at Polestar, president at Volvo Cars China R&D Company, vice president of Volvo Cars Asia-Pacific
Operation, and chairman at China-Sweden Traffic Safety Research Center from 2010 to 2017. Prior to that, Mr. Shen served in various
roles, including powertrain manager and six-sigma quality management master, at Ford Motor Company (NYSE: F) from 1999 to 2010
in the United States and China. Mr. Shen received a bachelor’s degree in mathematics and mechanics and a master’s degree in applied
mechanics from Fudan University in 1984 and 1987, respectively. He also received a doctoral degree in mechanical engineering from
Auburn University in 1996.
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Mr. Xin Zhou joined our company in April 2015. He has served as the chairman of product committee since 2017, and currently
serves as our executive vice president. Prior to joining our company, Mr. Zhou served as executive director at Qoros Automotive Co.,
Ltd. from September 2009 to April 2015. Prior to that, he was the engagement manager of McKinsey & Co. from April 2007 to August
2009, and executive director of Lear Corp. (NYSE: LEA) from May 1998 to April 2007. From 1995 to 1998, Mr. Zhou worked at
General Motors China Inc. Mr. Zhou received a bachelor’s degree in applied science from Fudan University in 1992 and a master’s
degree in business administration from China Europe International Business School in 2008.
Mr. Wei Feng has served as our Chief Financial Officer since November 2019. Prior to joining our company, Mr. Feng served as
managing director and head of the auto and auto parts research team at China International Capital Corporation. Prior to that, Mr. Feng
served as an industry analyst at Everbright Securities Co. Ltd. from 2010 to 2013. Mr. Feng’s career also includes more than five years’
working experience within the ZF (China) Investment Co., Ltd. where he participated in numerous corporate matters. Mr. Feng received
his bachelor’s degree in Engineering from the Department of Automotive Engineering at Tsinghua University, and his joint master’s
degree in Automotive System Engineering from RWTH Aachen University in Germany and Tsinghua University in China.
Mr. Ganesh V. Iyer joined our company in April 2016. He has served as the chief executive officer of NIO U.S. since December
2018. Mr. Iyer has over 32 years of experience delivering results in various industries including autonomous technology, hi-tech,
manufacturing, and telecom. Mr. Iyer worked as vice president of Information Technology at Tesla Inc. (Nasdaq: TSLA) until 2016. Prior
to Tesla, where he served as vice president of Information Technology, Mr. Iyer joined VMWare (NYSE: VMW) in 2010 and held senior
information technology leadership roles at VMWare. Prior to VMWare, Mr. Iyer served as director of information technology at Juniper
Networks (NYSE: JNPR) and WebEx and worked in consulting primarily at Electronic Data Systems. Mr. Iyer received a bachelor’s
degree in chemical engineering from the University of Calicut in India.
Mr. Hai Wu has served as our director since July 2016. Mr. Wu has served as a managing partner of Cenova Capital since May
2019. He has extensive experience in investments and management. Prior to Cenova Capital, Mr. Wu served as an executive director of
China at Temasek Holdings Advisors (Beijing) Co., Ltd. since April 2014. Prior to that, Mr. Wu was the chief executive officer at
Ramaxel Technology (Shenzhen) Limited from April 2012 to February 2014 and a managing director at CITIC Private Equity Funds
Management Co., Ltd. from March 2010 to May 2012. Prior to that, Mr. Wu had served at Beijing Branch office of McKinsey &
Company for more than ten years and was appointed as the global director and managing partner until February 2010. He also served as
a non-executive director of COFCO Meat Holdings Limited (HKEX: 1610) from September 2015 to December 2017. He received a
bachelor’s degree in physiology from Peking University, a master’s degree in business administration from the Johnson School of
Management, Cornell University and a doctoral degree in biomedical science from Rutgers University.
Mr. Denny Ting Bun Lee has served as our independent director since September 2018. Mr. Lee currently serves as chairman of
the audit committees and independent non-executive director of the boards of New Oriental Education & Technology Group Inc. (NYSE:
EDU) and Jianpu Technology Inc. (NYSE: JT), which are listed on the New York Stock Exchange. From April 2002 to June 2022, Mr.
Lee served as a director of NetEase, Inc., formerly known as NetEase.com, Inc., which is listed on the Nasdaq Global Select Market
(Nasdaq: NTES) and the Hong Kong Stock Exchange (HKEX: 9999). He was the chief financial officer of NetEase.com, Inc. from April
2002 to June 2007 and its financial controller from November 2001 to April 2002. Prior to joining NetEase.com, Mr. Lee worked in the
Hong Kong office of KPMG for more than ten years. In addition, from August 2013 to June 2022, Mr. Lee served as independent non-
executive director on the board of China Metal Resources Utilization Ltd. (HKEX: 1636), which is listed on the main board of the Hong
Kong Stock Exchange. Mr. Lee graduated from the Hong Kong Polytechnic University majoring in accounting and is a member of the
Hong Kong Institute of Certified Public Accountants and The Chartered Association of Certified Accountants.
Ms. Yu Long has served as our director since July 2021. Ms. Long currently serves as the Founding and Managing Partner of
BAI Capital. She also serves as a member of Bertelsmann Group Management Committee and the governor of China Venture Capital and
Private Equity Association. Formerly, Ms. Long was the chief executive officer of Bertelsmann China Corporate Center and the
managing partner of Bertelsmann Asia Investments. Prior to that, she was a Principal at Bertelsmann Digital Media Investments. She
joined the international media, services, and education company via the Bertelsmann Entrepreneurs Program in 2005. Ms. Long is a
member of the World Economic Forum’s Young Global Leaders Advisory Council and its Global Agenda Council on the Future of
Media, Entertainment & Information and was a member of the Stanford Graduate School of Business Advisory Council from May 2015
to May 2021. Ms. Long serves as an independent director on the board of directors of Tapestry Inc. (NYSE: TPR, its portfolio includes
Coach, Stuart Weitzman and Kate Spade), LexinFintech Holdings Ltd. (Nasdaq: LX), and the Hongkong and Shanghai Banking
Corporation Limited. Ms. Long received a bachelor’s degree in electrical engineering from University of Electronic Science and
Technology in China and an MBA from Stanford Graduate School of Business.
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Mr. James Gordon Mitchell has served as our director since September 2018. Currently, Mr. Mitchell serves as Senior Executive
Vice President and Chief Strategy Officer of Tencent Holdings (HKEX: 700), where he has worked since July 2011. Mr. Mitchell has
also served as the Chairman and Non-Executive director of the board of China Literature Limited (HKEX: 772) since October 2017. He
has also served as Non-Executive director of Yixin Group Limited (HKEX: 2858) from June 2017 to June 2020. He is a director of
certain other listed companies including Frontier Developments Plc (AIM: FDEV), Tencent Music Entertainment Group (NYSE: TME
and also listed on the Hong Kong Stock Exchange under the stock code: 01698), Universal Music Group (EURONEXT: UMG) and of
several unlisted companies. Prior to joining Tencent, Mr. Mitchell was a managing director at Goldman Sachs. He is a CFA®
Charterholder and received a degree from Oxford University.
B. Compensation
For the year ended December 31, 2022, we paid an aggregate of approximately US$2.7 million in cash to our directors and
executive officers. For share incentive grants to our directors and executive officers, see “—Stock Incentive Plans.” We have not set
aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our PRC
subsidiaries and VIEs are required by law to make contributions equal to certain percentages of each employee’s salary for his or her
pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
Employment Agreements and Indemnification Agreements
We have entered into employment agreements with each of our executive officers. Under these agreements, each of our
executive officers is employed for a specified time period. For the executive officers who joined our company prior to September 2018,
we may terminate employment for cause, at any time, without advance notice or remuneration, for certain acts of such executive officer,
such as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or
misconduct or a failure to perform agreed duties. In such case of termination by us, we will provide severance payments to the executive
officer as expressly required by applicable law of the jurisdiction where the executive officer is based.
Each executive officer has agreed to hold, both during and after the termination or expiry of the executive officer’s employment
agreement, in strict confidence and not to use, except as required in the performance of the executive officer’s duties in connection with
the executive officer’s employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential
information or trade secrets of our clients or prospective clients, or the confidential or proprietary information of any third party received
by us and for which we have confidential obligations. The executive officers have also agreed to disclose in confidence to us all
inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer’s employment with
us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights
for these inventions, designs and trade secrets.
In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term
of the executive officer’s employment and typically for one year following the last date of employment. Specifically, each executive
officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive
officer in the executive officer’s capacity as a representative of us for the purpose of doing business with such persons or entities that will
harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our
competitors, or engage, whether as principal, partner, licensor or otherwise, with any of our competitors, without our express consent; or
(iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive
officer’s termination, or in the year preceding such termination, without our express consent.
We have also entered into indemnification agreements with each of our directors and each of our executive officers who joined
our company prior to September 2018. Under these agreements, we agree to indemnify our directors and executive officers against
certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of
our company.
Stock Incentive Plans
Our board of directors has approved and adopted share-based awards under four stock incentive plans, namely, the 2015 Stock
Incentive Plan, or the 2015 Plan, the 2016 Stock Incentive Plan, or the 2016 Plan, the 2017 Stock Incentive Plan, or the 2017 Plan, and
the 2018 Stock Incentive Plan, or the 2018 Plan. The terms of the 2015 Plan, the 2016 Plan and the 2017 Plan are substantially similar.
The purpose of our stock incentive plans is to attract and retain the best available personnel, to provide additional incentives to our
employees, directors and consultants and to promote the success of our business. Our board of directors believes that our long-term
success is dependent upon our ability to attract and retain superior individuals who, by virtue of their ability and qualifications, make
important contributions to our business.
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Under the 2015 Plan, the 2016 Plan and the 2017 Plan, the maximum numbers of Class A ordinary shares which may be issued
pursuant to all awards are 46,264,378, 18,000,000 and 33,000,000, respectively. Under the 2018 Plan, the maximum number of shares
available for issuance pursuant to all awards was initially 23,000,000 Class A ordinary shares, which amount will automatically increase
each year by the number of shares representing 1.5% of the then total issued and outstanding share capital of our company as of the end
of each preceding year. As of December 31, 2022, awards to purchase an aggregate amount of 115,936,986 Class A ordinary shares
under our stock incentive plans have been granted and are outstanding, excluding awards that were forfeited or cancelled after the
relevant grant dates.
The following paragraphs describe the principal terms of the 2015 Plan, the 2016 Plan and the 2017 Plan.
Types of Awards. Our stock incentive plans permit the awards of options, restricted shares, restricted share units, share
appreciation rights, dividend equivalent right or other right or benefit under each plan.
Plan Administration. Our board of directors or a committee of one or more members of the board of directors or officers will
administer our stock incentive plans. The committee or the full board of directors, as applicable, will determine the grantees to receive
awards, the type and number of awards to be granted to each grantee, and the terms and conditions of each award grant.
Award Agreement. Awards granted under our stock incentive plans are evidenced by an award agreement that sets forth terms,
conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the
grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend the award.
Eligibility. We may grant awards to our employees, consultants and directors.
Vesting Schedule. Except as approved by the plan administrator, options to be issued to the grantees under the stock incentive
plans shall be subject to a minimum four (4) year vesting schedule calling for vesting no earlier than the following, counting from the
applicable grant date or vesting commencement date (as determined by the plan administrator) with respect to the total issued options:
the option representing 25% of the Class A ordinary shares under the option shall vest at the end of the first twelve (12) months
commencing from the vesting commencement date, with remaining portions vesting in equal monthly installments over the next thirty-
six (36) months.
Exercise of Options. The plan administrator determines the exercise price for each award, which is stated in the relevant award
agreement. Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator
determines at the time of grant. However, in the case of an option granted to an employee who, at the time the option is granted, owns
(or, pursuant to Section 424(d) of the U.S. Code, is deemed to own) stock representing more than 10% of the total combined voting
power of all classes of shares of us or our subsidiary or affiliate, the term of the option will not be longer than seven to ten years from the
date of grant under the 2017 Plan, or five years from the date of grant under the 2015 Plan and the 2016 Plan.
Transfer Restrictions. Awards shall be transferable, subject to applicable laws, (i) by will and by the laws of descent and
distribution and (ii) during the lifetime of the grantee, to the extent and in the manner authorized by the plan administrator.
Notwithstanding the foregoing, the grantee may designate one or more beneficiaries of the grantee’s award in the event of the grantee’s
death on a beneficiary designation form provided by the plan administrator.
Termination and Amendment of the Plan. Unless terminated earlier or extended before expiration, each of our stock incentive
plans has a term of ten years. The board of directors has the authority to terminate, amend or modify the stock incentive plans; provided,
however, that no such amendment shall be made without the approval of our shareholders to the extent such approval is required by
applicable laws or provisions of the stock incentive plans. However, without the prior written consent of the grantee, no such action may
adversely affect any outstanding award previously granted pursuant to the stock incentive plan.
The following paragraphs describe the principal terms of the 2018 Plan.
Types of Awards. The 2018 Plan permits the awards of options, restricted shares or any other type of awards that the committee
grants.
Plan Administration. Our board of directors or a committee of one or more members of our board of directors will administer
the 2018 Plan. The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and
number of awards to be granted to each participant, and the terms and conditions of each award grant.
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Award Agreement. Awards granted under the 2018 Plan are evidenced by an award agreement that sets forth terms, conditions
and limitations for each award, which may include the term of the award, the provisions applicable in the event that the grantee’s
employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
Eligibility. We may grant awards to the employees, directors and consultants of our company. However, we may grant incentive
share options only to our employees, parent and subsidiaries.
Vesting Schedule. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award
agreement.
Exercise of Options. The plan administrator determines the exercise price for each award, which is stated in the award
agreement. The vested portion of an option will expire if not exercised prior to the time as the plan administrator determines at the time
of its grant. However, the maximum exercisable term is five years from the date of a grant.
Transfer Restrictions. Awards may not be transferred in any manner by the recipient other than by will or the laws of descent
and distribution, except as otherwise provided by the plan administrator.
Termination and amendment of the 2018 Plan. Unless terminated earlier, the 2018 Plan has a term of five years from January
1, 2019. Our board of directors has the authority to amend or terminate the plan. However, no such action may adversely affect in any
material way any awards previously granted unless agreed by the recipient.
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The following table summarizes, as of December 31, 2022, the awards granted under the 2015 Plan, the 2016 Plan, the 2017
Plan and 2018 Plan to several of our executive officers, excluding awards that were forfeited or cancelled after the relevant grant dates.
Name
Bin Li
Lihong Qin
Xin Zhou
Denny Ting Bun Lee
Hai Wu
Feng Shen
Wei Feng
Ganesh V Iyer
Yu Long
Total
Class A Ordinary
Shares Underlying
Options and
Restricted Share
Units
15,000,000
*
*
*
*
*
*
*
*
25,719,608
Exercise Price
(US$/Share**)
September 25, 2019
February 28, 2018
February 1, 2018
Date of Grant
2.55 March 1, 2018
N/A March 5, 2020
2.39 April 2, 2020
2.55
2.55
N/A March 5, 2020
2.05
2.39 April 2, 2020
2.55
2.55
N/A March 5, 2020
N/A September 12, 2018
N/A August 13, 2020
N/A September 12, 2020
3.61 May 29, 2019
N/A June 10, 2021
1.8 December 31, 2017
September 25, 2019
February 28, 2018
February 1, 2018
Date of Expiration
February 29, 2028
April 1, 2030
February 27, 2028
January 31, 2028
September 24, 2026
April 1, 2030
February 27, 2028
January 31, 2028
May 29, 2026
2.05
2.39 April 2, 2020
2.55
N/A March 5, 2020
1.8 November 18, 2019 November 17, 2026
December 30, 2027
September 24, 2026
April 1, 2030
January 31, 2028
February 1, 2018
2.39 April 2, 2020
3.98 May 29, 2020
N/A March 5, 2020
2.05
0.27
2.55 March 1, 2018
2.39 April 2, 2020
N/A July 12, 2021
September 25, 2019
May 3, 2016
April 1, 2030
May 28, 2027
September 24, 2026
May 2, 2026
February 29, 2028
April 1, 2030
* Less than one percent of our total outstanding shares.
As of December 31, 2022, non-executive officers and other grantees as a group held awards of options to purchase 91,746,286
Class A ordinary shares of our company. The exercise prices of the options outstanding as of December 31, 2022 ranged from US$0 to
US$48.45 per share. Our company identified that the total number of the Class A ordinary shares underlying the outstanding options as
of December 31, 2021 and the exercise prices of such options were inaccurately disclosed in the annual report for the year ended
December 31, 2021 due to an inadvertent clerical mistake. The accurate number of the underlying Class A ordinary shares should have
been 70,190,387, and the accurate exercise prices range should have been from US$0 to US$48.45 per share.
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C. Board Practices
Board of Directors
The board of directors of our company, or the board, consists of six directors. A director is not required to hold any shares in our
company by way of qualification. A director may vote with respect to any contract, proposed contract or arrangement in which he is
interested provided (a) such director has declared the nature of his interest at the earliest meeting of the board at which it is practicable
for him to do so, either specifically or by way of a general notice and (b) if such contract or arrangement is a transaction with a related
party, such transaction has been approved by the audit committee. The directors may exercise all the powers of our company to borrow
money, mortgage our company’s undertaking, property and uncalled capital, and issue debentures or other securities whenever money is
borrowed or as security for any obligation of our company or of any third party. None of our non-executive directors has a service
contract with us that provides for benefits upon termination of service.
Committees of the Board of Directors
We have established three committees under the board: an audit committee, a compensation committee and a nominating and
ESG committee. We have adopted a charter (as amended from time to time) for each of the three committees. Each committee’s members
and functions are described below.
Audit Committee. Our audit committee consists of Denny Ting Bun Lee, Hai Wu and Yu Long. Denny Ting Bun Lee is the
chairman of our audit committee. We have determined that Denny Ting Bun Lee, Hai Wu and Yu Long satisfy the “independence”
requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange and Rule 10A-3 under the Exchange
Act. We have determined that Denny Ting Bun Lee qualifies as an “audit committee financial expert.” The audit committee oversees our
accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is
responsible for, among other things:
● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by
the independent auditors;
● reviewing with the independent auditors any audit problems or difficulties and management’s response;
● discussing the annual audited financial statements with management and the independent auditors;
● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps
taken to monitor and control major financial risk exposures;
● reviewing and approving all proposed related party transactions;
● meeting separately and periodically with management and the independent auditors; and
● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness
of our procedures to ensure proper compliance.
Compensation Committee. Our compensation committee consists of Hai Wu, Denny Ting Bun Lee and Bin Li. Hai Wu is the
chairman of our compensation committee. We have determined that Hai Wu and Denny Ting Bun Lee satisfies the “independence”
requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. The compensation committee
assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors
and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is
deliberated. The compensation committee is responsible for, among other things:
● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer
and other executive officers;
● reviewing and recommending to the board for determination with respect to the compensation of our non-employee
directors;
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● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and
● selecting any compensation consultant, legal counsel or other adviser only after taking into consideration all factors
relevant to that person’s independence from management.
Nominating and ESG Committee. Our nominating and ESG committee consists of Yu Long, Hai Wu and Denny Ting Bun Lee.
Yu Long is the chairperson of our nominating and ESG committee. Hai Wu, Denny Ting Bun Lee and Yu Long satisfy the
“independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. The nominating
and ESG committee assists the board in selecting individuals qualified to become our directors and in determining the composition of the
board and its committees. The nominating and ESG committee is responsible for, among other things:
● selecting and recommending to the board nominees for election by the shareholders or appointment by the board;
● reviewing annually with the board the current composition of the board with regards to characteristics such as
independence, knowledge, skills, experience and diversity;
● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the
committees of the board;
● advising the board periodically with regard to significant developments in the law and practice of corporate governance as
well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of
corporate governance and on any remedial action to be taken;
● providing advice on ESG matters to management, and discussing with management and approving, or recommending to
the board for approval, our company’s initiatives, objectives, strategies and targets for ESG matters; and
● reviewing and monitoring our company’s progress toward achieving approved ESG objectives and targets.
Duties of Directors
Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty to act honestly, and a duty to act
in good faith. The directors must act bona fide in what they consider to be in our best interests. Our directors must also exercise their
powers only for a proper purpose. Our directors also have a duty to act with skills they actually possess and exercise the care and
diligence that would be displayed by a reasonable director in comparable circumstances. It was previously considered that a director need
not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge
and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill
and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must
ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights
vested thereunder in the holders of the shares. Our directors owe their fiduciary duties to our company and not to our company’s
individual shareholders, and it is our company which has the right to seek damages if a duty owed by our directors is breached. In certain
limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is
breached.
Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs. The
functions and powers of our board of directors include, among others:
● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such
meetings;
● declaring dividends and other distributions;
● appointing officers and determining the term of office of the officers;
● exercising the borrowing powers of our company and mortgaging the property of our company; and
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● approving the transfer of shares in our company, including the registration of such shares in our share register.
Terms of Directors and Officers
Our directors are not subject to a term of office (unless there is any written agreement between our company and such director)
and hold office until such time as they are removed from office by ordinary resolution of the shareholders or by the board pursuant to our
thirteenth amended and restated memorandum and articles of association. The office of a director shall be vacated if, among other things,
the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) resigns his office by notice in writing
to our company; or (iii) dies or is found to be or becomes of unsound mind. In addition, for so long as our Class A ordinary shares are
listed on the Hong Kong Stock Exchange, our independent directors are subject to retirement by rotation at least once every three years
and eligible for re-election at our annual general meeting.
Our officers are elected by and serve at the discretion of the board of directors, and may be removed by our board of directors.
D. Employees
As of December 31, 2022, we had 26,763 full-time employees. The following table sets forth the numbers of our employees
categorized by function and region as of December 31, 2022.
User experience (sales and marketing and service)
Product and software development
Manufacturing
General administration
Total number of employees
As of December 31, 2022
11,983
10,025
2,800
1,955
26,763
Our employees have set up a labor union in China according to the related Chinese labor law. To date, we have not experienced
any labor strike, and we consider our relationship with our employees to be good.
We provide competitive level of salary and other employee benefits to our employees. Every employee beneficially owns shares
in our company. We provide employees with a wide range of benefits, including but not limited to employees’ commercial insurance,
physical examinations, vocational training and holiday benefits. We aim to create a warm, safe and secure working environment for
everyone.
E. Share Ownership
Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary
shares as of February 28, 2023 with respect to:
● each of our directors and executive officers; and
● each person known to us to own beneficially more than 5% of our ordinary shares.
The calculations in the table below are based on 1,687,741,811 ordinary shares outstanding as of February 28, 2023, comprising
of 1,539,241,811 Class A ordinary shares (excluding 31,363,869 Class A ordinary shares issued and reserved for future issuance upon
the exercising or vesting of awards granted under our stock incentive plans) and 148,500,000 Class C ordinary shares.
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Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to
acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security.
These shares, however, are not included in the computation of the percentage ownership of any other person.
Directors and Executive Officers**:
Bin Li(1)
Lihong Qin
Feng Shen
Xin Zhou
Wei Feng
Ganesh V. Iyer(2)
Hai Wu(3)
Denny Ting Bun Lee(4)
Yu Long(5)
James Gordon Mitchell(6)
All Directors and Executive Officers as a Group
Principal Shareholders:
Founder vehicles(7)
Tencent entities(8)
Baillie Gifford & Co(9)
* Less than 1% of our total outstanding shares.
Class A
ordinary
shares
beneficially
owned
Class C
ordinary
shares
beneficially
owned
Total
ordinary
shares
beneficially
owned
% of
beneficial
ownership
% of
aggregate
voting
power†
30,467,776
*
*
*
*
*
*
*
—
—
54,355,588
148,500,000
—
—
—
—
—
—
—
—
—
148,500,000
178,967,776
*
*
*
*
*
*
*
—
—
202,855,588
16,967,776
164,249,629
121,349,694
148,500,000
165,467,776
— 164,249,629
— 121,349,694
10.5
*
*
*
*
*
*
*
—
—
11.9
9.8
9.7
7.2
44.2
*
—
*
—
*
—
—
—
—
44.8
44.2
5.9
4.4
** Except where otherwise disclosed in the footnotes below, the business address of all the directors and executive officers is Building
16, 20 and 22, No. 56 AnTuo Road, Anting Town, Jiading District, Shanghai 201804, People’s Republic of China.
† For each person and group included in this column, percentage of voting power is calculated by dividing the voting power
beneficially owned by such person or group by the voting power of all of our Class A and Class C ordinary shares as a single class.
Each holder of our Class A ordinary shares is entitled to one vote per share and each holder of our Class C ordinary shares is entitled
to eight votes per share on all matters submitted to them for a vote. Our Class A ordinary shares and Class C ordinary shares vote
together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law.
(1) Represents (i) 13,500,000 Class A ordinary shares issuable to Mr. Bin Li upon exercise of options within 60 days of February 28,
2023, (ii) 89,013,451 Class C ordinary shares held by Originalwish Limited, a British Virgin Islands company wholly owned by Mr.
Bin Li, (iii) 26,454,325 Class C ordinary shares held by mobike Global Ltd., a British Virgin Islands company wholly owned by Mr.
Bin Li, and (iv)16,967,776 Class A ordinary shares and 33,032,224 Class C ordinary shares held by NIO Users Limited, a holding
company controlled by NIO Users Trust, which is under the control of Mr. Bin Li, among which 14,967,776 Class A ordinary shares
and 33,032,224 Class C ordinary shares were held on record by NIO Users Limited and 2,000,000 Class A ordinary shares were held
on record by NIO Users Community Limited, a British Virgin Islands company wholly owned by NIO Users Limited.
(2) The business address of Mr. Iyer is 3200 North First Street, San Jose, CA 95134.
(3) The business address of Mr. Wu is No. 53, Gaoyou Road, Xuhui District, Shanghai, People’s Republic of China.
(4) The business address of Mr. Lee is No. 4 Dianthus Road, Yau Yat Chuen, Kowloon, Hong Kong.
(5) The business address of Ms. Long is Unit 1610, 16th Floor, West Tower, Genesis Beijing, 8 Xinyuan South Road, Chaoyang District,
Beijing 100027, People’s Republic of China.
(6) The business address of Mr. Mitchell is Level 29, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong.
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(7) Represents (i) 89,013,451 Class C ordinary shares held by Originalwish Limited, a British Virgin Islands company wholly owned by
Mr. Bin Li, (ii) 26,454,325 Class C ordinary shares held by mobike Global Ltd., a British Virgin Islands company wholly owned by
Mr. Bin Li, and (iii) 16,967,776 Class A ordinary shares and 33,032,224 Class C ordinary shares held by NIO Users Limited, a
holding company controlled by NIO Users Trust, which is under the control of Mr. Bin Li, among which ordinary shares 14,967,776
Class A ordinary shares and 33,032,224 Class C ordinary shares were held on record by NIO Users Limited and 2,000,000 Class A
ordinary shares were held on record by NIO Users Community Limited, a British Virgin Islands company wholly owned by NIO
Users Limited. The registered address of Originalwish Limited and mobike Global Ltd. is Sertus Chambers, P.O. Box 905, Quastisky
Building, Road Town, Tortola, British Virgin Islands. The registered address of NIO Users Limited is Maples Corporate Services
(BVI) Limited, Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands.
(8) Based on the statement on Schedule 13D/A filed on March 4, 2021 jointly by (i) Tencent Holdings Limited, (ii) Image Frame
Investment (HK) Limited, (iii) Mount Putuo Investment Limited, and (iv) Huang River Investment Limited, pursuant to which, prior
to the listing of our Class A ordinary shares on the Hong Kong Stock Exchange and as of March 4, 2021, Mount Putuo Investment
Limited held 40,905,125 Class B ordinary shares, Image Frame Investment (HK) Limited held 87,388,807 Class B ordinary shares, a
wholly-owned subsidiary of Tencent Holdings Limited held 146,578 Class A ordinary shares, and Huang River Investment Limited
beneficially owned 35,809,119 Class A ordinary shares. Mount Putuo Investment Limited, Image Frame Investment (HK) Limited,
Huang River Investment Limited and Tencent Holdings Limited are collectively referred to in this annual report as the Tencent
entities. Mount Putuo Investment Limited and Huang River Investment Limited are companies incorporated in the British Virgin
Islands, and Image Frame Investment (HK) Limited is a company incorporated in Hong Kong. Each of Image Frame Investment
(HK) Limited, Mount Putuo Investment Limited and Huang River Investment Limited is beneficially owned and controlled by
Tencent Holdings Limited, a Cayman Islands company. The registered office of Huang River Investment Limited is Vistra Corporate
Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. The registered address of Image Frame
Investment (HK) Limited is 29/F Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. The registered address of
Mount Putuo Investment Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. The
principal business address of Tencent Holdings Limited is Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong
Kong. All of the Class B ordinary shares held by Tencent entities have been converted to Class A ordinary shares upon the listing of
our Class A ordinary shares on the Hong Kong Stock Exchange pursuant to the conversion notice delivered by the affiliates of
Tencent Holdings Limited, namely, Image Frame Invest (HK) Limited and Mount Putuo Investment Limited.
(9) Based on the statement on Schedule 13G/A filed on January 23, 2023 by Baillie Gifford & Co., Baillie Gifford & Co. and/or one or
more of its investment adviser subsidiaries beneficially own 121,059,075 ADSs representing 121,059,075 Class A ordinary shares,
and 290,619 Class A ordinary shares. The registered address of Baillie Gifford & Co. is Calton Square, 1 Greenside Row, Edinburgh
EH1 3AN, Scotland, UK.
To our knowledge, as of February 28, 2023, 372,643,287 of our Class A ordinary shares were held by one record holder in the
United States, which was Deutsche Bank Trust Company Americas, the depositary of our ADS program. The number of beneficial
owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the
United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
Currently, our ordinary shares consist of Class A ordinary shares and Class C ordinary shares. Holders of Class A ordinary
shares are entitled to one vote per share, and holders of Class C ordinary shares are entitled to eight votes per share. We issued Class A
ordinary shares represented by our ADSs in our initial public offering in September 2018. Holders of our Class C ordinary shares may
choose to convert their respective Class C ordinary shares into the same number of Class A ordinary shares at any time. Class A ordinary
shares are not convertible into Class C ordinary shares under any circumstance. See “Item 10. Additional Information—B. Memorandum
and Articles of Association” for a more detailed description of our ordinary shares.
F. Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
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B. Related Party Transactions
Contractual Arrangements with The VIEs and Their Shareholders
See “Item 4. Information on the Company—C. Organizational Structure.”
Shareholders Agreement and Registration Rights
We entered into a shareholders agreement and a right of first refusal and co-sale agreement on November 10, 2017 with our
shareholders, which consist of holders of ordinary shares and preferred shares.
The shareholders agreement and right of first refusal and co-sale agreement (i) provide for certain special rights, including right
of first refusal, co-sale rights and preemptive rights and (ii) contain provisions governing board of directors and other corporate
governance matters. Those special rights, as well as the corporate governance provisions, automatically terminated upon the closing of
the initial public offering of our ADSs on September 12, 2018.
Pursuant to our shareholders agreement dated November 10, 2017, we have granted certain registration rights to our
shareholders. Set forth below is a description of the registration rights granted under the agreement.
Demand Registration Rights. Holders holding 10% or more of the voting power of the then outstanding registrable securities
held by all holders are entitled to request in writing that we effect a registration statement for any or all of the registrable securities of the
initiating holders. We have the right to defer filing of a registration statement for a period of not more than 90 days if our board of
directors determines in good faith judgment that filing of a registration statement in the near future will be materially detrimental to us or
our shareholders, but we cannot exercise the deferral right on any one occasion or more than once during any twelve-month period and
cannot register any other securities during such period. We are not obligated to effect more than two demand registrations. Further, if the
registrable securities are offered by means of an underwritten offering, and the managing underwriter advises us that marketing factors
require a limitation of the number of securities to be underwritten, the underwriters may decide to exclude up to 75% of the registrable
securities requested to be registered but only after first excluding all other equity securities from the registration and underwritten
offering, provided that the number of shares to be included in the registration on behalf of the non-excluded holders is allocated among
all holders in proportion to the respective amounts of registrable securities requested by such holders to be included.
Registration on Form F-3 or Form S-3. Any holder is entitled to request us to file a registration statement on Form F-3 or
Form S-3 if we qualify for registration on Form F-3 or Form S-3. The holders are entitled to an unlimited number of registrations on
Form F-3 or Form S-3 so long as such registration offerings are in excess of US$5.0 million. We have the right to defer filing of a
registration statement for a period of not more than 60 days if our board of directors determines in good faith judgment that filing of a
registration statement in the near future will be materially detrimental to us or our shareholders, but we cannot exercise the deferral right
on any one occasion or more than once during any twelve-month period and cannot register any other securities during such period.
Piggyback Registration Rights. If we propose to register for our own account any of our equity securities, or for the account of
any holder, other than current shareholders, of such equity securities, in connection with the public offering, we shall offer holders of our
registrable securities an opportunity to be included in such registration. If the underwriters advise in writing that market factors require a
limitation of the number of registrable securities to be underwritten, the underwriters may exclude up to 75% of the registrable securities
requested to be registered but only after first excluding all other equity securities (except for securities sold for the account of our
company) from the registration and underwriting, provided that the number of shares to be included in the registration on behalf of the
non-excluded holders is allocated among all holders in proportion to the respective amounts of registrable securities requested by such
holders to be included.
Expenses of Registration. We will bear all registration expenses, other than the underwriting discounts and selling commissions
applicable to the sale of registrable securities, incurred in connection with registrations, filings or qualification pursuant to the
shareholders agreement.
Termination of Obligations. We have no obligation to effect any demand, piggyback, Form F-3 or Form S-3 registration upon
the earlier of (i) the tenth anniversary from the date of closing of a Qualified IPO as defined in the shareholders agreement, and (ii) with
respect to any holder, the date on which such holder may sell without registration, all of such holder’s registrable securities under
Rule 144 of the Securities Act in any 90-day period.
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Employment Agreements and Indemnification Agreements
See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment Agreements and Indemnification
Agreements.”
Share Option Grants
See “Item 6. Directors, Senior Management and Employees—B. Compensation—Stock Incentive Plans.”
Other Transactions with Related Parties
In February 2019, we issued US$750 million aggregate principal amount of 4.50% convertible senior notes due 2024, or the
2024 Notes. The 2024 Notes are unsecured debt and are not redeemable by us prior to the maturity date except for certain changes in tax
law. The holders of the 2024 Notes may convert their notes to a number of our ADSs at their option at any time prior to the close of
business on the second business day immediately preceding the maturity date pursuant to the 2024 Notes indenture. The 2024 Notes that
are converted in connection with a make-whole fundamental change (as defined in the 2024 Notes Indenture) may be entitled to an
increase in the conversion rate for such 2024 Notes. Huang River Investment Limited subscribed for US$30 million aggregate principal
amount of the 2024 Notes. As of December 2022, the amount of interest payable to Huang River Investment Limited for the 2024 Notes
was US$0.6 million.
In September 2019, we issued US$200 million principal amount of convertible notes to Huang River Investment Limited, to an
affiliate of Tencent Holdings Limited, and Mr. Bin Li, our chairman of the board of directors and chief executive officer, collectively the
Affiliate Notes. Huang River Investment Limited and Mr. Bin Li each subscribed for US$100 million principal amount of the Affiliate
Notes, each in two equally split tranches. The Affiliate Notes issued in the first tranche will mature in 360 days, bear no interest, and
require us to pay a premium at 2% of the principal amount at maturity. The Affiliate Notes issued in the second tranche will mature in
three years, bear no interest, and require us to pay a premium at 6% of the principal amount at maturity. The 360-day Affiliate Notes will
be convertible into our Class A ordinary shares (or ADSs) at a conversion price of US$2.98 per ADS at the holder’s option from the 15th
day immediately prior to maturity, and the three-year Affiliate Notes will be convertible into our Class A ordinary shares (or ADSs) at a
conversion price of US$3.12 per ADS at the holder’s option from the first anniversary of the issuance date. As of December 31, 2022,
the 360-day and the three-year Affiliate Notes issued to each of an affiliate of Tencent Holdings Limited and Mr. Bin Li have been
converted to Class A ordinary shares.
In 2020, 2021 and 2022, we provided sales of goods to our affiliates, including Wuhan Weineng Battery Assets Co., Ltd.,
Beijing Bit Ep Information Technology Co., Ltd., Beijing Yiche Interactive Advertising Co., Ltd., Beijing Yiche Information Science and
Technology Co., Ltd., Shanghai Weishang Business Consulting Co., Ltd., Beijing Bitauto Interactive Technology Co., Ltd., Kunshan
Siwopu Intelligent Equipment Co., Ltd., and Hefei Chuangwei Information Consultation Co., Ltd. and we received total sales of goods of
RMB298.5 million, RMB4,139.2 million and RMB3,105.9 million (US$450.3 million), respectively.
In 2020, we received IT support services from Beijing Yiche Information Science and Technology Co., Ltd., a company
significantly influenced by Bin Li, and incurred expenses of IT support services of RMB0.3 million.
In 2020, 2021 and 2022, we received marketing and advertising services from Beijing Xinyi Hudong Guanggao Co., Ltd.,
Beijing Chehui Hudong Guanggao Co., Ltd., Bite Shijie (Beijing) Keji Co., Ltd., Beijing Yiche Interactive Advertising Co., Ltd.,
Shanghai Yiju Information Technology Co., Ltd., Tianjin Boyou Information Technology Co., Ltd. and Beijing Bit Ep Information
Technology Co., Ltd., and we incurred expenses of marketing and advertising services RMB138.2 million, RMB5.2 million and RMB9.0
million (US$1.3 million), respectively. Beijing Yiche Interactive Advertising Co., Ltd., Shanghai Yiju Information Technology Co., Ltd.,
Tianjin Boyou Information Technology Co., Ltd. and Beijing Bit Ep Information Technology Co., Ltd. are controlled by our principal
shareholders. In December 2020, Mr. Bin Li resigned as chairman of the Board in Beijing Bitauto Interactive Technology Co., Ltd. Since
then, Beijing Bitauto Interactive Technology Co., Ltd., Beijing Xinyi Hudong Guanggao Co., Ltd., Bite Shijie (Beijing) Keji Co., Ltd.
and Beijing Chehui Hudong Guanggao Co., Ltd. are no longer controlled by Mr. Bin Li, and are no longer our related parties.
In 2020, 2021 and 2022, we provided property management, administrative support, design and research and development
services to our affiliates and companies controlled by our principal shareholders, including Wuhan Weineng Battery Assets Co., Ltd.,
Nanjing Weibang Transmission Technology Co., Ltd. and Beijing Weixu Business Consulting Co., Ltd., and we received total service
income of RMB1.6 million, RMB57.9 million and RMB122.7 million (US$17.8 million), respectively.
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In 2020, 2021 and 2022, we paid a total of RMB174.7 million, RMB89.3 million and nil, respectively, for the cost of
manufacturing consignment to Suzhou Zenlead XPT New Energy Technologies Co., Ltd., or Suzhou Zenlead. Suzhou Zenlead was an
affiliate of ours in 2020 and 2021. In February 2022, Suzhou Zenlead paid considerations of RMB 46.6 million to us in exchange for the
exemption from battery warranty liabilities, and we disposed of our equity interests in Suzhou Zenlead. As a result, Suzhou Zenlead is no
longer a related party of our company as of the date of this annual report.
In 2020, 2021 and 2022, we received research and development and maintenance services from Kunshan Siwopu Intelligent
Equipment Co., Ltd., Xunjie Energy (Wuhan) Co., Ltd., Suzhou Zenlead XPT New Energy Technologies Co., Ltd., Wuhan Weineng
Battery Assets Co., Ltd, Ningbo Meishan Free Trade Port Weilai Xinneng Investment Management Co., Ltd., Jianglai Advanced
Manufacturing Technology (Anhui) Co., Ltd., and paid a total of RMB3.4 million, RMB8.2 million and RMB136.4 million (US$19.8
million), respectively.
In 2020, 2021 and 2022, we paid a total of RMB137.6 million, RMB1,157.7 million and RMB1,066.8 million (US$154.7
million), for purchase of property and equipment and raw material, to Kunshan Siwopu Intelligent Equipment Co., Ltd., Nanjing
Weibang Transmission Technology Co., Ltd. and Xunjie Energy (Wuhan) Co., Ltd.
In 2020, 2021 and 2022, we received a total of RMB0.5 million, nil and RMB1.0 million (US$0.1 million), for sale of raw
material, property and equipment, from Wuhan Weineng Battery Assets Co., Ltd. , and Wistron Info Comm (Kunshan) Co., Ltd.
In November 2021, we acquired from Ningbo Meishan Bonded Port Area Weilan Investment Co., Ltd., certain equity interests
in companies associated with NIO Capital for RMB50.0 million.
C. Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
We have appended consolidated financial statements filed as part of this annual report.
Legal Proceedings
From time to time, we may be involved in legal proceedings in the ordinary course of our business. Between March and July
2019, several securities class action lawsuits were filed against us, certain of our directors and officers, our underwriters in the IPO and
our process agent. Some of these actions have been withdrawn, transferred or consolidated. Two actions commenced during the
aforementioned time period have proceeded in the U.S. District Court for the Eastern District of New York (E.D.N.Y.) and Supreme
Court of the State of New York, New York County (N.Y. County). The plaintiffs in these cases allege, in sum and substance, that our
statements in the Registration Statement and/or other public statements were false or misleading and in violation of the U.S. federal
securities laws. In the E.D.N.Y. action, In re NIO, Inc. Securities Litigation, 1:19-cv-01424, the court denied our Motion to Dismiss in
August 2021. Briefing on Plaintiffs’ Motion for Class Certification was completed in December 2022, with a ruling still pending.
Discovery is ongoing, and we have been producing documents pursuant to the court’s order and following the relevant substantive and
procedural requirements under applicable PRC laws on the export of China-origin data. In the New York county action, In re NIO Inc.
Securities Litigation, Index No. 653422/2019, the court granted our company and other defendants’ Motion to Dismiss in October 2021.
The Appellate Division affirmed the dismissal of Plaintiffs’ claims on December 8, 2022. Separately, between August and September
2022, two complaints were filed against us, our CEO and our CFO in the federal district court for the Southern District of New York
(S.D.N.Y.), in the actions captioned Saye v. NIO Inc. et al., Case No. 1:22-cv-07252 (S.D.N.Y.) and Bohonok v. NIO Inc. et al., Case No.
1:22-cv-07666 (S.D.N.Y.). Relying on a short seller report (see “Item 3. Key Information—D. Risk Factors—Risks Related to Our ADSs
and Class A Ordinary Shares – Techniques employed by short sellers may drive down the market price of our ADSs”), these complaints
allege that certain of our public disclosures between Q3 2020 and Q1 2022 contained false statements or omissions in violation of the
Securities Exchange Act of 1934. On December 14, 2022, the court consolidated the two actions and appointed lead plaintiff. On
February 28, 2023, plaintiffs filed an amended complaint. We will file a motion to dismiss in due course.
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For those of the abovementioned class actions that remain pending, we are currently unable to estimate the potential loss, if any,
associated with the resolution of such lawsuits. We are defending the actions vigorously. See “Item 3. Key Information—D. Risk Factors
— Risks related to our Business and Industry — We and certain of our directors and officers have been named as defendants in several
Shareholder class action lawsuits, which could have a material adverse impact on our business, financial condition, results of operation,
cash flows and reputation” for further details.
Dividend Policy
The payment of dividends is at the discretion of our board of directors, subject to our thirteenth amended and restated
memorandum and articles of association. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend
may exceed the amount recommended by our board of directors. In either case, all dividends are subject to certain restrictions under
Cayman Islands law, namely that our company may only pay dividends out of profits or the share premium account, and provided that in
no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary
course of business. Even if we decide to pay dividends, the form, frequency and amount will depend upon our future operations and
earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of
directors may deem relevant.
We do not have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future. We currently intend
to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
We are a holding company incorporated in the Cayman Islands. We may rely on dividends paid by our subsidiaries in China for
our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC
subsidiaries to pay dividends to us. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We
may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we
may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on
our ability to conduct our business.”
If we pay any dividends on our ordinary shares, we will pay those dividends which are payable in respect of the ordinary shares
underlying our ADSs to the depositary, as the registered holder of such ordinary shares, and the depositary then will pay such amounts to
our ADS holders in proportion to the ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit
agreements, including the fees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S.
dollars.
B. Significant Changes
Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our
audited consolidated financial statements included in this annual report.
ITEM 9. THE OFFER AND LISTING
A. Offering and Listing Details
Our ADSs, each representing one Class A ordinary share, have been listed on the NYSE since September 12, 2018 under the
symbol “NIO.”
Our Class A ordinary shares have been listed on the Hong Kong Stock Exchange, by way of introduction, since March 10, 2022
under the stock code “9866.”
Our Class A ordinary shares have been listed on the Singapore Exchange, by way of introduction, since May 20, 2022 under the
stock code “NIO.”
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Currently, our ordinary shares consist of Class A ordinary shares and Class C ordinary shares. Holders of Class A ordinary
shares are entitled to one vote per share, and holders of Class C ordinary shares are entitled to eight votes per share. See “Item 3. Key
Information—D. Risk Factors—Risks Related to Our ADSs and Class A Ordinary Shares—Our dual-class voting structure will limit the
holders of our Class A ordinary shares and ADSs to influence corporate matters, provide certain shareholders of ours with substantial
influence and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and
ADSs may view as beneficial.”
B. Plan of Distribution
Not applicable.
C. Markets
Our ADSs, each representing one Class A ordinary share, have been listed on the NYSE since September 12, 2018 under the
symbol “NIO.”
Our Class A ordinary shares have been listed on the Hong Kong Stock Exchange, by way of introduction, since March 10, 2022
under the stock code “9866.”
Our Class A ordinary shares have been listed on the Singapore Exchange, by way of introduction, since May 20, 2022 under the
stock code “NIO.”
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
We are an exempted company incorporated under the laws of the Cayman Islands and our affairs are governed by our current
thirteenth amended and restated memorandum and articles of association, the Companies Act, and the common law of the Cayman
Islands.
The following are summaries of material provisions of our thirteenth amended and restated memorandum and articles of
association which became effective in August 2022, insofar as they relate to the material terms of our ordinary shares.
Objects of Our Company
Under our thirteenth amended and restated memorandum and articles of association, the objects of our company are unrestricted
and we have the full power and authority to carry out any object not prohibited by the law of the Cayman Islands.
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Ordinary Shares
Our authorized share capital is US$1,000,000 divided into 4,000,000,000 shares comprising of (i) 2,632,030,222 Class A
ordinary shares of a par value of US$0.00025 each, (ii) 148,500,000 Class C ordinary shares of a par value of US$0.00025 each and (iii)
1,219,469,778 shares of a par value of US$0.00025 each of such class or classes (however designated) as our board of directors may
determine in accordance with our thirteenth amended and restated memorandum and articles of association. All of our issued and
outstanding ordinary shares are fully paid and non-assessable. Our ordinary shares are issued in registered form, and are issued when
registered in our register of members. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their
ordinary shares. Under our thirteenth amended and restated memorandum and articles of association, our company may not issue bearer
shares.
Class of ordinary shares
Holders of Class A ordinary shares and Class C ordinary shares shall at all times vote together as one class on all resolutions
submitted to a vote by the holders of ordinary shares. Each Class A ordinary share shall entitle the holder thereof to one (1) vote on all
matters subject to vote at general meetings of our company, and each Class C ordinary share shall entitle the holder thereof to eight (8)
votes on all matters subject to vote at general meetings of our company. During the Relevant Period, our company shall have only one
class of shares that each of such share entitles the holder thereof to more than one (1) vote on all matters subject to vote at general
meetings of our company, which is Class C ordinary shares.
Conversion
Each Class C ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof. In
no event shall Class A ordinary shares be convertible into Class C ordinary shares.
Upon any sale, transfer, assignment or disposition of any Class C ordinary share by a shareholder to any person who is not an
existing shareholder of Class C ordinary shares and any affiliate of such shareholder or NIO Users Trust, or upon a change of ultimate
beneficial ownership of any Class C ordinary share to any person who is not an existing shareholder of Class C ordinary shares and any
affiliate of such shareholder or NIO Users Trust, each such Class C ordinary share shall be automatically and immediately converted into
one (1) Class A ordinary share.
Dividends
The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors, subject to our
thirteenth amended and restated memorandum articles of association. In addition, our shareholders may by ordinary resolution declare a
dividend, but no dividend may exceed the amount recommended by our directors. In either case, under the laws of the Cayman Islands,
our company may pay a dividend out of either profits or share premium account, provided that in no circumstances may a dividend be
paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.
Voting Rights
Voting at any shareholders’ meeting is by show of hands unless a poll is demanded. Each Class A ordinary share shall entitle the
holder thereof to one (1) vote on all matters subject to vote at general meetings of our company, and each Class C ordinary share shall
entitle the holder thereof to eight (8) votes on all matters subject to vote at general meetings of our company. A poll may be demanded by
the chairman of such meeting or any one or more shareholders present in person or by proxy at the meeting. However, during the
Relevant Period, each Class A ordinary share and each Class C ordinary share shall entitle its holder to one vote on a poll at a general
meeting in respect of a resolution on any of the following matters: (i) any amendment of our memorandum or articles of association,
including the variation of the rights attached to any class of shares; (ii) the appointment, election or removal of any independent non-
executive director; (iii) the appointment or removal of the auditors; or (iv) the voluntary liquidation or winding-up of our company.
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An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the
votes attaching to the ordinary shares cast at a meeting, while a special resolution requires the affirmative vote of no less than three-
fourths of the votes cast attaching to the outstanding ordinary shares at a meeting. A special resolution will be required for important
matters such as a change of name or making changes to our thirteenth amended and restated memorandum and articles of association.
Holders of our ordinary shares may effect certain changes by ordinary resolution, including increasing the amount of our authorized
share capital, consolidating all or any of our share capital into shares of larger amount than our existing shares, sub-dividing our shares or
any of them into shares of an amount smaller than that fixed by our thirteenth amended and restated memorandum and articles of
association, and cancelling any unissued shares. Both ordinary resolution and special resolution may also be passed by a unanimous
written resolution signed by all the shareholders of our company, as permitted by the Companies Act and our thirteenth amended and
restated memorandum and articles of association.
Appointment and Removal of Directors
Our board of directors may, by the affirmative vote of a simple majority of the directors present and voting at a board meeting,
(i) appoint any person as a director, to fill a casual vacancy on the board or, (ii) subject to the maximum size of the board of directors
being nine (9) directors, appoint any person as an addition to the existing board. Directors may be removed by ordinary resolution of our
shareholders. Subject to the relevant code, rules and regulations applicable to us as a result of our listing in the United States applicable
to the composition of the board and qualifications and appointment of directors, (i) NIO Users Trust shall be entitled to nominate one (1)
director to the board; and (ii) in the event that Mr. Bin Li is not an incumbent director and the board is composed of no less than six (6)
directors, NIO Users Trust shall be entitled to nominate one (1) extra director to the Board. Such director nomination right of NIO Users
Trust were ceased to be effective at the First AGM, and shall only be restored when our company is no longer listed on the Hong Kong
Stock Exchange.
General Meetings of Shareholders
As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders’ annual general
meetings. However, our thirteenth amended and restated memorandum and articles of association provide that we shall in each financial
year hold a general meeting as our annual general meeting in addition to any other meeting in that year and shall specify the meeting as
such in the notice calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors.
Shareholders’ general meetings may be convened by the chairman of board of directors or a majority of our board of directors.
Advance notice of at least twenty one calendar days is required for the convening of our annual general shareholders’ meeting and
advance notice of at least fourteen calendar days is required for any other general meeting of our shareholders. A quorum required for
any general meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third of all
votes attaching to all of our shares in issue and entitled to vote.
The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide
shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles
of association. Our thirteenth amended and restated memorandum and articles of association provide that upon the requisition of
shareholders representing in aggregate not less than one-tenth of all votes (on a one vote per share basis) attaching to the outstanding
shares of our company entitled to vote at general meetings, our board will convene an extraordinary general meeting and put the
resolutions so requisitioned to a vote at such meeting, and such shareholders may add resolutions to the meeting agenda.
Transfer of Ordinary Shares
Subject to the restrictions in our thirteenth amended and restated memorandum and articles of association set out below, any of
our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in writing and in the usual or common
form or any other form approved by our board of directors.
Our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully
paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:
● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and
such other evidence as our board of directors may reasonably require to show the right of the transferor to make the
transfer;
● the instrument of transfer is in respect of only one class of ordinary shares;
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● the instrument of transfer is properly stamped, if required;
● in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does
not exceed four; and
● a fee of such maximum sum as the New York Stock Exchange or the Hong Kong Stock Exchange may determine to be
payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.
If our directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was
lodged, send to each of the transferor and the transferee notice of such refusal.
The registration of transfers may, after compliance with any notice required of the New York Stock Exchange or the Hong Kong
Stock Exchange, be suspended and the register closed at such times and for such periods as our board of directors may from time to time
determine; provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in
any year as our board of directors may determine.
Liquidation
On the winding-up of our company, if the assets available for distribution among our shareholders shall be more than sufficient
to repay the whole of the share capital at the commencement of the winding-up, the surplus shall be distributed amongst our shareholders
in proportion to the par value of the shares held by them at the commencement of the winding-up, subject to a deduction from those
shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets
available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by
our shareholders in proportion to the par value of the shares held by them.
Calls on Shares and Forfeiture of Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice
served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and
remain unpaid are subject to forfeiture.
Redemption, Repurchase and Surrender of Shares
We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these
shares, on such terms and in such manner as may be determined by our board of directors or by special resolution of our shareholders.
Our company may also repurchase any of our shares on such terms and in such manner as have been approved by our board of directors
or by an ordinary resolution of our shareholders. Under the Companies Act, the redemption or repurchase of any share may be paid out
of our company’s profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of
capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay
its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or
repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding or (c) if
the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.
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Variations of Rights of Shares
If at any time, our share capital is divided into different classes of shares, the rights attached to any class of shares (unless
otherwise provided by the terms of issue of the shares of that class), may only be varied with the consent in writing of holders of not less
than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders
of the shares of that class by holders of three-fourths of the issued shares of that class present in person or by proxy and voting at such
meeting. The rights conferred upon the holders of the shares of any class issued shall not, subject to any rights or restrictions for the time
being attached to the shares of that class, be deemed to be varied by, inter alia, the creation, allotment or issue of further shares ranking
pari passu with such existing class of shares.
Issuance of Additional Shares
Our thirteenth amended and restated memorandum of association authorizes our board of directors to issue additional ordinary
shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares.
Our thirteenth amended and restated memorandum of association also authorizes our board of directors, at any time after the
Relevant Period, to establish from time to time one or more series of preference shares and to determine, with respect to any series of
preference shares, the terms and rights of that series, including:
● the designation of the series;
● the number of shares of the series;
● the dividend rights, dividend rates, conversion rights and voting rights; and
● the rights and terms of redemption and liquidation preferences.
At any time after the Relevant Period, our board of directors may issue preference shares without action by our shareholders to
the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.
Inspection of Books and Records
Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of
shareholders or our corporate records (except for our memorandum and articles of association and our register of mortgages and charges)
except as conferred by law or authorized by the directors or by ordinary resolution.
However, we will provide our shareholders with annual audited financial statements. See “Item 10. Additional Information— H.
Documents on Display.”
Changes in Capital
Our shareholders may from time to time by ordinary resolution:
● increase our share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall
prescribe;
● consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;
● sub-divide our existing shares, or any of them into shares of a smaller amount; provided that in the subdivision the
proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in
case of the share from which the reduced share is derived; or
● cancel any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person
and diminish the amount of our share capital by the amount of the shares so cancelled.
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Our shareholders may, by special resolution and subject to confirmation by the Grand Court of the Cayman Islands on an
application by our company for an order confirming such reduction, reduce our share capital and any capital redemption reserve in any
manner authorized by law.
Anti-Takeover Provisions
Some provisions of our thirteenth amended and restated memorandum and articles of association may discourage, delay or
prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:
● at any time after the Relevant Period, authorize our board of directors to issue preference shares in one or more series and
to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or
action by our shareholders; and
● at any time after the Relevant Period, limit the ability of shareholders to requisition and convene general meetings of
shareholders.
However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our thirteenth
amended and restated memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the
best interests of our company.
Exempted Company
We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between
ordinary resident companies, ordinary non-resident companies and exempted companies. Any company that is registered in the Cayman
Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The
requirements for an exempted company are essentially the same as for an ordinary resident/non-resident company except that an
exempted company:
● does not have to file an annual return detailing its shareholders with the Registrar of Companies of the Cayman Islands;
● is not required to open its register of members for inspection;
● does not have to hold an annual general meeting;
● may issue negotiable or bearer shares or shares with no par value;
● may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years
in the first instance);
● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
● may register as a limited duration company; and
● may register as a segregated portfolio company.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares
of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or
improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
C. Material Contracts
We have not entered into any material contracts other than in the ordinary course of business and other than those described in
“Item 4. Information on the Company,” “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions” or
elsewhere in this annual report.
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D. Exchange Controls
See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Foreign Exchange.”
E. Taxation
The following discussion of Cayman Islands, PRC and United States federal income tax consequences of an investment in our
ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which
are subject to change or differing interpretation, possibly with retroactive effect. This summary does not deal with all possible tax
consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under U.S. state and local tax laws
or under the tax laws of jurisdictions other than the Cayman Islands, the People’s Republic of China and the United States.
Cayman Islands Taxation
The Cayman Islands currently have no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift
tax. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which
may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman
Islands are not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange
control regulations under Cayman Islands law.
Payments of dividends and capital in respect of our Class A ordinary shares and ADSs will not be subject to taxation in the
Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Class A ordinary shares
or ADSs, nor will gains derived from the disposal of our Class A ordinary shares or ADSs be subject to Cayman Islands income or
corporation tax.
People’s Republic of China Taxation
Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a
“de facto management body” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax at the
rate of 25% on its global income. The implementation rules define the term “de facto management body” as the body that exercises full
and substantial control over and overall management of the business, productions, personnel, accounts and properties of an enterprise. In
April 2009, the STA issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the “de
facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only
applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or
foreigners, the criteria set forth in the circular may reflect the STA’s general position on how the “de facto management body” test should
be applied in determining the tax resident status of all offshore enterprises. According to Circular 82, an offshore incorporated enterprise
controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto
management body” in China only if all of the following conditions are met: (i) the primary location of the day-to-day operational
management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to
approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals,
and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior
executives habitually reside in the PRC. Further to Circular 82, the STA issued the STA Bulletin 45, which took effect in September
2011, to provide more guidance on the implementation of Circular 82. STA Bulletin 45 provides for procedures and administration
details of determination on resident status and administration on post-determination matters.
We believe that NIO Inc. is not a PRC resident enterprise for PRC tax purposes. NIO Inc. is not controlled by a PRC enterprise
or PRC enterprise group and we do not believe that NIO Inc. meets all of the conditions above. NIO Inc. is a company incorporated
outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its
records (including the resolutions of its board of directors and the resolutions of its shareholders) are maintained, outside the PRC. For
the same reasons, we believe our other entities outside of China are not PRC resident enterprises either. However, the tax resident status
of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the
term “de facto management body.” There can be no assurance that the PRC government will ultimately take a view that is consistent with
us.
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If the PRC tax authorities determine that NIO Inc. is a PRC resident enterprise for enterprise income tax purposes, we may be
required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the
holders of our ADSs. In addition, non-resident enterprise shareholders (including our ADS holders) may be subject to a 10% PRC tax on
gains realized on the sale or other disposition of ADSs or Class A ordinary shares, if such income is treated as sourced from within the
PRC. It is unclear whether our non-PRC individual shareholders (including our ADS holders) would be subject to any PRC tax on
dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If
any PRC tax were to apply to such dividends or gains, it would generally apply at a rate of 20% unless a reduced rate is available under
an applicable tax treaty. It is also unclear whether non-PRC shareholders of NIO Inc. would be able to claim the benefits of any tax
treaties between their country of tax residence and the PRC in the event that NIO Inc. is treated as a PRC resident enterprise. Pursuant to
the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in China, or has set
up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be
subject to a withholding tax on its PRC-sourced income at a rate of 10%. Pursuant to the Arrangement between Mainland China and the
Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the tax rate in respect to
dividends paid by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the Hong Kong enterprise
directly holds at least 25% of the PRC enterprise. Pursuant to STA Circular 81, a Hong Kong resident enterprise must meet the following
conditions, among others, in order to enjoy the reduced tax rate: (i) it must directly own the required percentage of equity interests and
voting rights in the PRC resident enterprise; and (ii) it must have directly owned such percentage in the PRC resident enterprise
throughout the 12 months prior to receiving the dividends. Furthermore, the Administrative Measures for Non-Resident Enterprises to
Enjoy Treatments under Treaties, which became effective in January 2020, require that non-resident enterprises must obtain approval
from the relevant tax authority in order to enjoy the reduced tax rate. There are also other conditions for enjoying the reduced tax rate
according to other relevant tax rules and regulations. Accordingly, our subsidiaries may be able to enjoy the 5% tax rate for the dividends
it receives from its PRC incorporated subsidiaries if they satisfy the conditions prescribed under STA Circular 81 and other relevant tax
rules and regulations and obtain the approvals as required. However, according to STA Circular 81, if the relevant tax authorities
determine our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities
may adjust the favorable tax rate on dividends in the future.
Provided that our Cayman Islands holding company, NIO Inc., is not deemed to be a PRC resident enterprise, holders of our
ADSs and Class A ordinary shares who are not PRC residents will not be subject to PRC income tax on dividends distributed by us or
gains realized from the sale or other disposition of our shares or ADSs. Circular 7 further clarifies that, if a non-resident enterprise
derives income by acquiring and selling shares in an offshore listed enterprise in the public market, such income will not be subject to
PRC tax. However, there is uncertainty as to the application of Circular 7, we and our non-PRC resident investors may be at risk of being
required to file a return and being taxed under Circular 7 and we may be required to expend valuable resources to comply with Circular 7
or to establish that we should not be taxed under Circular 7. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing
Business in China— We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-
PRC holding companies.”
United States Federal Income Taxation
The following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and
disposition of our ADSs or Class A ordinary shares by a U.S. Holder (as defined below) that acquires our ADSs and holds our ADSs as
“capital assets” (generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This
discussion is based upon existing U.S. federal tax law, which is subject to differing interpretations or change, possibly with retroactive
effect. There can be no assurance that the Internal Revenue Service (the “IRS”) or a court will not take a contrary position. This
discussion, moreover, does not address the U.S. federal estate, gift, Medicare, alternative minimum tax, and other non-income tax
considerations or any state, local and non-U.S. tax considerations, relating to the ownership or disposition of our ADSs or Class A
ordinary shares. The following summary does not address all aspects of U.S. federal income taxation that may be important to particular
investors in light of their individual circumstances or to persons in special tax situations such as:
● banks and other financial institutions;
● insurance companies;
● pension plans;
● cooperatives;
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● regulated investment companies;
● real estate investment trusts;
● broker-dealers;
● traders that elect to use a mark-to-market method of accounting;
● certain former U.S. citizens or long-term residents;
● tax-exempt entities (including private foundations);
● holders who acquire their ADSs or Class A ordinary shares pursuant to any employee share option or otherwise as
compensation;
● investors that will hold their ADSs or Class A ordinary shares as part of a straddle, hedge, conversion, constructive sale or
other integrated transaction for U.S. federal income tax purposes;
● investors that have a functional currency other than the U.S. dollar;
● persons that actually or constructively own 10% or more of our stock (by vote or value); or
● partnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding ADSs or
Class A ordinary shares through such entities.
All of the foregoing may be subject to tax rules that differ significantly from those discussed below.
Each U.S. Holder is urged to consult its tax advisor regarding the application of U.S. federal taxation to its particular
circumstances, and the state, local, non-U.S. and other tax considerations of the ownership and disposition of our ADSs or Class A
ordinary shares.
General
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ADSs or Class A ordinary shares that is, for U.S.
federal income tax purposes:
● an individual who is a citizen or resident of the United States;
● a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under
the law of the United States or any state thereof or the District of Columbia;
● an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
● a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S.
persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be
treated as a U.S. person under the Code.
If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ADSs
or Class A ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the
activities of the partnership. Partnerships holding our ADSs or Class A ordinary shares and their partners are urged to consult their tax
advisors regarding an investment in our ADSs or Class A ordinary shares.
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For U.S. federal income tax purposes, a U.S. Holder of ADSs will generally be treated as the beneficial owner of the underlying
shares represented by the ADSs. The remainder of this discussion assumes that a U.S. Holder of our ADSs will be treated in this manner.
Accordingly, deposits or withdrawals of Class A ordinary shares for ADSs will generally not be subject to U.S. federal income tax.
Passive Foreign Investment Company Considerations
A non-U.S. corporation, such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any
taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more
of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce
or are held for the production of passive income. For this purpose, cash and assets readily convertible into cash are categorized as passive
assets and the company’s goodwill and other unbooked intangibles are taken into account. Passive income generally includes, among
other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a
proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or
indirectly, 25% or more (by value) of the stock.
Although the law in this regard is not entirely clear, we treat the VIEs as being owned by us for U.S. federal income tax
purposes because we control their management decisions and are entitled to substantially all of the economic benefits associated with
these entities, and as a result, we consolidate their results of operations in our consolidated U.S. GAAP financial statements. If it were
determined, however, that we do not own the VIEs for U.S. federal income tax purposes, we may be treated as a PFIC for the current
taxable year and any subsequent taxable year.
Assuming that we are the owner of the VIEs for U.S. federal income tax purposes, and based upon our current and expected
income and assets, we do not believe that we were a PFIC for the taxable year ended December 31, 2022 and we do not expect to be a
PFIC for the current taxable year or the foreseeable future. While we do not expect to be or become a PFIC in the current or foreseeable
taxable years, no assurance can be given in this regard because the determination of whether we will be or become a PFIC is a factual
determination made annually that will depend, in part, upon the nature and composition of our income and assets. Fluctuations in the
market price of our ADSs may cause us to be classified as a PFIC for the current or future taxable years because the value of our assets
for purposes of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the
market price of our ADSs, which may be volatile. Furthermore, the composition of our income and assets may also be affected by how,
and how quickly, we use our liquid assets. Under circumstances where our passive income significantly increases relative to our non-
passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as
a PFIC may substantially increase.
If we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or Class A ordinary shares, the PFIC
rules discussed below under “—Passive Foreign Investment Company Rules” generally will apply to such U.S. Holder for such taxable
year, and unless the U.S. Holder makes certain elections, will apply in future years even if we cease to be a PFIC.
The discussion below under “—Dividends” and “—Sale or Other Disposition” is written on the basis that we will not be or
become classified as a PFIC for U.S. federal income tax purposes. The U.S. federal income tax rules that apply generally if we are
treated as a PFIC are discussed below under “—Passive Foreign Investment Company Rules.”
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Dividends
Subject to the discussion below under “—Passive Foreign Investment Company Rules,” any cash distributions (including the
amount of any PRC tax withheld) paid on our ADSs or Class A ordinary shares out of our current or accumulated earnings and profits, as
determined under U.S. federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend
income on the day actually or constructively received by the U.S. Holder, in the case of Class A ordinary shares, or by the depositary, in
the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, any
distribution we pay will generally be treated as a “dividend” for U.S. federal income tax purposes. Dividends received on our ADSs or
Class A ordinary shares will not be eligible for the dividends received deduction allowed to corporations. A non-corporate U.S. Holder
will be subject to tax at the lower capital gain tax rate applicable to “qualified dividend income,” provided that certain conditions are
satisfied, including that (1) our ADSs are readily tradeable on an established securities market in the United States, or, in the event that
we are deemed to be a PRC resident enterprise under the PRC tax law, we are eligible for the benefit of the United States-PRC income
tax treaty (the “Treaty”), (2) we are neither a PFIC nor treated as such with respect to such a U.S. Holder (as discussed below) for the
taxable year in which the dividend was paid and the preceding taxable year, and (3) certain holding period requirements are met. We
expect our ADSs (but not our Class A ordinary shares) will be considered to be readily tradeable on the New York Stock Exchange,
which is an established securities market in the United States. There can be no assurance, however, that our ADSs will be considered
readily tradeable on an established securities market in later years.
In the event that we are deemed to be a PRC resident enterprise under the PRC Enterprise Income Tax Law (see “—People’s
Republic of China Taxation” above), we may be eligible for the benefits of the Treaty. If we are eligible for such benefits, dividends we
pay on our Class A ordinary shares, regardless of whether such shares are represented by the ADSs, would be eligible for the reduced
rates of taxation described in the preceding paragraph.
Dividends will generally be treated as income from foreign sources for U.S. foreign tax credit purposes and will generally
constitute passive category income. Depending on the U.S. Holder’s individual facts and circumstances, a U.S. Holder may be eligible,
subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on
dividends received on our ADSs or Class A ordinary shares. A U.S. Holder who does not elect to claim a foreign tax credit for foreign
tax withheld may instead claim a deduction, for U.S. federal income tax purposes, in respect of such withholding, but only for a year in
which such holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex and their
outcome depends in large part on the U.S. Holder’s individual facts and circumstances. Accordingly, U.S. Holders are urged to consult
their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.
Sale or Other Disposition
Subject to the discussion below under “—Passive Foreign Investment Company Rules,” a U.S. Holder will generally recognize
capital gain or loss upon the sale or other disposition of ADSs or Class A ordinary shares in an amount equal to the difference between
the amount realized upon the disposition and the holder’s adjusted tax basis in such ADSs or Class A ordinary shares. Any capital gain or
loss will be long-term if the ADSs or Class A ordinary shares have been held for more than one year and will generally be U.S.-source
gain or loss for U.S. foreign tax credit purposes. Long-term capital gain of non-corporate U.S. Holders is generally eligible for a reduced
rate of taxation. In the event that gain from the disposition of the ADSs or Class A ordinary shares is subject to tax in the PRC, such gain
may be treated as PRC-source gain under the Treaty. Pursuant to recently issued Treasury Regulations, however, if a U.S. Holder is not
eligible for the benefits of the Treaty or does not elect to apply the Treaty, then such holder may not be able to claim a foreign tax credit
arising from any PRC tax imposed on the disposition of our ADSs or Class A ordinary shares. The deductibility of a capital loss may be
subject to limitations. U.S. Holders are urged to consult their tax advisors regarding the tax consequences if a foreign tax is imposed on a
disposition of our ADSs or Class A ordinary shares, including the availability of the foreign tax credit or deduction under their particular
circumstances, their eligibility for benefits under the Treaty and the potential impact of the recently issued Treasury Regulations.
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Passive Foreign Investment Company Rules
If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or Class A ordinary shares, and
unless the U.S. Holder makes a mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax
rules on (i) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to
a U.S. Holder that is greater than 125 percent of the average annual distributions paid in the three preceding taxable years or, if shorter,
the U.S. Holder’s holding period for the ADSs or Class A ordinary shares), and (ii) any gain realized on the sale or other disposition of
ADSs or Class A ordinary shares. Under the PFIC rules:
● the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or Class A
ordinary shares;
● the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first
taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income;
● the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in
effect for individuals or corporations, as appropriate, for that year; and
● an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the tax
attributable to each prior taxable year, other than a pre-PFIC year.
If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or Class A ordinary shares and any of our
subsidiaries, the VIEs or any of the subsidiaries of the VIEs are also a PFIC, such U.S. Holder would be treated as owning a
proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are urged
to consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries, the VIEs or any of the subsidiaries of
the VIEs.
As an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election
with respect to such stock, provided that such stock is regularly traded on a qualified exchange, as defined in applicable U.S. Treasury
regulations. For those purposes, our ADSs, but not our Class A ordinary shares, are traded on the New York Stock Exchange which is a
qualified exchange. We anticipate that our ADSs should qualify as being regularly traded, but no assurances may be given in this regard.
If a U.S. Holder makes this election, the holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the
excess, if any, of the fair market value of ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs and (ii)
deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the ADSs over the fair market value of such ADSs held at the
end of the taxable year, but such deduction will only be allowed to the extent of the amount previously included in income as a result of
the mark-to-market election. The U.S. Holder’s adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting
from the mark-to-market election. If a U.S. Holder makes a mark-to-market election in respect of a corporation classified as a PFIC and
such corporation ceases to be classified as a PFIC, the holder will not be required to take into account the gain or loss described above
during any period that such corporation is not classified as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S.
Holder recognizes upon the sale or other disposition of our ADSs in a year when we are a PFIC will be treated as ordinary income and
any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously
included in income as a result of the mark-to-market election.
Because a mark-to-market election technically cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may
continue to be subject to the PFIC rules with respect to such U.S. Holder’s indirect interest in any investments held by us that are treated
as an equity interest in a PFIC for U.S. federal income tax purposes.
We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections which, if
available, would result in tax treatment different from (and generally less adverse than) the general tax treatment for PFICs described
above.
If a U.S. Holder owns our ADSs or Class A ordinary shares during any taxable year that we are a PFIC, the holder must
generally file an annual IRS Form 8621. You should consult your tax advisors regarding the U.S. federal income tax consequences of
owning and disposing of our ADSs or Class A ordinary shares if we are or become a PFIC.
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F. Dividends and Paying Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
We are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we
are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F no later than
four months after the close of each fiscal year. Copies of reports and other information, when so filed, may be inspected without charge
and may be obtained at prescribed rates at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC
at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that contains reports, proxy and information statements, and
other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer,
we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements,
and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act.
We will furnish Deutsche Bank Trust Company Americas, the depositary of our ADSs, with our annual reports, which will
include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP, and all
notices of shareholders’ meetings and other reports and communications that are made generally available to our shareholders. The
depositary will make such notices, reports and communications available to holders of ADSs and, upon our request, will mail to all
record holders of ADSs the information contained in any notice of a shareholders’ meeting received by the depositary from us.
In accordance with NYSE Rule 203.01, we will post this annual report on our website, http://ir.nio.com/. In addition, we will
provide hardcopies of our annual report to shareholders, including ADS holders, free of charge upon request.
I. Subsidiary Information
Not applicable.
J. Annual Report to Security Holders
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Exchange Risk
We expect that, in the foreseeable future, the majority of our revenues will be denominated in RMB while our expenses are
denominated in RMB and other currencies including the U.S. dollar, the pound sterling and the Euro. As a result, we are exposed to risk
related to movements between the RMB and such other currencies. In addition, the value of our ADSs and Class A ordinary shares will
be affected by the exchange rate between U.S. dollar and RMB because the value of our business is effectively denominated in RMB,
while our Class A ordinary shares and the ADSs will be traded in Hong Kong dollars and U.S. dollars, respectively. Furthermore, we
have purchased certain financial products issued by banks, the returns of which could also be affected by the exchange rate between
RMB and other currencies.
The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China.
The Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. It is difficult to predict how market forces
or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.
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To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the
U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion. Conversely, if we decide to convert
Renminbi into U.S. dollars for the purpose of making payments for dividends on our Class A ordinary shares or ADSs or for other
business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amounts
available to us.
Interest Rate Risk
Our exposure to interest rate risk relates primarily to the interest rates associated with the outstanding convertible notes we
issued and bank loans that bear floating interest rates. The interest rate risk may result from many factors, including government
monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our
control. We may incur additional loans or other financing facilities in the future. The objective of interest rate risk management is to
minimize financial costs and uncertainties associated with interest rate changes. We strive to effectively manage our interest rate risk by
periodic monitoring and responding to risk factors on a timely basis, improve the structure of long-term and short-term borrowings and
maintain the appropriate balance between loans with floating interest rates and fixed interest rates.
We are subject to interest rate sensitivity on our outstanding 2024 Notes, 2026 Notes and 2027 Notes. We account for our
convertible notes on an amortized cost basis and our recognized value of the convertible notes does not reflect changes in fair value.
Also, because convertible notes we have issued either bear interest at a fixed rate or bear no interest, we have not incurred financial
statement impact resulting from changes in interest rates. However, changes in market interest rates impact the fair value of the
convertible notes along with other variables such as our credit spreads and the market price and volatility of our ADSs and ordinary
shares. Increases in market interest rates would result in a decrease in the fair value of our outstanding convertible notes and decreases in
market interest rates would result in an increase in the fair value of our outstanding convertible notes. For information on the maturities
and other contractual terms of our convertible notes, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and
Capital Resources—Cash Flows and Working Capital.”
With regard to interest rate sensitivity on our bank loans, we present the sensitivity analysis below based on the exposure to
interest rates for interest bearing bank loans with variable interest rates as of December 31, 2022. The analysis is prepared assuming that
those balances outstanding as of December 31, 2022 were outstanding for the whole financial year. A 1.0% increase or decrease which
represents our management’s assessment of the reasonably possible change in interest rates is used. Assuming no change in the
outstanding balance of our existing interest-bearing bank loans balances with floating interest rates as of December 31, 2022, a 1.0%
increase or decrease in each applicable interest rate would add or deduct RMB24.4 million (US$3.5 million) to our interest expense for
the year ended December 31, 2022. We have not used any derivative financial instruments to manage our interest risk exposure.
In addition, we may from time to time invest in interest-earning instruments. Investments in both fixed rate and floating rate
interest-earning instruments carry certain interest rate risk associated with our investment return. Fixed rate securities may have their fair
market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if
interest rates fall.
Inflation
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for
December 2020, 2021 and 2022 were increases of 0.2%, 1.5% and 1.8%, respectively. Although we have not been materially affected by
inflation in the PRC in the past, we may be affected in the future by higher rates of inflation in the PRC. For example, certain operating
costs and expenses, such as employee compensation and office operating expenses may increase as a result of higher inflation.
Additionally, because a substantial portion of our assets consists of cash and cash equivalents and short-term investments, high inflation
could significantly reduce the value and purchasing power of these assets. We are not able to hedge our exposure to higher inflation in
China.
As we expand our global presence and offer products and services to markets outside China, we expect the inflationary
pressures in Europe and the U.S. to adversely impact our operations. The inflation in Europe and the U.S. may lead to an increase in
certain operating costs and expenses, such as employee compensation, office operating expenses and raw material and components costs.
Moreover, if China, Europe or other markets that we may expand into experience higher rates of inflation in the future, the purchasing
power of our potential customers may decline, and consumer demand for our vehicles in those markets may be suppressed, which could
in turn negatively affect our results of operations, financial condition and prospects.
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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.
D. American Depositary Shares
Fees and Charges Our ADS holders May Have to Pay
Holders of our ADSs will be required to pay the following service fees to the depositary bank and certain taxes and
governmental charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited
securities represented by any of ADSs held):
Service
● To any person to which ADSs are issued or to any person to which a distribution is made in
respect of ADS distributions pursuant to stock dividends or other free distributions of stock,
bonus distributions, stock splits or other distributions (except where converted to cash)
Fees
Up to US$0.05 per ADS issued
● Cancellation of ADSs, including the case of termination of the deposit agreement
● Distribution of cash dividends
● Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale
Up to US$0.05 per ADS cancelled
Up to US$0.05 per ADS held
Up to US$0.05 per ADS held
of rights, securities and other entitlements
● Distribution of ADSs pursuant to exercise of rights
● Distribution of securities other than ADSs or rights to purchase additional ADSs
● Depositary services
Up to US$0.05 per ADS held
Up to US$0.05 per ADS held
Up to US$0.05 per ADS held on the
applicable record
date(s) established by the depositary
bank
Holders of our ADSs will also be responsible to pay certain fees and expenses incurred by the depositary bank and certain taxes
and governmental charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited
securities represented by any of your ADSs) such as:
● Fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in
Cayman Islands (i.e., upon deposit and withdrawal of ordinary shares).
● Expenses incurred for converting foreign currency into U.S. dollars.
● Expenses for cable, telex and fax transmissions and for delivery of securities.
● Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or
withholding taxes (i.e., when ordinary shares are deposited or withdrawn from deposit).
● Fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit.
● Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory
requirements applicable to ordinary shares, deposited securities, ADSs and ADRs.
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● Any applicable fees and penalties thereon.
The depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers
(on behalf of their clients) receiving the newly issued ADSs from the depositary bank and by the brokers (on behalf of their clients)
delivering the ADSs to the depositary bank for cancellation. The brokers in turn charge these fees to their clients. Depositary fees
payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the
depositary bank to the holders of record of ADSs as of the applicable ADS record date.
The depositary fees payable for cash distributions are generally deducted from the cash being distributed or by selling a portion
of distributable property to pay the fees. In the case of distributions other than cash (i.e., share dividends, rights), the depositary bank
charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of
the investor (whether certificated or uncertificated in direct registration), the depositary bank sends invoices to the applicable record date
ADS holders. In the case of ADSs held in brokerage and custodian accounts (via DTC), the depositary bank generally collects its fees
through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and
custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients’ ADSs in DTC accounts in turn
charge their clients’ accounts the amount of the fees paid to the depositary banks.
In the event of refusal to pay the depositary fees, the depositary bank may, under the terms of the deposit agreements, refuse the
requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS
holder.
The depositary may make payments to us or reimburse us for certain costs and expenses, by making available a portion of the
ADS fees collected in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary bank agree
from time to time.
Fees and Other Payments Made by the Depositary to Us
Deutsche Bank Trust Company Americas, as the depositary, has agreed to reimburse us for certain expenses we incur that are
related to establishment and maintenance of the ADR program upon such terms and conditions as we and the depositary may agree from
time to time. The depositary may make available to us a set amount or a portion of the depositary fees charged in respect of the ADR
program or otherwise upon such terms and conditions as we and the depositary may agree from time to time. In 2022, we did not receive
any after-tax reimbursement payment from the depositary.
Conversion Between Class A Ordinary Shares in Hong Kong and ADSs
A.
Dealings and Settlement of Class A Ordinary Shares in Hong Kong
Our Class A ordinary shares are traded on the Hong Kong Stock Exchange in board lots of 10 Class A ordinary shares. Dealings
in our Class A ordinary shares on the Hong Kong Stock Exchange will be conducted in Hong Kong dollars.
The transaction costs of dealings in our Class A ordinary shares on the Hong Kong Stock Exchange include:
● Hong Kong Stock Exchange trading fee of 0.00565% of the consideration of the transaction, charged to each of the buyer
and seller;
● SFC transaction levy of 0.0027% of the consideration of the transaction, charged to each of the buyer and seller;
● AFRC Transaction Levy of 0.00015%, charged per side of the consideration of a transaction, collected for the Accounting
and Financial Reporting Council (AFRC) (formerly known as Financial Reporting Council (FRC));
● transfer deed stamp duty of HK$5.00 per transfer deed (if applicable), payable by the seller;
● ad valorem stamp duty at a total rate of 0.26% of the value of the transaction, with 0.13% payable by each of the buyer and
the seller;
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● stock settlement fee, which is currently 0.002% of the gross transaction value, subject to a minimum fee of HK$2.00 and a
maximum fee of HK$100.00 per side per trade;
● brokerage commission, which is freely negotiable with the broker (other than brokerage commissions for IPO transactions
which are currently set at 1% of the subscription or purchase price and will be payable by the person subscribing for or
purchasing the securities); and
● charge by the Hong Kong share registrar between HK$2.50 to HK$20, depending on the speed of service (or such higher
fee as may from time to time be permitted under the Hong Kong Listing Rules), for each transfer of Class A ordinary
shares from one registered owner to another, each share certificate canceled or issued by it and any applicable fee as stated
in the share transfer forms used in Hong Kong.
Investors in Hong Kong must settle their trades executed on the Hong Kong Stock Exchange through their brokers directly or
through custodians. For an investor in Hong Kong who has deposited his or her Class A ordinary shares in his or her stock account or in
his or her designated Participant’s stock account of the Central Clearing and Settlement System established and operated by Hong Kong
Securities Clearing Company Limited, or CCASS, maintained with CCASS, settlement will be effected in CCASS in accordance with
the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. For an investor who holds the physical
certificates, settlement certificates and the duly executed transfer forms must be delivered to his or her broker or custodian before the
settlement date.
An investor may arrange with his or her broker or custodian on a settlement date in respect of his or her trades executed on the
Hong Kong Stock Exchange. Under the Hong Kong Listing Rules and the General Rules of CCASS and CCASS Operational Procedures
in effect from time to time, the date of settlement must be the second business day (a day on which the settlement services of CCASS are
open for use by CCASS Participants) following the trade date (T+2). For trades settled under CCASS, the General Rules of CCASS and
CCASS Operational Procedures in effect from time to time provided that the defaulting broker may be compelled to compulsorily buy-in
by HKSCC the day after the date of settlement (T+3), or if it is not practicable to do so on T+3, at any time thereafter. HKSCC may also
impose fines from T+2 onwards.
B.
Conversion between Class A Ordinary Shares Trading in Hong Kong and ADSs
We have established a branch register of members in Hong Kong, or the Hong Kong share register, which are maintained by our
Hong Kong share registrar, Computershare Hong Kong Investor Services Limited. Our principal register of members, or the Cayman
share register, are maintained by our principal share registrar, Maples Fund Services (Cayman) Limited in the Cayman Islands.
All Class A ordinary shares offered in connection with the listing of our Class A ordinary shares on the Hong Kong Stock
Exchange are registered on the Hong Kong share register in order to be listed and traded on the Hong Kong Stock Exchange. As
described in further detail below, holders of Class A ordinary shares registered on the Hong Kong share register are able to exchange
these Class A ordinary shares into ADSs, and vice versa.
In connection with the listing of our Class A ordinary shares on the Hong Kong Stock Exchange, and to facilitate fungibility and
conversion between ADSs and Class A ordinary shares and trading between the NYSE and the Hong Kong Stock Exchange, we have
moved a portion of our issued Class A ordinary shares from our register of members maintained in the Cayman Islands to our Hong
Kong share register.
C.
Converting Class A Ordinary Shares Trading in Hong Kong into ADSs
An investor who holds Class A ordinary shares registered in Hong Kong and who intends to convert them to ADSs to trade on
the NYSE must deposit or have his or her broker deposit the Class A ordinary shares with the depositary’s Hong Kong custodian,
Deutsche Bank AG, Hong Kong Branch, or the custodian, in exchange for ADSs.
A deposit of Class A ordinary shares trading in Hong Kong in exchange for ADSs involves the following procedures:
● If Class A ordinary shares have been deposited with CCASS, the investor must transfer the Class A ordinary shares to the
depositary’s account with the custodian within CCASS by following the CCASS procedures for transfer and submit and
deliver a duly completed and signed letter of transmittal to the custodian via his or her broker.
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● If Class A ordinary shares are held outside CCASS, the investor must arrange to deposit his or her Class A ordinary shares
into CCASS for delivery to the depositary’s account with the custodian within CCASS, and must submit and deliver a duly
completed and signed letter of transmittal to the custodian via his or her broker.
● Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, if
applicable, and subject in all case to the terms of the deposit agreement, the depositary will register the corresponding
number of ADSs in the name(s) requested by an investor and will deliver the ADSs as instructed in the letter of transmittal.
For Class A ordinary shares deposited in CCASS, under normal circumstances, the above steps generally require two business
days, provided that the investor has provided timely and complete instructions. For Class A ordinary shares held outside CCASS in
physical form, the above steps may take 14 business days, or more, to complete. Temporary delays may arise. For example, the transfer
books of the depositary may from time to time be closed to ADS issuances. The investor will be unable to trade the ADSs until the
procedures are completed.
D.
Surrender ADSs to Ordinary Shares Trading in Hong Kong
An investor who holds ADSs and wishes to receive ordinary shares that trade on the Hong Kong Stock Exchange must
surrender the ADSs the investor holds and withdraw ordinary shares from the ADS program and cause his or her broker or other
financial institution to trade such ordinary shares on the Hong Kong Stock Exchange.
An investor that holds ADSs indirectly through a broker or other financial institution should follow the procedure of the broker
or financial institution and instruct the broker to arrange for surrender of the ADSs, and transfer of the underlying Shares from the
depositary’s account with the custodian within the CCASS system to the investor’s Hong Kong stock account.
For investors holding ADSs directly, the following steps must be taken:
● To withdraw ordinary shares from our ADS program, an investor who holds ADSs may turn in such ADSs at the office of
the depositary (and the applicable ADR(s) if the ADSs are held in certificated form), and send an instruction to cancel such
ADSs to the depositary. Those instructions must have a Medallion signature guarantee.
● Upon payment or net of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or
fees, if applicable, the depositary will instruct the custodian to deliver ordinary shares underlying the canceled ADSs to the
CCASS account designated by an investor.
● If an investor prefers to receive ordinary shares outside CCASS, he or she must so indicate in the instruction delivered to
the depositary.
For the ordinary shares to be received in CCASS, under normal circumstances, the above steps generally require two business
days, provided that the investor has provided timely and complete instructions. For the ordinary shares to be received outside CCASS in
physical form, the above steps may take 14 business days, or more, to complete. The investor will be unable to trade the ordinary shares
on the Hong Kong Stock Exchange until the procedures are completed.
Temporary delays may arise. For example, the transfer books of the depositary may from time to time be closed to ADS
cancellations. In addition, completion of the above steps and procedures for delivery for ordinary shares in a CCASS account is subject
to there being a sufficient number of ordinary shares on the Hong Kong share register to facilitate a withdrawal from the ADS program
directly into the CCASS system. We are not under any obligation to maintain or increase the number of ordinary shares on the Hong
Kong share register to facilitate such withdrawals.
E.
Converting ADSs to Class A Ordinary Shares Trading in Hong Kong
An investor who holds ADSs and who intends to convert his/her ADSs into Class A ordinary shares that trade on the Hong
Kong Stock Exchange must cancel the ADSs the investor holds and withdraw Class A ordinary shares from our ADS program and cause
his or her broker or other financial institution to trade such Class A ordinary shares on the Hong Kong Stock Exchange.
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An investor that holds ADSs indirectly through a broker or other financial institution should follow the procedure of the broker
or financial institution and instruct the broker to arrange for cancelation of the ADSs, and transfer of the underlying Class A ordinary
shares from the depositary’s account with the custodian within the CCASS system to the investor’s Hong Kong stock account.
For investors holding ADSs directly, the following steps must be taken:
● To withdraw Class A ordinary shares from our ADS program, an investor who holds ADSs may turn in such ADSs at the
office of the depositary (and the applicable ADR(s) if the ADSs are held in certificated form), and send an instruction to
cancel such ADSs to the depositary.
● Upon payment or net of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or
fees, if applicable, and subject in all cases to the terms of the deposit agreement, the depositary will instruct the custodian
to deliver Class A ordinary shares underlying the canceled ADSs to the CCASS account designated by an investor.
● If an investor prefers to receive Class A ordinary shares outside CCASS, he or she must receive Class A ordinary shares in
CCASS first and then arrange for the withdrawal from CCASS. Investors can then obtain a transfer form signed by
HKSCC Nominees Limited (as the transferor) and register Class A ordinary shares in their own names with the Hong Kong
share registrar. For Class A ordinary shares to be received in CCASS, under normal circumstances, the above steps
generally require two business days, provided that the investor has provided timely and complete instructions.
For Class A ordinary shares to be received outside CCASS in physical form, the above steps may take 14 business days, or
more, to complete. The investor will be unable to trade the Class A ordinary shares on the Hong Kong Stock Exchange until the
procedures are completed.
Temporary delays may arise. For example, the transfer books of the depositary may from time to time be closed to ADS
cancelations. In addition, completion of the above steps and procedures for delivery for Class A ordinary shares in a CCASS account is
subject to there being a sufficient number of Class A ordinary shares on the Hong Kong share register to facilitate a withdrawal from the
ADS program directly into the CCASS system. We are not under any obligation to maintain or increase the number of Class A ordinary
shares on the Hong Kong share register to facilitate such withdrawals.
F.
Depositary Requirements
Before the depositary delivers ADSs or permits withdrawal of Class A ordinary shares, the depositary may require:
● production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary;
and
● compliance with procedures it may establish, from time to time, consistent with the deposit agreement, including
completion and presentation of transfer documents.
The depositary may refuse to deliver, transfer, or register issuances, transfers, and cancellations of ADSs generally when the
transfer books of the depositary or our Hong Kong share registrar or Cayman Islands share registrar are closed or at any time if the
depositary or we determine it advisable to do so, subject to such refusal complying with U.S. federal securities laws.
All costs attributable to the transfer of Class A ordinary shares to effect a withdrawal from or deposit of Class A ordinary shares
into our ADS program will be borne by the investor requesting the transfer. In particular, holders of Class A ordinary shares and ADSs
should note that the Hong Kong share registrar will charge between HK$2.50 to HK$20, depending on the speed of service (or such
higher fee as may from time to time be permitted under the Hong Kong Listing Rules), for each transfer of Class A ordinary shares from
one registered owner to another, each share certificate canceled or issued by it and any applicable fee as stated in the share transfer forms
used in Hong Kong. In addition, holders of Class A ordinary shares and ADSs must pay up to US$5.00 per 100 ADSs (or portion
thereof) for each issuance of ADSs and each cancelation of ADSs, as the case may be, in connection with the deposit of Class A ordinary
shares into, or withdrawal of Class A ordinary shares from, our ADS program.
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Conversion Between Class A Ordinary Shares in Singapore and ADSs
A.
Clearance and Settlement on the Singapore Exchange
Our Class A ordinary shares are traded on the Singapore Exchange in board lots of 10 Class A ordinary shares. Our Class A
ordinary shares that are traded on the Singapore Exchange will be cleared and settled under the scripless book-entry settlement system of
the Central Depository (Pte) Limited, or CDP, and all dealings in and transactions of the Class A ordinary shares through the Singapore
Exchange will be effected in accordance with the terms and conditions for the operation of securities accounts maintained by a depositor
with CDP and the terms and conditions for CDP to act as depository for foreign securities, as amended from time to time.
Under the Cayman Islands Companies Act, only a person who agrees to become a shareholder of a Cayman Islands company
and whose name is entered in the register of members of such company is considered a member with rights to attend and vote at
shareholders’ meetings of such company.
Our Class A ordinary shares trading on the Singapore Exchange are registered in the name of CDP or its nominee and held by
CDP for and on behalf of persons who maintain, either directly or through depository agents, securities accounts. Accordingly, under
Cayman Islands laws, a NIO CDP depositor holding our Class A ordinary shares through CDP would not be recognized as our
shareholder but may be appointed by CDP as its proxy and have the direct right to attend and cast votes at such shareholders’ meetings.
Shareholders are to take note that no option shall be provided to shareholders for them to withdraw or deposit the Class A ordinary shares
from or with the CDP in scrip form. Accordingly, in the event that a NIO CDP depositor wishes to attend and vote at the shareholders’
meetings in his own name, the NIO CDP depositor would have to first convert his Class A ordinary shares trading on the Singapore
Exchange to ADS trading on the NYSE, before cancelling the relevant ADS with the ADS depositary, being Deutsche Bank Trust
Company Americas, and receiving the corresponding number of underlying Class A ordinary shares in certificated form in his own name
from the Cayman share registrar. The NIO CDP depositor must be a registered holder of Class A ordinary shares on the Cayman share
register prior to the record date for the shareholders’ meeting.
Our shareholders and ADS holders can convert and transfer shares trading on the Singapore Exchange to ADS trading on the
NYSE (and vice versa) only on a scripless basis, which involves a transfer of shares through the CDP electronic system between the CDP
accounts of the Singapore custodian of the ADS Depositary, namely DB Nominees (Singapore) Pte Ltd, and the shareholder (or his
depository agent). In this regard, the shares listed and traded on the Singapore Exchange shall be solely unrestricted shares. For the
avoidance of doubt, unrestricted shares which are not represented by ADSs will not be accepted for deposit into CDP.
Our shareholders will not be given an option to deposit and/or withdraw the Class A ordinary shares from and/or with the CDP
in scrip form (“Option”), in order to ensure that the Class A ordinary shares trading on the Singapore Exchange are strictly unrestricted
shares. If our shareholders are given the Option, there may be a risk of shares which are unregistered with the SEC and/or have yet to be
provided by the NYSE for listing (“Restricted Shares”) being deposited directly into CDP. Thereafter, it would be practically impossible
for our company and the ADS depositary to differentiate between unrestricted shares and Restricted Shares once shares are admitted for
trading in scripless form on the Singapore Exchange. Any conversion of Restricted Shares into ADS, without registration with the SEC
(or exemption, as the case may be) may further result in non-compliance with the relevant U.S. securities law.
Accordingly, the following mechanisms have been put in place to ensure that the Restricted Shares are not listed and traded on
the Singapore Exchange:
Shareholders would not be given an option to deposit and/or withdraw the Class A ordinary shares from and/or with the CDP in
scrip form to prevent shareholders from depositing Restricted Shares into CDP, and accordingly introducing Restricted Shares to the
Singapore Exchange for trading; and
Before the ADS depositary accepts deposits of shares to issue new ADSs, the ADS depositary would ensure, inter alia,
compliance with U.S. securities law requirements, and compliance with the terms and procedures of the ADS depositary which are
consistent with the deposit agreement (including completion and presentation of transfer documents). Accordingly, through this process,
only unrestricted shares would be permitted for deposit with the ADS depositary for the issuance of the corresponding ADSs for trading
on the NYSE.
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(1) NIO CDP depositors must have their respective securities accounts credited with the number of Class A ordinary shares
deposited before they can affect the desired trades. A fee of S$10.00 is payable upon the deposit of each instrument of transfer
with CDP and the ADS depositary reserves the right to charge additional fees imposed by the ADS depositary, CDP and any
brokers to ADS holders and NIO CDP depositors who have made requests for the conversion of ADSs into Class A ordinary
shares and vice versa. The above fees may be subject to such charges as may be imposed in accordance with CDP’s prevailing
policies or the current tax policies, including GST that may be in force in Singapore from time to time.
(2) Transactions in our Class A ordinary shares under the CDP book-entry settlement system will be reflected by the seller’s
securities account being debited with the number of Class A ordinary shares sold and the buyer’s securities account being
credited with the number of Class A ordinary shares acquired and no transfer stamp duty is currently payable for our Class A
ordinary shares that are settled on a book-entry basis.
The Class A ordinary shares traded on the Singapore Exchange will not be fungible with the Class A ordinary shares traded on
the Hong Kong Stock Exchange as there is no mechanism in place to facilitate such transfer of Class A ordinary shares between the
Singapore Exchange and the Hong Kong Stock Exchange.
B.
Clearing Fees
A Singapore clearing fee for trades in our Class A ordinary shares on the Singapore Exchange is payable at the rate of 0.0325%
of the contract value. The clearing fee, instrument of transfer deposit fee and share withdrawal fee may be subject to GST at the
prevailing rate of 8.0% (or such other rate prevailing from time to time).
Dealings in our Class A ordinary shares will be carried out in U.S. dollars and will be effected for settlement in CDP on a
scripless basis. Settlement of trades on a normal “ready” basis on the Singapore Exchange generally takes place on the second (2nd)
market day following the transaction date and payment for the securities between member companies of The Singapore Exchange and
NIO CDP depositors is generally settled on the following business day. CDP holds securities on behalf of depositors in securities
accounts. An investor may open a direct account with CDP or a sub-account with any depository agent. A depository agent may be a
member company of the Singapore Exchange, bank, merchant bank or trust company.
C.
Dealing of Shares on the Singapore Exchange
Dealing of Class A ordinary shares on the Singapore Exchange should be conducted with member companies of the Singapore
Exchange by NIO CDP depositors who hold direct securities accounts with CDP or a sub-account with a depository agent.
Dealings in, and transactions of, Class A ordinary shares on the Singapore Exchange will be due for settlement on the second
market day following the date of transaction (T+2 or the “Settlement Date”), and payment for the securities is generally settled on the
following business day. NIO CDP depositors selling Class A ordinary shares should ensure that there are sufficient Class A ordinary
shares in their direct securities account with CDP or their sub-account with a depository agent on the Settlement Date. Settlement of
dealings through the CDP direct securities account or sub-account with a depository agent shall be made in accordance with CDP’s
“Terms and Conditions for Operation of Securities Accounts with CDP”, and the “Terms and Conditions for CDP to Act as Depository
for Foreign Securities”, as amended from time to time. Investors should take note that they would need to maintain a direct account with
CDP or a sub-account with any depository agent before they can hold and/or trade the Class A ordinary shares on the Singapore
Exchange. If you do not currently have a direct account with CDP or a sub-account with a depository agent through which you can trade
securities on the Singapore Exchange, please open an account with CDP or contact a broker to open an account.
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D.
Instructions for the Cancellation of ADS Traded on NYSE and Withdrawal of Physical Class A Ordinary Share Certificates
ADS holders may turn in their ADS at the ADS depositary’s corporate trust office or by providing appropriate instructions to
their U.S. broker for cancellation and withdrawal of the underlying shares. In cases where the ADS holder would like to cancel their
ADS and withdraw the underlying shares in the form of physical Class A share certificates, the ADS holder or the holder’s U.S. broker
would need to inform us and the ADS depositary that they would like to receive the shares in this form. Upon payment of its relevant
fees, expenses and any taxes or charges, such as stamp taxes or stock transfer taxes or fees, and subject in all cases to the terms and
conditions of the deposit agreement, the ADS depositary will deliver the Class A ordinary shares on the Cayman share register and any
other deposited securities underlying the ADSs to the ADS holder or a person designated by the ADS holder at the office of the custodian
of the ADS depositary. Or, at the request, risk and expense of the ADS holder, the ADS depository will deliver the deposited securities at
its corporate trust office, to the extent permitted by law. The mechanism for cancelling ADSs and receiving Class A ordinary shares for
trading on the Singapore Exchange is described below.
Temporary delays may arise. For example, the transfer books of the ADS depositary may from time to time be closed to ADS
cancellations.
E.
No Withdrawal or Deposit of Class A Ordinary Shares in Scrip Form from or with the CFP
Shareholders should note that they will not be permitted to withdraw or deposit the Class A ordinary shares from or with the
CDP in scrip form, so as to ensure that the fungible ADSs and Class A ordinary shares trading on the NYSE and the Singapore Exchange
respectively have either been registered under the Securities Act or are otherwise freely tradable pursuant to an exemption from
registration under the Securities Act. In the event that any NIO CDP depositor wishes to withdraw his Class A ordinary shares in scrip
form for whatsoever reason, the NIO CDP depositor would have to first convert his Class A ordinary shares trading on the Singapore
Exchange to ADS trading on the NYSE, before cancelling the ADS with the ADS depositary and receiving such Class A ordinary shares
in physical share certificates as registered holder. The instructions for the cancellation of ADSs traded on the NYSE and withdrawal of
physical certificates of Class A ordinary shares are as set out above.
F.
Mechanism for Conversion and Transfer of Class A Ordinary Shares Trading on the Singapore Exchange to ADSs for
trading on the NYSE
Conversion of Class A ordinary shares on the Singapore Exchange to ADSs for trading on the NYSE will only be carried out on
a scripless basis. A NIO CDP depositor whose Class A ordinary shares are held through CDP (either directly or through a depository
agent) and wishes to convert and transfer his Class A ordinary share to ADS for trading on the NYSE, shall first provide ADS issuance
instructions to the Singapore custodian of the ADS depositary, namely DB Nominees (Singapore) Pte Ltd, in the form of a letter of
transmittal (LOT) through his Singapore broker, providing key information including but not limited to the number of ADSs to be issued,
the ADS delivery information, and such other documentation as the ADS depositary may require pursuant to the deposit agreement.
Immediately thereafter, the Singapore broker, on behalf of the NIO CDP depositor, shall make a Free of Payment (FOP) transfer of the
relevant number of the Class A ordinary shares to DB Nominees (Singapore) Pte Ltd through the CDP electronic system. The cut-off
time for providing the ADS issuance instructions in the form of a letter of transmittal and for the Singapore broker to make the FOP
transfer is 11:30 a.m. (Singapore time).
Such issuances are subject in all cases to the terms of the deposit agreement. All relevant forms and declarations required by the
ADS depositary must be fully completed, provided in a timely manner, duly signed and submitted to the ADS depositary with the
instruction to credit the relevant number of ADSs in DTC. Upon receipt of the relevant number of Class A ordinary shares, DB
Nominees (Singapore) Pte Ltd shall forward the corresponding letter of transmittal to the ADS depositary. Following which, the ADS
depositary shall issue the relevant number of ADSs as instructed by the letter of transmittal for delivery through the DTC settlement
system to the designated DTC securities account (whether held directly by the NIO CDP depositor or through a U.S. broker) upon
payment of its relevant fees, expenses and any taxes or charges such as stamp taxes or stock transfer taxes or fees.
The conversion and transfer of Class A ordinary shares in a securities account held with CDP to ADS in the NIO CDP
depositor’s securities account opened with his U.S. broker would normally take approximately two (2) business days from the time the
ADS depositary (and/or any of its agents in Singapore) receives the underlying Class A ordinary shares and the ADS issuance
instructions with the necessary documents, barring any closure of the transfer books of the ADS depositary or any other unforeseen
circumstances and assuming that all requisite forms/instructions have been duly completed and provided, and necessary payment for all
associated fees has been made.
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Please note that in all cases of transfers referred to in this section, there should not be any change or difference, or purported
change or difference, in the beneficial owner of the underlying Class A ordinary share before and after transfer of Class A ordinary
shares trading on the Singapore Exchange to ADSs for trading on the NYSE.
You may be charged with applicable fees by your broker or custodian in Singapore. Please note that the transfer process and/or
fees payable are subject to change. For further information or copies of the relevant forms, please contact the Company and the ADS
depositary directly. For the avoidance of doubt, all fees and taxes (including stamp duties) incurred during the transfer process shall be
borne by the relevant ADS holder.
G.
Mechanism for Conversion and Transfer of ADSs Trading on NYSE to Class A Ordinary Shares for Trading on the
Singapore Exchange
Conversion and transfer of ADSs to Class A ordinary shares for trading on the Singapore Exchange will only be carried out on a
scripless basis. As an ADS holder, if you wish to trade your underlying Class A ordinary shares on the Singapore Exchange, you must
first instruct your U.S. broker to convert the ADSs which you hold in NYSE into Class A ordinary shares through the submission of an
ADR cancellation instruction for the purpose of cancellation and withdrawal. The U.S. broker will subsequently surrender the relevant
ADSs to the ADS Depositary (through DTC), and provide the ADS Depositary with the ADR cancellation instruction and pay the ADS
Depositary’s fees, expenses and any applicable taxes or charges, such as stamp taxes or stock transfer taxes or fees.
Such cancellations and withdrawals are subject in all cases to the terms of the Deposit Agreement. All relevant forms and
declarations required by the ADS Depositary must be fully completed, provided in a timely manner, duly signed and submitted to the
ADS Depositary with the instruction to credit the relevant number of Class A ordinary shares into a securities account opened with CDP.
The ADS Depositary and its custodian shall electronically transfer the relevant number of Class A ordinary shares through the scripless
system operated by CDP from their securities account to your designated securities account (either in your direct name or maintained
under your Singapore broker as a depository agent).
The conversion and transfer of ADSs on NYSE to Class A ordinary shares in the NIO CDP depositor’s securities account
opened with CDP or his securities sub-account maintained with a Depository Agent would normally take approximately two (2) business
days to complete from the time the ADS Depositary receives the ADSs for cancellation, any applicable fees and the ADS cancellation
instructions with the necessary documents, barring any closure of the transfer books of the ADS Depositary or any other unforeseen
circumstances and assuming that all requisite forms/instructions have been duly completed and provided, and necessary payment for all
associated fees has been made.
Please note that in all cases of transfers referred to in this section, there should not be any change or difference, or purported
change or difference, in the beneficial owner of the underlying Class A ordinary share before and after transfer of ADSs trading on the
NYSE to Class A ordinary shares trading on the Singapore Exchange.
You may be charged with applicable fees by your broker or custodian in the U.S. Please note that the transfer process and/or
fees payable are subject to change. For further information or copies of the relevant forms, please contact the Company and the ADS
Depositary directly. For the avoidance of doubt, all fees and taxes (including stamp duties) incurred during the transfer process shall be
borne by the relevant ADS holder. For the avoidance of doubt, no specific consent or approval by the Company will be required for the
conversion and transfer of ADS on the NYSE to Class A ordinary shares for trading on the Singapore Exchange by shareholders and vice
versa.
H.
Voting Instructions
ADS holders are not treated as shareholders and accordingly, do not have shareholder rights. As the ADS depositary holds the
legal title to our Class A ordinary shares represented by the ADSs, ADS holders must rely on the ADS depositary to exercise the rights of
a shareholder. The obligations of the ADS depositary, rights and obligations of the ADS holders, including processes related to the voting
of the Class A ordinary shares underlying the ADSs, are governed by the conditions of the deposit agreement. Under the Cayman Islands
law, every other person who has agreed to become a member of a Cayman Islands company and whose name is entered in the register of
members of such company is considered a member. Accordingly, a NIO CDP depositor holding Class A ordinary shares through CDP
would not be recognized as our shareholder under the laws of the Cayman Islands but would be appointed as a proxy of CDP (which is a
registered shareholder), and have the right to attend general meetings of our shareholders and to cast any votes at such meetings.
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Where applicable and/or required, we will coordinate with the Singapore share transfer agent to mail to NIO CDP depositors, in
English, any notice of shareholders’ meetings, together with instruction form (“Voting Instruction Form”). The Voting Instruction Form
would in turn be consolidated by the Singapore share transfer agent. NIO CDP depositors will be able to vote on such matters tabled for
shareholders’ approval at the shareholders’ meetings by (i) attending the meetings and casting votes in person as a proxy appointed by
CDP, or (ii) returning the Voting Instruction Form by the relevant deadline to CDP or the Singapore share transfer agent, as the case may
be.
NIO CDP depositors who wish to attend shareholders’ meetings and exercise their voting rights directly under their own names
with regard to Class A ordinary shares beneficially owned by them, shall first convert their Class A ordinary shares to ADSs in
accordance with the above section on “Mechanism for Conversion and Transfer of Class A Ordinary Shares Trading on the Singapore
Exchange to ADSs Trading on the NYSE”. Thereafter, they would need to cancel the ADSs and withdraw the underlying physical Class
A ordinary share certificate in accordance with the above section on “Instructions for the Cancellation of ADS Traded on NYSE and
Withdrawal of Physical Class A Ordinary Share Certificates”, and make appropriate arrangements to hold the shares directly prior to the
record date for the relevant shareholders’ meeting.
I.
ADS Depositary Requirements
Before the ADS depositary accepts deposits of Class A ordinary shares, delivers ADSs or permits withdrawal of Class A
ordinary shares, the ADS depositary requires:
● production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary;
● compliance with terms and procedures it may establish, from time to time, consistent with the Deposit Agreement,
including completion and presentation of required transfer documents; and
● compliance with U.S. securities law requirements.
The ADS depositary may refuse to deliver, transfer, or register issuances, transfers and cancellations of ADSs generally when
the transfer books of the ADS depositary are closed, or at any time if the ADS depositary or our company determines it advisable to do
so. In addition, procedures for delivery of Class A ordinary shares in CDP are subject to there being a sufficient number of Class A
ordinary shares to facilitate a withdrawal from the ADS program directly into the CDP system. The Company, the ADS depositary and
the CDP are not under any obligation to maintain or increase the number of Class A ordinary shares in the CDP system to facilitate such
withdrawals.
Any affiliate of the Company (as defined in Rule 144(a)(1) of the Securities Act) can only deposit Class A ordinary shares into
the ADR program in connection with a contemporaneous sale of such ADSs issued on deposit or related shares on CDP, should they
cancel such ADSs and receive the underlying Class A ordinary shares.
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
PART II.
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Material Modifications to the Rights of Security Holders
See “Item 10—Additional Information—B. Memorandum and Articles of Association—Ordinary Shares” for a description of
the rights of securities holders, which remain unchanged.
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ITEM 15. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of
the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the
period covered by this report, as required by Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our management, with
the participation of our chief executive officer and chief financial officer, has concluded that, as of December 31, 2022, our disclosure
controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms,
and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our chief executive officer, as appropriate, to allow timely decisions regarding required
disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial
statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America
and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our
company are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance
regarding prevention or timely detection of the unauthorized acquisition, use or disposition of our company’s assets that could have a
material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all potential
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the SEC, our management
including our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of internal control over financial reporting
as of December 31, 2022 using the criteria set forth in the report “Internal Control—Integrated Framework (2013)” published by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the management concluded that our
internal control over financial reporting was effective as of December 31, 2022.
Changes in Internal Control over Financial Reporting
As required by Rule 13a-15(d), under the Exchange Act, our management, including our chief executive officer and our chief
financial officer, also conducted an assessment of our internal control over financial reporting to determine whether any changes
occurred during the period covered by this report have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting. Based on that assessment, it has been determined that there has been no such change during the period
covered by this annual report.
Attestation Report of the Registered Public Accounting Firm
Our independent registered public accounting firm, PricewaterhouseCoopers Zhong Tian LLP, has audited the effectiveness of
our company’s internal control over financial reporting as of December 31, 2022, as stated in its report, which appears on page F-2 of
this annual report on Form 20-F.
ITEM 16.
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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Mr. Denny Ting Bun Lee, a member of our audit committee and independent director
(under the standards set forth in Section 303A of the Corporate Governance Rules of the NYSE and Rule 10A-3 under the Securities
Exchange Act of 1934), is an audit committee financial expert.
ITEM 16B. CODE OF ETHICS
Our board of directors has adopted a code of ethics that applies to all of the directors, officers and employees of us and our
subsidiaries, whether they work for us on a full-time, part-time, consultative, or temporary basis. Certain provisions of the code apply
specifically to our chief executive officer, chief financial officer, senior finance officer, controller, senior vice presidents, vice presidents
and any other persons who perform similar functions for us. We have posted a copy of our code of business conduct and ethics on our
website at https://www.nio.io/code-of-business-conduct-and-ethics.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees by the categories specified below in connection with certain professional
services rendered by PricewaterhouseCoopers Zhong Tian LLP and its affiliates, our principal external auditor, for the years indicated.
We did not pay any other fees to our principal external auditors during the years indicated below.
Audit fees(1)
Audit related fees(2)
Tax fees(3)
Other fees(4)
Total
Note:
For the Year Ended December 31,
2022
2021
(in RMB thousands )
14,820
1,000
2,250
2,450
20,520
17,150
—
1,393
1,070
19,613
(1) “Audit fees” means the aggregate fees billed for professional services rendered by our principal external auditor, including the audits
of our annual financial statements and our internal controls over financial reporting and the quarterly reviews of our condensed
consolidated financial information, statutory audits for certain of our subsidiaries, and provision of comfort letters, consents and
other professional services in relation to our equity and debt offering, Hong Kong listing and Singapore listing.
(2) “Audit related fees” means the aggregate fees billed for professional services rendered by our principal external auditor that are
reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.”
(3) “Tax fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal
external auditor for tax compliance, tax advice and tax planning.
(4) “All other fees” means the aggregate fees billed for professional services rendered by our principal external auditor associated with
other advisory services.
The policy of our audit committee is to pre-approve all audit and other service provided by PricewaterhouseCoopers Zhong Tian
LLP and its affiliates, including audit services, tax services and other services described above, other than those for de minimis services
which are approved by the Audit Committee prior to the completion of the audit.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
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ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
As a Cayman Islands company listed on the New York Stock Exchange, we are subject to the NYSE corporate governance
listing standards. However, NYSE rules permit a foreign private issuer like us to follow the corporate governance practices of its home
country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the
NYSE corporate governance listing standards.
Pursuant to Sections 303A.01, 303A.04, 303A.05, 303A.07 and 302.00 of the New York Stock Exchange Listed Company
Manual, a company listed on the New York Stock Exchange must have a majority of independent directors, a nominating and corporate
governance committee composed entirely of independent directors, a compensation committee composed entirely of independent
directors and an audit committee with a minimum of three members, and must hold an annual shareholders’ meeting during each fiscal
year. We currently follow our home country practice in lieu of these requirements. We may also continue to rely on these and other
exemptions available to foreign private issuers in the future. See “Item 3. Key Information—D. Risk Factors—Risks related to our ADSs
and Class A Ordinary Shares—Our shareholders may face difficulties in protecting their interests, and ability to protect their rights
through U.S. courts may be limited, because we are incorporated under Cayman Islands law.”
Other than the home country practice described above, we are not aware of any significant differences between our corporate
governance practices and those followed by U.S. domestic companies under the NYSE corporate governance listing standards.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to
inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and our auditor
was subject to that determination. In May 2022, NIO Inc. was conclusively listed by the SEC as a Commission-Identified Issuer under
the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022,
the PCAOB removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely
registered public accounting firms. As a result, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA
after we file this annual report for the fiscal year ended December 31, 2022.
To our knowledge, as of the date of this annual report, (i) no governmental entities in the Cayman Islands or in China owns
shares of NIO Inc. or the VIEs; (ii) the governmental entities in China do not have a controlling financial interest in NIO Inc. or the
VIEs; (iii) none of the members of the board of directors of NIO Inc. or our operating entities, including the VIEs, is an official of the
Chinese Communist Party as of the date of this annual report; (iv) none of the currently effective memorandum and articles of
association (or equivalent organizing document) of NIO Inc. or the VIEs contains any charter of the Chinese Communist Party.
ITEM 17. FINANCIAL STATEMENTS
PART III.
We have elected to provide financial statements pursuant to “Item 18. Financial Statements.”
ITEM 18. FINANCIAL STATEMENTS
The consolidated financial statements of NIO Inc. and its subsidiaries and the related notes are included at the end of this annual
report.
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ITEM 19. EXHIBITS
Exhibit Number
1.1
2.1
2.2
2.3
2.4
2.5
2.6
4.1
4.2
4.3
4.4
4.5
4.6†
4.7
4.8
4.9
4.10
4.11
4.12
Description of Document
Thirteenth Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated herein
by reference to Exhibit 3.1 to the current report on Form 6-K (File No. 001-38638), furnished with the SEC on
August 25, 2022)
Registrant’s Specimen American Depositary Receipt (included in Exhibit 2.3)
Registrant’s Specimen Certificate for Class A ordinary shares (incorporated herein by reference to Exhibit 4.2 to the
registration statement on Form F-1 (File No. 333-226822), as amended, initially filed with the SEC on August 13,
2018)
Deposit Agreement, dated as of September 11, 2018, among the Registrant, Deutsche Bank Trust Company
Americas, as the depositary, and all holders and beneficial owners of the American Depositary Shares issued
thereunder (incorporated herein by reference to Exhibit 4.3 to the registration statement on Form S-8 (File No. 333-
229952), filed with the SEC on February 28, 2019)
Fifth Amended and Restated Shareholders’ Agreement, dated as of November 10, 2017, among the Registrant and
the other signatories thereto (incorporated herein by reference to Exhibit 4.4 to the registration statement on Form F-
1 (File No. 333-226822), as amended, initially filed with the SEC on August 13, 2018)
Description of American Depositary Shares of the Registrant (incorporated herein by reference to Exhibit 2.5 to the
Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Description of Class A ordinary shares of the Registrant (incorporated herein by reference to Exhibit 2.6 to the
Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
2015 Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-
1 (File No. 333-226822), as amended, initially filed with the SEC on August 13, 2018)
2016 Share Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form F-
1 (File No. 333-226822), as amended, initially filed with the SEC on August 13, 2018)
2017 Share Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-
1 (File No. 333-226822), as amended, initially filed with the SEC on August 13, 2018)
2018 Share Incentive Plan (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-
1 (File No. 333-226822), as amended, initially filed with the SEC on August 13, 2018)
Form of Indemnification Agreement, between the Registrant and its directors and executive officers (incorporated
herein by reference to Exhibit 10.5 to the registration statement on Form F-1 (File No. 333-226822), as amended,
initially filed with the SEC on August 13, 2018)
English translation of Manufacture Cooperation Agreement, dated as of May 23, 2016, between the registrant and
Anhui Jianghuai Automobile Co., Ltd. (incorporated herein by reference to Exhibit 10.10 to the registration
statement on Form F-1 (File No. 333-226822), as amended, initially filed with the SEC on August 13, 2018)
Form of Employment Agreement, between the Registrant and its executive officers (Non-PRC citizens)
(incorporated herein by reference to Exhibit 10.6 to the registration statement on Form F-1 (File No. 333-226822), as
amended, initially filed with the SEC on August 13, 2018)
Form of Employment Agreement, between the Registrant and its executive officers (PRC citizens) (incorporated
herein by reference to Exhibit 10.7 to the registration statement on Form F-1 (File No. 333-226822), as amended,
initially filed with the SEC on August 13, 2018)
Employment Agreement and Severance Agreement, between the Registrant and Padmasree Warrior, dated as of
November 23, 2015 and December 16, 2015, respectively (incorporated herein by reference to Exhibit 10.9 to the
registration statement on Form F-1 (File No. 333-226822), as amended, initially filed with the SEC on August 13,
2018)
English translation of Power of Attorney, dated as of April 12, 2021, executed by the shareholders of Beijing NIO,
Beijing NIO and Shanghai NIO (incorporated herein by reference to Exhibit 4.10 to the Company’s Report on Form
20-F (File No. 001-38638), filed with the SEC on April 29, 2022)
English translation of Loan Agreements, dated April 12, 2021, between shareholders of Beijing NIO and Shanghai
NIO (incorporated herein by reference to Exhibit 4.11 to the Company’s Report on Form 20-F (File No. 001-38638),
filed with the SEC on April 29, 2022)
English translation of Equity Pledge Agreements, dated as of April 12, 2021, among shareholders of Beijing NIO,
Beijing NIO and Shanghai NIO (incorporated herein by reference to Exhibit 4.12 to the Company’s Report on Form
20-F (File No. 001-38638), filed with the SEC on April 29, 2022)
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4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20†
4.21†
4.22
4.23
4.24
4.25
4.26
4.27
4.28
4.29
4.30
4.31
English translation of Exclusive Business Cooperation Agreement, dated as of April 12, 2021, between Beijing NIO
and Shanghai NIO (incorporated herein by reference to Exhibit 4.13 to the Company’s Report on Form 20-F (File
No. 001-38638), filed with the SEC on April 29, 2022)
English translation of Exclusive Option Agreements, dated as of April 12, 2021, among shareholders of Beijing
NIO, Beijing NIO and Shanghai NIO (incorporated herein by reference to Exhibit 4.14 to the Company’s Report on
Form 20-F (File No. 001-38638), filed with the SEC on April 29, 2022)
English translation of Confirmation and Undertaking Letters, dated as of April 12, 2021, executed by shareholders of
Beijing NIO (incorporated herein by reference to Exhibit 4.15 to the Company’s Report on Form 20-F (File No. 001-
38638), filed with the SEC on April 29, 2022)
English translation of Consent Letters, dated as of April 12, 2021, executed by the spouses of the shareholders of
Beijing NIO (incorporated herein by reference to Exhibit 4.16 to the Company’s Report on Form 20-F (File No. 001-
38638), filed with the SEC on April 29, 2022)
Indenture, dated as of February 4, 2019, by and between the Registrant, as issuer, and The Bank of New York
Mellon, as trustee (incorporated herein by reference to Exhibit 4.22 to the Company’s Report on Form 20-F (File
No. 001-38638), filed with the SEC on April 2, 2019)
Form of 4.50% Convertible Senior Notes due 2024 (included in Exhibit 4.20) (incorporated herein by reference to
Exhibit 4.22 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on April 2, 2019)
Deposit Agreement for Restricted Securities, dated as of February 4, 2019, among the Registrant, Deutsche Bank
Trust Company Americas, as the depositary, and all holders and beneficial owners of the American Depositary
Shares issued thereunder (incorporated herein by reference to Exhibit 4.24 to the Company’s Report on Form 20-F
(File No. 001-38638), filed with the SEC on April 2, 2019)
English translation of NIO ES6 Manufacture Cooperation Agreement, dated as of April 30, 2019, between the
registrant and Anhui Jianghuai Automobile Co., Ltd. (incorporated herein by reference to Exhibit 4.23 to the
Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
English translation of NIO Fury (EC6) Manufacture Cooperation Agreement, dated as of March 10, 2020, between
the registrant and Anhui Jianghuai Automobile Co., Ltd. (incorporated herein by reference to Exhibit 4.24 to the
Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Convertible Notes Subscription Agreement, dated September 4, 2019, between the Registrant and Huang River
Investment Limited (incorporated herein by reference to Exhibit 4.25 to the Company’s Report on Form 20-F (File
No. 001-38638), filed with the SEC on May 14, 2020)
Convertible Notes Subscription Agreement, dated September 4, 2019, between the Registrant and Serene View
Investment Limited (incorporated herein by reference to Exhibit 4.26 to the Company’s Report on Form 20-F (File
No. 001-38638), filed with the SEC on May 14, 2020)
Form of 0% Convertible Senior Notes due 2020 (included in Exhibit 4.22) (incorporated herein by reference to
Exhibit 4.25 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Form of 0% Convertible Senior Notes due 2022 (included in Exhibit 4.22) (incorporated herein by reference to
Exhibit 4.25 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Indenture, dated as of February 10, 2020, among the Registrant, The Bank of New York Mellon, London Branch, as
trustee, The Bank of New York Mellon, London Branch, as paying agent and conversion agent, and The Bank of
New York Mellon SA/NV, Luxembourg Branch, as registrar and transfer agent (incorporated herein by reference to
Exhibit 4.29 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Form of 0% Convertible Senior Notes due 2021 (included in Exhibit 4.26) (incorporated herein by reference to
Exhibit 4.29 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Indenture, dated as of February 19, 2020, among the Registrant, The Bank of New York Mellon, London Branch, as
trustee, The Bank of New York Mellon, London Branch, as paying agent and conversion agent, and The Bank of
New York Mellon SA/NV, Luxembourg Branch, as registrar and transfer agent (incorporated herein by reference to
Exhibit 4.31 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Form of 0% Convertible Senior Notes due 2021 (included in Exhibit 4.28) (incorporated herein by reference to
Exhibit 4.31 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Indenture, dated as of March 11, 2020, among the Registrant, The Bank of New York Mellon, London Branch, as
trustee, The Bank of New York Mellon, London Branch, as paying agent and conversion agent, and The Bank of
New York Mellon SA/NV, Luxembourg Branch, as registrar and transfer agent (incorporated herein by reference to
Exhibit 4.33 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
Form of 0% Convertible Senior Notes due 2021 (included in Exhibit 4.30) (incorporated herein by reference to
Exhibit 4.33 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
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4.32
4.33
4.34
4.35
4.36
4.37
4.38
4.39
4.40
4.41
4.42
4.43
4.44
4.45†
English translation of Investment Agreement, dated April 29, 2020, among Hefei Construction Investment Holdings
(Group) Co., Ltd., the Registrant, Nio Nextev Limited, NIO Power Express Limited, NIO (Anhui) Holding Co., Ltd.
and other parties thereto (incorporated herein by reference to Exhibit 4.35 to the Company’s Report on Form 20-F
(File No. 001-38638), filed with the SEC on May 14, 2020)
English translation of Shareholders’ Agreement, dated April 29, 2020, among Hefei Construction Investment
Holdings (Group) Co., Ltd., the Registrant, Nio Nextev Limited, NIO Power Express Limited, NIO (Anhui) Holding
Co., Ltd. and other parties thereto (incorporated herein by reference to Exhibit 4.36 to the Company’s Report on
Form 20-F (File No. 001-38638), filed with the SEC on May 14, 2020)
English translation of Amendment and Supplementary Agreement to Investment Agreement, dated May 29, 2020,
among Hefei Construction Investment Holdings (Group) Co., Ltd., the Registrant, Nio Nextev Limited, NIO Power
Express Limited, NIO (Anhui) Holding Co., Ltd. and other parties thereto (incorporated herein by reference to
Exhibit 99.1 to the Company’s Current Report on Form 6-K (File No. 001-38638), filed with the SEC on June 9,
2020)
English translation of Amendment and Supplementary Agreement to Shareholders’ Agreement, dated May 29, 2020,
among Hefei Construction Investment Holdings (Group) Co., Ltd., the Registrant, Nio Nextev Limited, NIO Power
Express Limited, NIO (Anhui) Holding Co., Ltd. and other parties thereto (incorporated herein by reference to
Exhibit 99.2 to the Company’s Current Report on Form 6-K (File No. 001-38638), filed with the SEC on June 9,
2020)
English translation of Amendment and Supplementary Agreement II to Investment Agreement, dated June 18, 2020,
among Hefei Construction Investment Holdings (Group) Co., Ltd., the Registrant, Nio Nextev Limited, NIO Power
Express Limited, NIO (Anhui) Holding Co., Ltd. and other parties thereto (incorporated herein by reference to
Exhibit 99.1 to the Company’s Current Report on Form 6-K (File No. 001-38638), filed with the SEC on June 30,
2020)
English translation of Amendment and Supplementary Agreement II to Shareholders’ Agreement, dated June 18,
2020, among Hefei Construction Investment Holdings (Group) Co., Ltd., the Registrant, Nio Nextev Limited, NIO
Power Express Limited, NIO (Anhui) Holding Co., Ltd. and other parties thereto (incorporated herein by reference
to Exhibit 99.2 to the Company’s Current Report on Form 6-K (File No. 001-38638), filed with the SEC on June 30,
2020)
English translation of Amendment and Supplementary Agreement III to the NIO China Shareholders Agreement,
dated September 16, 2020, among Hefei Construction Investment Holdings (Group) Co., Ltd., the Registrant, Nio
Nextev Limited, NIO Power Express Limited, NIO (Anhui) Holding Co., Ltd. and other parties thereto (incorporated
herein by reference to Exhibit 4.36 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC
on April 6, 2021)
English translation of Amendment and Supplementary Agreement IV to the NIO China Shareholders Agreement,
dated September 25, 2020, among Hefei Construction Investment Holdings (Group) Co., Ltd., the Registrant, Nio
Nextev Limited, NIO Power Express Limited, NIO (Anhui) Holding Co., Ltd. and other parties thereto (incorporated
herein by reference to Exhibit 4.37 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC
on April 6, 2021)
English translation of Amendment and Supplementary Agreement V to the NIO China Shareholders Agreement,
dated January 26, 2021, among Hefei Construction Investment Holdings (Group) Co., Ltd., the Registrant, Nio
Nextev Limited, NIO Power Express Limited, NIO (Anhui) Holding Co., Ltd. and other parties thereto (incorporated
herein by reference to Exhibit 4.38 to the Company’s Report on Form 20-F (File No. 001-38638), filed with the SEC
on April 6, 2021)
Indenture, dated as of January 15, 2021, by and between the Registrant, as issuer, and Deutsche Bank Trust
Company Americas, as trustee, constituting US$750 million 0.00% Convertible Senior Notes due 2026
(incorporated herein by reference to Exhibit 4.39 to the Company’s Report on Form 20-F (File No. 001-38638), filed
with the SEC on April 6, 2021)
Form of 0.00% Convertible Senior Notes due 2026 (included in Exhibit 4.41)
Indenture, dated as of January 15, 2021, by and between the Registrant, as issuer, and Deutsche Bank Trust
Company Americas, as trustee, constituting US$750 million 0.50% Convertible Senior Notes due 2027
(incorporated herein by reference to Exhibit 4.41 to the Company’s Report on Form 20-F (File No. 001-38638), filed
with the SEC on April 6, 2021)
Form of 0.50% Convertible Senior Notes due 2027 (included in Exhibit 4.43)
English translation of Renewal Joint Manufacturing Agreement, by and between the Registrant, Anhui Jianghuai
Automobile Co., Ltd. and Jianglai Advanced Manufacturing Technology (Anhui) Co., Ltd., dated May 22, 2021
(incorporated herein by reference to Exhibit 4.45 to the Company's Report on Form 20-F (File No. 001-38638), filed
with the SEC on April 29, 2022)
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Table of Contents
4.46*†
4.47*
4.48*
4.49*
4.50*
4.51*
4.52*
4.53*
4.54*
4.55*
4.56*
4.57*
4.58*
4.59*
4.60*
4.61*
8.1*
11.1
12.1*
12.2*
13.1**
13.2**
15.1*
15.2*
101.INS*
101.SCH*
101.CAL*
101.DEF*
101.LAB*
101.PRE*
104*
English translation of Manufacturing Cooperation Agreement, by and among NIO Technology (Anhui) Co., Ltd.,
NIO (Anhui) Co., Ltd., and Anhui Jianghuai Automobile Co., Ltd. dated September 2022
English translation of NIO Park (Phase I) Assets Transfer Agreement and its supplementary agreement, each dated
December 23, 2022, executed by and between NIO (Anhui) Co., Ltd. and Anhui Jianghuai Automobile Co., Ltd.
English translation of Power of Attorney, dated November 30, 2022, executed by the shareholders of Anhui NIO AT,
Anhui NIO AT and Anhui NIO AD.
English translation of Loan Agreements, dated November 30, 2022, between shareholders of Anhui NIO AT and
Anhui NIO AD
English translation of Equity Pledge Agreements, dated November 30, 2022, among shareholders of Anhui NIO AT,
Anhui NIO AT and Anhui NIO AD
English translation of Exclusive Business Cooperation Agreement, dated November 30, 2022, between Anhui NIO
AT and Anhui NIO AD
English translation of Exclusive Option Agreements, dated November 30, 2022, among shareholders of Anhui NIO
AT, Anhui NIO AT and Anhui NIO AD
English translation of Confirmation and Undertaking Letters, dated November 30, 2022, executed by shareholders of
Anhui NIO AT
English translation of Consent Letters, dated November 30, 2022, executed by the spouses of the shareholders of
Anhui NIO AT
English translation of Power of Attorney, dated December 12, 2022, executed by the shareholders of Anhui NIO DT,
Anhui NIO DT and NIO China
English translation of Loan Agreements, dated December 12, 2022, between shareholders of Anhui NIO DT and
NIO China
English translation of Equity Pledge Agreements, dated December 12, 2022, among shareholders of Anhui NIO DT,
Anhui NIO DT and NIO China
English translation of Exclusive Business Cooperation Agreement, dated December 12, 2022, between Anhui NIO
DT and NIO China
English translation of Exclusive Option Agreements, dated December 12, 2022, among shareholders of Anhui NIO
DT, Anhui NIO DT and NIO China
English translation of Confirmation and Undertaking Letters, dated December 12, 2022, executed by shareholders of
Anhui NIO DT
English translation of Consent Letters, dated December 12, 2022, executed by the spouses of the shareholders of
Anhui NIO DT
List of Principal Subsidiaries and Consolidated Variable Interest Entities
Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the
registration statement on Form F-1 (File No. 333-226822), as amended, initially filed with the SEC on August 13,
2018)
CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Consent of PricewaterhouseCoopers Zhong Tian LLP
Consent of Han Kun Law Offices
Inline XBRL Instance Document—this instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Definition Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith.
** Furnished herewith.
175
Table of Contents
† Confidential treatment has been requested for certain portions of this exhibit pursuant to Rule 406 under the Securities Act and
Division of Corporation Finance Staff Legal Bulletin No. 1. In accordance with Rule 406 and Staff Legal Bulletin No. 1, these
confidential portions have been omitted and filed separately with the SEC.
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its behalf.
Date: April 28, 2023
NIO Inc.
By: /s/ Bin Li
Name: Bin Li
Title: Chairman of the Board of Directors
and Chief Executive Officer
176
Table of Contents
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID: 1424)
Consolidated Balance Sheets as of December 31, 2021 and 2022
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2020, 2021 and 2022
Consolidated Statements of Shareholders’ (Deficit)/Equity for the Years Ended December 31, 2020, 2021 and 2022
Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2021 and 2022
Notes to Consolidated Financial Statements
Page
F-2
F-4
F-6
F-7
F-10
F-11
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of NIO Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of NIO Inc. and its subsidiaries (the “Company”) as of December 31,
2022 and 2021, and the related consolidated statements of comprehensive loss, of shareholders’ (deficit)/equity and of cash flows for
each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated
financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022,
based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for current
expected credit losses on certain financial instruments in 2020.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's
Annual Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are
a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error
or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
F-2
Table of Contents
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Accrual of warranty liabilities
As described in Notes 2(p), 11 and 13 to the consolidated financial statements, the Company provides warranty to its customers for all
new vehicles it sold. For the year ended December 31, 2022, the Company accrued warranty costs of RMB1,128.9 million. As of
December 31, 2022, the Company recorded warranty liabilities of RMB2,946.9 million. The warranty cost is accrued based on the
Company’s assumptions related to the nature and frequency of future claims and the estimate of the projected costs to repair or replace
items under warranty. These estimates are based on actual claims incurred to date and an estimate of the nature, frequency and costs of
future claims.
The principal considerations for our determination that performing procedures relating to the accrual of warranty liabilities is a critical
audit matter are the significant judgment by management and estimates used in determining the accrual of warranty liabilities; this in turn
led to significant auditor judgment, subjectivity, and effort in designing and performing procedures relating to evaluating the
reasonableness of management’s estimate of the nature, frequency and costs of future claims, and the audit effort involved the use of
professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on
the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s estimate
of the accrual of warranty liabilities, including controls over management’s estimate of the nature, frequency and costs of future claims as
well as the completeness and accuracy of actual claims incurred to date. These procedures also included, among others, testing
management’s process for determining the accrual of warranty liabilities by (a) evaluating the appropriateness of the model applied by
management for the accrual of warranty liabilities; (b) evaluating the reasonableness of significant assumptions related to the nature and
frequency of future claims and the related projected costs to repair or replace items under warranty, considering current and past
performance, including a lookback analysis comparing prior period forecasted claims to actual claims incurred; and (c) testing the
completeness, accuracy and relevance of management’s data used in the estimation of future claims. These procedures also included
developing an independent estimate of the accrual of warranty liabilities and comparing this estimate to management’s estimate to
evaluate its reasonableness. Professionals with specialized skill and knowledge were used to assist in developing an independent estimate
of the accrual of warranty liabilities.
/s/PricewaterhouseCoopers Zhong Tian LLP
Shanghai, the People’s Republic of China
April 28, 2023
We have served as the Company’s auditor since 2015.
F-3
Table of Contents
NIO INC.
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share and per share data)
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash
Short-term investments
Trade and notes receivables, net (Allowance for expected credit losses of RMB25.4 million and
RMB39.6 million, respectively)
Amounts due from related parties, net (Allowance for expected credit losses of RMB12.7 million and
RMB6.7 million, respectively)
Inventory
Prepayments and other current assets, net (Allowance for expected credit losses of RMB3.9 million and
RMB4.0 million, respectively)
Total current assets
Non-current assets:
Long-term restricted cash
Property, plant and equipment, net
Land use rights, net
Long-term investments
Right-of-use assets – operating lease
Other non-current assets, net (Allowance for expected credit losses of RMB49.3 million and RMB89.6
million, respectively)
Total non-current assets
Total assets
LIABILITIES
Current liabilities:
Short-term borrowings
Trade and notes payable
Amounts due to related parties
Taxes payable
Current portion of operating lease liabilities
Current portion of long-term borrowings
Accruals and other liabilities
Total current liabilities
Non-current liabilities:
Long-term borrowings
Non-current operating lease liabilities
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Commitments and contingencies (Note 27)
F-4
2021
RMB
As of December 31,
2022
RMB
2022
USD
Note 2(e)
15,333,719
2,994,408
37,057,554
19,887,575
3,154,240
19,171,017
2,883,427
457,322
2,779,536
2,797,805
5,118,170
742,065
1,551,334
2,056,352
1,380,956
8,191,386
200,220
1,187,639
1,850,143
63,641,315
2,246,408
59,149,752
325,699
8,575,908
46,437
7,399,516
199,121
3,059,383
2,988,374
113,478
15,658,666
212,603
6,356,411
7,374,456
16,453
2,270,293
30,825
921,593
1,069,196
5,549,455
19,242,286
82,883,601
7,398,559
37,114,173
96,263,925
1,072,690
5,381,050
13,956,958
5,230,000
12,638,991
687,200
627,794
744,561
2,067,962
7,201,644
29,198,152
9,739,176
2,317,193
25,199
3,540,458
15,622,026
44,820,178
4,039,210
25,223,687
384,611
286,300
1,025,968
1,237,916
13,654,362
45,852,054
10,885,799
6,517,096
218,189
5,144,027
22,765,111
68,617,165
585,630
3,657,091
55,763
41,510
148,751
179,481
1,979,700
6,647,926
1,578,292
944,890
31,634
745,814
3,300,630
9,948,556
Table of Contents
NIO INC.
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share and per share data)
MEZZANINE EQUITY
Redeemable non-controlling interests
Total mezzanine equity
SHAREHOLDERS’ EQUITY
Class A Ordinary Shares (US$0.00025 par value; 2,500,000,000 and 2,632,030,222
shares authorized; 1,384,955,501 and 1,531,720,892 shares issued; 1,366,875,248 and
1,513,659,868 shares outstanding as of December 31, 2021 and 2022, respectively)
Class B Ordinary Shares (US$0.00025 par value; 132,030,222 shares and nil
authorized, 128,293,932 shares issued and outstanding as of December 31, 2021 and nil
issued and outstanding as of December 31,2022)
Class C Ordinary Shares (US$0.00025 par value; 148,500,000 shares authorized, issued
and outstanding as of December 31, 2021 and 2022)
Less: Treasury shares (18,080,253 and 18,061,024) shares as of December 31, 2021 and
2022, respectively)
Additional paid in capital
Accumulated other comprehensive (loss)/income
Accumulated deficit
2021
RMB
As of December 31,
2022
RMB
2022
USD
Note 2(e)
3,277,866
3,277,866
3,557,221
3,557,221
515,747
515,747
2,418
2,668
387
220
254
—
254
—
37
(1,849,600)
92,467,072
(276,300)
(55,634,140)
(1,849,600)
94,593,062
1,036,011
(69,914,230)
(268,167)
13,714,705
150,208
(10,136,611)
Total NIO Inc. shareholders’ equity
34,709,924
23,868,165
3,460,559
Non-controlling interests
Total shareholders’ equity
75,633
221,374
32,096
34,785,557
24,089,539
3,492,655
Total liabilities, mezzanine equity and shareholders’ equity
82,883,601
96,263,925
13,956,958
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
NIO INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(All amounts in thousands, except for share and per share data)
Revenue:
Vehicle sales
Other sales
Total revenues
Cost of sales:
Vehicle sales
Other sales
Total cost of sales
Gross profit
Operating expenses:
Research and development
Selling, general and administrative
Other operating (loss)/income, net
Total operating expenses
Loss from operations
Interest and investment income
Interest expenses
Gain on extinguishment of debt
Share of (loss)/income of equity investees
Other (loss)/income, net
Loss before income tax expense
Income tax expense
Net loss
Accretion on redeemable non-controlling interests to redemption value
Net loss attributable to non-controlling interests
Net loss attributable to ordinary shareholders of NIO Inc.
Net loss
Other comprehensive income/(loss)
Change in unrealized gains related to available-for-sale debt securities, net of
tax
Foreign currency translation adjustment, net of nil tax
Total other comprehensive income/(loss)
Total comprehensive loss
Accretion on redeemable non-controlling interests to redemption value
Net loss attributable to non-controlling interests
Other comprehensive income attributable to non-controlling interests
Comprehensive loss attributable to ordinary shareholders of NIO Inc
Weighted average number of ordinary shares used in computing net loss
per share
Basic and diluted
Net loss per share attributable to ordinary shareholders
Basic and diluted
Weighted average number of ADS used in computing net loss per ADS
Basic and diluted
Net loss per ADS attributable to ordinary shareholders
Basic and diluted
For the Year Ended December 31,
2020
RMB
2021
RMB
2022
RMB
15,182,522
1,075,411
16,257,933
33,169,740
2,966,683
36,136,423
45,506,581
3,761,980
49,268,561
(13,255,770)
(1,128,744)
(14,384,514)
1,873,419
(2,487,770)
(3,932,271)
(61,023)
(6,481,064)
(4,607,645)
166,904
(426,015)
—
(66,030)
(364,928)
(5,297,714)
(6,368)
(5,304,082)
(311,670)
4,962
(5,610,790)
(5,304,082)
—
137,596
137,596
(5,166,486)
(311,670)
4,962
—
(5,473,194)
(26,516,643)
(2,798,347)
(29,314,990)
6,821,433
(4,591,852)
(6,878,132)
152,248
(11,317,736)
(4,496,303)
911,833
(637,410)
—
62,510
184,686
(3,974,684)
(42,265)
(4,016,949)
(6,586,579)
31,219
(10,572,309)
(4,016,949)
24,224
(230,345)
(206,121)
(4,223,070)
(6,586,579)
31,219
(4,727)
(10,783,157)
(39,271,801)
(4,852,767)
(44,124,568)
5,143,993
(10,836,261)
(10,537,119)
588,728
(20,784,652)
(15,640,659)
1,358,719
(333,216)
138,332
377,775
(282,952)
(14,382,001)
(55,103)
(14,437,104)
(279,355)
157,014
(14,559,445)
(14,437,104)
746,336
717,274
1,463,610
(12,973,494)
(279,355)
157,014
(151,299)
(13,247,134)
2022
USD
Note 2(e)
6,597,834
545,436
7,143,270
(5,693,876)
(703,585)
(6,397,461)
745,809
(1,571,110)
(1,527,739)
85,358
(3,013,491)
(2,267,682)
196,996
(48,312)
20,056
54,772
(41,024)
(2,085,194)
(7,989)
(2,093,183)
(40,503)
22,765
(2,110,921)
(2,093,183)
108,209
103,995
212,204
(1,880,979)
(40,503)
22,765
(21,936)
(1,920,653)
1,182,660,948
1,572,702,112
1,636,999,280
1,636,999,280
(4.74)
(6.72)
(8.89)
(1.29)
1,182,660,948
1,572,702,112
1,636,999,280
1,636,999,280
(4.74)
(6.72)
(8.89)
(1.29)
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Table of Contents
NIO INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) / EQUITY
(All amounts in thousands, except for share and per share data)
Ordinary Shares
Shares
Par Value Shares
Treasury Shares
Additional
Paid in
Amount Capital
Accumulated
Other
Comprehensive Accumulated
Total
Non-
Shareholders’ Controlling Total (Deficit)/
Loss
Deficit
(Deficit)/Equity Interests
Equity
Balance as of
December
31, 2019
Cumulative
effect of
adoption of
new
accounting
standard
(Note 2(i))
Accretion on
redeemable
non-
controlling
interests to
redemption
value
Issuance of
ordinary
shares
Issuance of
restricted
shares
Conversion of
convertible
notes to
ordinary
shares
Exercise of
share options
Share based
compensation
of the
restricted
shares
Share based
compensation
of the share
options
Cancellation of
restricted
shares
Capital
withdrawal
by non-
controlling
interests
Foreign
currency
translation
adjustment
Net loss
Balance as of
December
31, 2020
1,067,467,877
1,827
(2,995,217)
— 40,227,856
(203,048)
(46,326,321)
(6,299,686)
22,087
(6,277,599)
—
—
—
—
—
—
(22,969)
(22,969)
—
(22,969)
—
262,775,000
2,113,469
181,872,811
14,814,462
—
448
4
309
91
—
—
—
—
(311,670)
— 34,571,809
—
54,508
—
— 3,962,990
439,038
—
187,427
—
—
(12,516)
—
—
—
—
51,948
—
—
—
—
—
—
12,516
—
—
—
—
—
—
—
—
—
9,551
177,543
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(311,670)
34,572,257
54,512
3,963,299
187,518
9,551
177,543
—
—
—
—
—
—
—
—
—
(311,670)
34,572,257
54,512
3,963,299
187,518
9,551
177,543
—
—
(15,000)
(15,000)
137,596
—
—
(5,299,120)
137,596
(5,299,120)
—
(4,962)
137,596
(5,304,082)
1,529,031,103
2,679
(2,491,715)
— 78,880,014
(65,452)
(51,648,410)
27,168,831
2,125
27,170,956
F-7
Table of Contents
NIO INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(All amounts in thousands, except for share and per share data)
Ordinary Shares
Shares
Par value
Treasury Shares
Additional
Paid in
Amount Capital
Shares
Accumulated
Other
Total
Non-
Comprehensive Accumulated Shareholders’ Controlling
Loss
Deficit
Equity
Total
Interests Equity
Balance as of
December 31,
2020
Accretion on
redeemable
non-
controlling
interests to
redemption
value
Settlement of
capped call
options and
zero strike call
options (Note
12(ii))
Conversion of
convertible
senior notes to
ordinary shares
- related
parties
Conversion of
convertible
senior notes to
ordinary shares
-third party
Capital injection
from non-
controlling
interests
Shareholder’s
contribution
(Note 9)
Issuance of
ordinary shares
Exercise of share
options
Share based
compensation
of the
restricted
shares
Issuance of
restricted
shares (Note
23(a)(ii))
Share based
compensation
of the share
options
Cancellation of
restricted
shares
Foreign currency
translation
adjustment
Change in fair
value of
available-for-
sale debt
securities
(Note 9)
Net loss
Balance as of
December 31,
2021
1,529,031,103
2,679
(2,491,715)
— 78,880,014
(65,452)
(51,648,410)
27,168,831
2,125
27,170,956
—
—
—
— (6,586,579)
—
— (16,402,643)
(1,849,600)
1,849,600
7,219,872
12
62,508,996
101
—
—
53,292,401
8,891,011
842,742
549,376
—
(586,068)
—
—
—
—
—
85
14
1
—
—
—
—
—
—
—
—
—
—
—
—
148,381
—
4,199,718
—
—
—
18,535
— 12,677,469
228,037
—
120,925
—
—
—
586,068
—
—
—
—
457,985
—
148,869
—
—
—
—
—
552,155
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(230,345)
—
(6,586,579)
— (6,586,579)
—
—
—
—
—
148,393
—
148,393
—
4,199,819
— 4,199,819
—
—
—
—
—
—
—
—
—
—
100,000
100,000
18,535
—
18,535
12,677,554
— 12,677,554
120,939
—
120,939
457,986
—
457,986
148,869
—
148,869
552,155
—
(230,345)
—
—
—
552,155
—
(230,345)
19,497
—
—
(3,985,730)
19,497
(3,985,730)
4,727
(31,219)
24,224
(4,016,949)
1,661,749,433
2,892
(18,080,253)
(1,849,600)
92,467,072
(276,300)
(55,634,140)
34,709,924
75,633
34,785,557
F-8
Table of Contents
NIO INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(All amounts in thousands, except for share and per share data)
Balance as of
December 31,
2021
Accretion on
redeemable
non-
controlling
interests to
redemption
value
Conversion of
convertible
senior notes to
ordinary
shares -
related parties
Conversion of
convertible
senior notes to
ordinary
shares - third
party
Distributions to
non-
controlling
interests
Transactions
with non-
controlling
interests (Note
22)
Exercise of
share options
Share based
compensation
of the
restricted
shares
Share based
compensation
of the share
options
Foreign
currency
translation
adjustment
Change in fair
value of
available-for-
sale debt
securities
(Note 9)
Net loss
Balance as of
December 31,
2022
Ordinary Shares
Shares
Par value
Treasury Shares
Additional
Paid in
Amount Capital
Shares
Accumulated
Other
Total
Non-
Comprehensive Accumulated Shareholders’ Controlling
(Loss)/Income
Deficit
Equity
Total
Interests Equity
1,661,749,433
2,892
(18,080,253)
(1,849,600)
92,467,072
(276,300)
(55,634,140)
34,709,924
75,633
34,785,557
—
—
—
—
(279,355)
8,805,770
15
—
—
207,457
172,631
—
—
4,514,461
4,978,597
—
—
—
—
—
—
—
7
8
—
—
—
—
—
—
—
—
—
10,450
—
—
(184,085)
19,229
75,627
— 1,863,412
—
432,484
—
—
717,274
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(279,355)
—
(279,355)
—
207,472
—
207,472
—
—
—
—
10,450
—
10,450
—
(32,629)
(32,629)
(184,085)
184,085
—
75,634
—
75,634
—
1,863,420
—
1,863,420
—
—
432,484
—
432,484
717,274
—
717,274
—
—
—
—
595,037
—
— (14,280,090)
595,037
(14,280,090)
151,299
(157,014)
746,336
(14,437,104)
1,680,220,892
2,922
(18,061,024)
(1,849,600)
94,593,062
1,036,011
(69,914,230)
23,868,165
221,374
24,089,539
F-9
Table of Contents
NIO INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands, except for share and per share data)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:
Depreciation and amortization
Expected credit loss expense
Inventory write-downs
Impairment on long-term assets
Foreign exchange loss
Share-based compensation expenses
Interest and investment income
Gain on extinguishment of debt
Share of loss/(income) of equity investees, net of tax
Amortization of right-of-use assets
Loss on disposal of property, plant and equipment
Changes in operating assets and liabilities:
Prepayments and other current assets
Inventory
Other non-current assets
Amount due from related parties
Operating lease liabilities
Taxes payable
Trade and notes receivable
Trade and notes payable
Accruals and other liabilities
Amount due to related parties
Deferred tax liabilities
Other non-current liabilities
Net cash provided by/(used in)operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment, land use rights and intangible assets
Proceeds from disposal of property, plant and equipment
Purchases of short-term investments
Proceeds from sale of short-term investments
Purchase of available-for-sale debt investment
Proceeds from disposal of available-for-sale debt investment
Acquisitions of equity investees
Proceeds from disposal of equity investees
Purchase of held to maturity debt investments
Loan repayment from related parties
Net cash(used in)/provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options
Capital withdrawal by non-controlling interests
Distributions to non-controlling interests
Capital injection from redeemable non-controlling interests
Capital injection from non-controlling interests
Redemption and repurchase of redeemable non-controlling interests
Proceeds from issuance of convertible promissory note - third parties
Proceeds from issuance of convertible promissory note - related parties
Proceeds from borrowings from third parties
Repayments of borrowings from third parties
Proceeds from borrowings from related parties
Repayment of borrowings from related parties
Principal payments on finance leases
Proceeds from issuance of ordinary shares, net of issuance costs
Net cash provided by/(used in) financing activities
Effects of exchange rate changes on cash, cash equivalents and restricted cash
NET INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash, cash equivalents and restricted cash at beginning of the year
Cash, cash equivalents and restricted cash at end of the year
NON-CASH INVESTING AND FINANCING ACTIVITIES
Accruals related to purchase of property, plant and equipment
Issuance of restricted shares (Note 23(a)(ii))
Conversion of convertible senior notes to ordinary shares
Accretion on redeemable non-controlling interests to redemption value
Settlement of capped call options and zero strike call options (Note 12(ii))
Shareholder’s contribution (Note 9)
Supplemental Disclosure
Interest paid
Income taxes paid
For the Year Ended December 31,
2020
RMB
2021
RMB
2022
RMB
2022
USD
Note 2(e)
(5,304,082)
(4,016,949)
(14,437,104)
(2,093,183)
1,046,496
9,654
5,803
25,757
457,382
187,094
—
—
66,030
499,225
127,662
135,441
(197,828)
151,953
(119,128)
(448,466)
130,542
237,928
3,256,552
836,511
60,673
—
785,695
1,950,894
(1,127,686)
163,072
(7,594,110)
3,738,490
—
—
(250,826)
—
—
—
(5,071,060)
154,861
(10,500)
—
5,000,000
—
(2,071,515)
3,014,628
90,499
1,605,464
(964,813)
260,000
(285,799)
(42,529)
34,607,139
41,357,435
(682,040)
37,555,229
989,869
38,545,098
749,799
54,512
3,963,299
311,670
—
—
333,877
13,172
1,708,019
54,332
1,105
—
10,111
1,010,140
(105,608)
—
(62,510)
643,895
31,107
(38,908)
(990,550)
(3,705,762)
(1,444,122)
(748,799)
446,984
(1,717,747)
6,260,311
2,485,101
342,597
25,199
1,778,440
1,966,386
(4,078,764)
1,126
(134,316,219)
101,121,723
(650,000)
—
(592,570)
—
(1,300,000)
50,000
(39,764,704)
144,562
(1,000)
—
—
100,000
(8,000,000)
9,560,755
—
6,112,000
(2,432,255)
—
—
(32,873)
12,677,554
18,128,743
(500,959)
(20,170,534)
38,545,098
18,374,564
1,458,767
148,869
4,348,212
6,586,579
1,849,600
18,535
218,830
6,007
2,852,315
48,707
148,729
35,011
282,888
2,295,896
(174,854)
(138,332)
(377,775)
1,141,740
12,807
(1,239,921)
(6,257,514)
(1,849,518)
167,692
(1,016,571)
(341,592)
(2,303,364)
11,650,850
4,119,375
(299,339)
192,990
1,620,876
(3,866,008)
(6,972,854)
3,622
(87,631,686)
106,658,218
(120,000)
270,000
(279,043)
286,760
(1,830,000)
—
10,385,017
78,726
(3,250)
(32,629)
—
—
—
—
—
6,918,564
(8,550,306)
—
—
(27,489)
—
(1,616,384)
(121,896)
4,780,729
18,374,564
23,155,293
4,172,758
—
217,922
279,355
—
—
274,347
77,187
413,547
7,062
21,564
5,076
41,015
332,874
(25,351)
(20,056)
(54,772)
165,537
1,857
(179,772)
(907,254)
(268,155)
24,313
(147,389)
(49,526)
(333,956)
1,689,214
597,253
(43,400)
27,981
235,005
(560,516)
(1,010,969)
525
(12,705,400)
15,463,988
(17,398)
39,146
(40,457)
41,576
(265,325)
—
1,505,686
11,414
(471)
(4,731)
—
—
—
—
—
1,003,097
(1,239,678)
—
—
(3,986)
—
(234,355)
(17,674)
693,141
2,664,061
3,357,202
604,993
—
31,596
40,503
—
—
39,777
11,191
The accompanying notes are an integral part of these consolidated financial statements.
F-10
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
1. Organization and Nature of Operations
NIO Inc. (“NIO”, or the “Company”) was incorporated under the laws of the Cayman Islands in November 2014, as an exempted
company with limited liability. The Company was formerly known as NextCar Inc.. It changed its name to NextEV Inc. in December
2014, and then changed to NIO Inc. in July 2017. The Company, its subsidiaries and consolidated variable interest entities (the “VIEs”)
are collectively referred to as the “Group”.
The Group designs and develops electric vehicles and jointly manufactures its vehicles through strategic collaboration with other
Chinese vehicle manufacturers. The Group also offers power solutions and comprehensive value-added services to its users. As of
December 31, 2022, the Group’s primary operations are conducted in the People’s Republic of China (the “PRC”) and the Company’s
principal subsidiaries and VIEs are as follows:
Subsidiaries
NIO Nextev Limited (“NIO HK”) (formerly known as Nextev Limited)
NIO GmbH (formerly known as NextEV GmbH)
NIO Co., Ltd. (“NIO SH”) (formerly known as NextEV Co., Ltd.)
NIO USA, Inc. (“NIO US”) (formerly known as NextEV USA, Inc.)
XPT Limited (“XPT”)
XPT (Jiangsu) Investment Co., Ltd. (“XPT Jiangsu”)
Shanghai XPT Technology Limited
XPT (Nanjing) E-Powertrain Technology Co., Ltd. (“XPT NJEP”)
XPT (Nanjing) Energy Storage System Co., Ltd. (“XPT NJES”)
NIO Power Express Limited (“PE HK)
NIO User Enterprise Limited (“UE HK”)
NIO Sales and Services Co., Ltd. (“UE CNHC”) (formerly known as Shanghai
NIO Sales and Service Co., Ltd. )
NIO Energy Investment (Hubei) Co., Ltd. (“PE CNHC”)
Wuhan NIO Energy Co., Ltd. (“PE WHJV”)
NIO Holding Co., Ltd. (“NIO China”) (formerly known as NIO (Anhui) Holding
Co., Ltd.) (Note (a))
XPT (Jiangsu) Automotive Technology Co., Ltd. (“XPT AUTO”)
NIO Financial Leasing Co., Ltd. (“NIO Leasing”)
NIO (Anhui) Co., Ltd. (“NIO AH”)
NIO Technology (Anhui) Co., Ltd. (“NIO R&D”)
NIO Nextev Europe Holding B.V.(“NIO NL”)
NEU Battery Asset Co., Ltd. (“BAC Cayman”)
Instant Power Europe B.V. (“BAC NL”) Co., Limited
NEU Battery Asset (Hong Kong) Co.Limited (“BAC HK”)
NIO AI Technology Limited (“NIO AI Technology”)
NIO AI Technology Limited
Anhui NIO Autonomous Driving Technology Co., Ltd. (“Anhui NIO AD”)
XTRONICS (Nanjing) Automotive Intelligent Technologies Co. Ltd. (“XPT
NJWL”) (Note (b))
Equity
interest held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Place and Date of incorporation
or date of acquisition
Hong Kong, February 2015
Germany, May 2015
Shanghai, PRC, May 2015
United States, November 2015
Hong Kong, December 2015
Jiangsu, PRC, May 2016
Shanghai, PRC, May 2016
Nanjing, PRC, July 2016
Nanjing, PRC, October 2016
Hong Kong, January 2017
Hong Kong, February 2017
Principal activities
Investment holding
Design and technology development
Headquarter and technology development
Technology development
Investment holding
Investment holding
Technology development
Manufacturing of E-Powertrain
Manufacturing of battery
Investment holding
Investment holding
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
96.970%
96.970%
96.970%
Shanghai, PRC, March 2017
Wuhan PRC, April 2017
Wuhan, PRC, May 2017
Investment holding and sales and after sales management
Investment holding
Investment holding
Anhui, PRC, November 2017
Nanjing, PRC, May 2018
Shanghai, PRC, August 2018
Anhui, PRC, August 2020
Anhui, PRC, August 2020
Netherlands, December 2020
Cayman Islands, May 2021
Netherlands, June 2021
Hong Kong, July 2021
Cayman Islands, March 2021
Hong Kong, May 2021
Anhui, PRC, June 2021
Headquarter and technology development
Investment holding
Financial Leasing
Industrialization and technology development
Design and technology development
Investment holding
Investment holding
Battery Subscription Service
Investment holding
Investment holding
Investment holding
Technology development
50%
Nanjing, PRC, June 2017
Manufacturing of components
VIEs
Prime Hubs Limited (“Prime Hubs”)
Beijing NIO Network Technology Co., Ltd. (“Beijing NIO”)
Anhui NIO AI Technology Co., Ltd. (“Anhui NIO AT”)
Anhui NIO Data Technology Co., Ltd. (“Anhui NIO DT”)
Place and Date of incorporation
or date of acquisition
BVI, October 2014
Beijing, PRC, July 2017
Anhui, PRC, April 2021
Anhui, PRC, October 2022
F-11
Table of Contents
Note (a) - NIO China
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
As of December 31, 2021 and 2022, the Company held 92.114% of total paid-in capital of NIO China. In accordance with NIO
China’s share purchase agreement, the redemption of the non-controlling interests is at the holders of non-controlling interests’ option
and is upon the occurrence of the events that are not solely within the control of the Company. Therefore, these redeemable non-
controlling interests in NIO China were classified as mezzanine equity and are subsequently accreted to the redemption price using the
agreed interest rate as a reduction of additional paid in capital (Note 20). With the redemption feature of the non-controlling interests, the
Company is considered to effectively have 100% equity interest of NIO China as of December 31, 2021 and 2022.
Note (b) - XPT NJWL
In accordance with the Article of Association of XPT NJWL, the Company has the power to control the board of directors of XPT
NJWL to unilaterally govern the financial and operating policies of XPT NJWL, and the non-controlling shareholder does not have
substantive participating rights. As a result, the Group consolidates XPT NJWL.
Variable interest entities
Prime Hubs
In October 2014, Prime Hubs, a British Virgin Islands (“BVI”) incorporated company, was established by Li Bin, the shareholder of
the Group, to facilitate the adoption of the Company’s employee stock incentive plans on behalf of the Company. The Company entered
into a management agreement with Prime Hubs and Li Bin. The agreement enables the Company to direct the activities that most
significantly impact Prime Hubs’s economic performance and enable the Company to obtain substantially all of the economic benefits
arising from Prime Hubs. As of December 31, 2021 and 2022, Prime Hubs held 4,250,002 Class A Ordinary Shares of the Company,
respectively, other than which, Prime Hubs did not have any operations, nor any material assets or liabilities. All restricted shares granted
under the Company’s Prime Hubs Restricted Shares Plan have been fully vested.
Beijing NIO
In April 2018, the Group entered into a series of contractual arrangements with Beijing NIO and its individual shareholders (the
“Nominee Shareholders”), including, among others, an exclusive business cooperation agreement, a loan agreement, an equity pledge
agreement, an exclusive call option agreement and a power of attorney, which enable the Company to direct the activities that most
significantly impact Beijing NIO’s economic performance and obtain substantially all of the economic benefits arising from Beijing NIO.
Management concluded that Beijing NIO is a variable interest entity and the Company is the ultimate primary beneficiary of Beijing NIO
and hence consolidates the financial results of Beijing NIO. The Group operates value-added telecommunication services, including
without limitation, performing internet information services, as well as holding certain related licenses, through Beijing NIO. For the
years ended December 31, 2020, 2021 and 2022, the financial position, result of operations and cash flow activities of Beijing NIO were
immaterial to the consolidated financial statements.
F-12
Table of Contents
Anhui NIO AT
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
In April 2021, Anhui NIO AT, was established by individual shareholders (the “Nominee Shareholders”). Anhui NIO AD entered
into a management agreement with Nominee Shareholders. The agreement enables the Company to direct the activities that most
significantly impact Anhui NIO AT’s economic performance, and enabled the Company to obtain substantially all of the economic
benefits arising from them. Management concluded that Anhui NIO AT is a variable interest entity and the Company is the ultimate
primary beneficiary of Anhui NIO AT and hence consolidates the financial results of Anhui NIO AT. In November 2022, concurrent with
the termination of the said management agreement, the Group entered into a series of contractual arrangements with the Nominee
Shareholders as well as Anhui NIO AT, including, among others, an exclusive business cooperation agreement, a loan agreement, an
equity pledge agreement, an exclusive call option agreement and a power of attorney. These agreements enable the Company to direct the
activities that most significantly impact Anhui NIO AT’s economic performance and enable the Company to obtain substantially all of
the economic benefits arising from Anhui NIO AT. Management concluded that Anhui NIO AT continues to be a variable interest entity
and the Company remains as the ultimate primary beneficiary of Anhui NIO AT. Therefore, the Group continues to consolidate the
financial results of Anhui NIO AT’s financial statements. The Group intends to obtain requisite licenses for certain supporting functions
during the development of autonomous driving technology through Anhui NIO AT. For the years ended December 31, 2021 and 2022,
the financial position, result of operations and cash flow activities of Anhui NIO AT were immaterial to the consolidated financial
statements.
Anhui NIO DT
In October 2022, the Group entered into a series of contractual arrangements with Anhui NIO DT and its individual shareholders
(the “Nominee Shareholders”), including, among others, an exclusive business cooperation agreement, a loan agreement, an equity
pledge agreement, an exclusive call option agreement and a power of attorney, which enable the Group to direct the activities that most
significantly impact Anhui NIO DT’s economic performance and obtain substantially all of the economic benefits arising from Anhui
NIO DT. Management concluded that Anhui NIO DT is a variable interest entity and the Company is the ultimate primary beneficiary of
Anhui NIO DT and hence consolidates the financial results of Anhui NIO DT in the Group’s consolidated financial statements. The
Group intends to provide insurance brokerage services which are mainly vehicle-related and property-related and to hold requisite
licenses through Anhui NIO DT. For the year ended December 31, 2022, the financial position, result of operations and cash flow
activities of Anhui NIO DT were immaterial to the consolidated financial statements.
Shanghai Anbin
The Company, the ultimate shareholder of NIO SH, was the ultimate primary beneficiary of Shanghai Anbin Technology Co., Ltd.
(“Shanghai Anbin”) and its subsidiary and hence consolidated the financial results of Shanghai Anbin and its subsidiary in the Group’s
consolidated financial statements, pursuant to a series of contractual agreements, including, among others, an exlusisve business
corporation agreements, a loan agreement, an equity pledge agreement, an exclusive call option agreement and a power of attorney
entered into among NIO SH, Shanghai Anbin and its nominee shareholders in April 2018. On March 31, 2021, all parities agreed to
terminate above mentioned contractual agreements, after which, the Company no longer the ultimate primary beneficiary of Shanghai
Anbin and deconsolidated the financial results of Shanghai Anbin and its subsidiary. The deconsolidation of Shanghai Anbin and its
subsidiary did not have significant impact on the Group’s consolidated financial statements. Before the deconsolidation, the financial
position, result of operations and cash flow activities of Shanghai AnbinS and its subsidiary were immaterial to the consolidated financial
statements.
Liquidity and Going Concern
The Group’s consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will
continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal
course of operations as they come due.
The Group has been incurring losses from operations since inception. The Group incurred net losses of RMB5.3 billion and RMB4.0
billion and RMB14.4 billion for the years ended December 31, 2020, 2021 and 2022, respectively. The Group incurred operating cash
outflow of RMB4.0 billion for the year ended December 31, 2022. Accumulated deficit amounted to RMB55.6 billion and RMB69.9
billion as of December 31, 2021 and 2022, respectively.
F-13
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
As of December 31, 2022, the Group’s balance of cash and cash equivalents was RMB19.9 billion and short-term investments of
RMB19.2 billion and the Group had net current assets of RMB13.3 billion. Management has evaluated the sufficiency of its working
capital and concluded that the Group’s available cash and cash equivalents and short-term investments will be sufficient to support its
continuous operations and to meet its payment obligations when liabilities fall due within the next twelve months from the date of
issuance of these consolidated financial statements. Accordingly, management continues to prepare the Group’s consolidated financial
statements on going concern basis.
2. Summary of Significant Accounting Policies
(a) Basis of presentation
The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted
in the United States of America (“US GAAP”). Significant accounting policies followed by the Group in the preparation of the
accompanying consolidated financial statements are summarized below.
(b) Principles of consolidation
The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIEs for which the
Company is the ultimate primary beneficiary.
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the
power to appoint or remove the majority of the members of the board of directors (the “Board”): to cast majority of votes at the meeting
of the Board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or
equity holders.
The Company applies the guidance under Accounting Standard Codification 810, Consolidations (“ASC 810”) on accounting for the
VIEs. A VIE is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to
permit the entity to finance its activities without additional financial support; (b) as a group, the holders of the equity investment at risk
lack the ability to make certain decisions, the obligation to absorb expected losses or the right to receive expected residual returns, or (c)
an equity investor has voting rights that are disproportionate to its economic interest and substantially all of the entity’s activities are on
behalf of the investor. ASC 810 requires variable interest entities to be consolidated by the primary beneficiary which has a controlling
financial interest of variable interest entities. The Company is considered as the primary beneficiary of the VIEs and thus consolidates
the financial statements each of these entities under U.S. GAAP.
All significant transactions and balances between the Company, its subsidiaries and the VIEs have been eliminated upon
consolidation. The non-controlling interests in consolidated subsidiaries are shown separately in the consolidated financial statements.
(c) Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance
sheet date, and the reported revenue and expenses during the reported period in the consolidated financial statements and accompanying
notes. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to,
standalone selling price of each distinct performance obligation in revenue recognition, warranty liabilities, fair value of available-for-
sale debt security investments, lower of cost and net realizable value of inventories, inventory valuation for excess and obsolete
inventories, losses on purchase commitments, allowance for current expected credit loss, depreciable lives of property, equipment and
software, subsequent measurement of equity securities measured under measurement alternatives, impairment of long-lived assets,
valuation of deferred tax assets, valuation and recognition of share-based compensation arrangements, as well as current/non-current
classification of receivables. Actual results could differ from those estimates.
F-14
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
(d) Functional currency and foreign currency translation
The Group’s reporting currency is the Renminbi (“RMB”). The functional currency of the Company and its subsidiaries which are
incorporated in HK is United States dollars (“US$”), except NIO Sport which operates mainly in United Kingdom and uses Great Britain
pounds (“GBP”). The functional currencies of the other subsidiaries and the VIEs are their respective local currencies. The determination
of the respective functional currency is based on the criteria set out by ASC 830, Foreign Currency Matters.
Transactions denominated in currencies other than in the functional currency are translated into the functional currency using the
exchange rates prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into
functional currency using the applicable exchange rates at the balance sheet date. Non-monetary items that are measured in terms of
historical cost in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains or
losses arising from foreign currency transactions are included in the consolidated statements of comprehensive loss.
The financial statements of the Group’s entities of which the functional currency is not RMB are translated from their respective
functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB at the exchange rates at
the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate
historical rates. Income and expense items are translated into RMB using the periodic average exchange rates. The resulting foreign
currency translation adjustments are recorded in other comprehensive loss in the consolidated statements of comprehensive income or
loss, and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive
loss in the consolidated statements of shareholders’ (deficit)/equity. Total foreign currency translation adjustment income/(losses) were
an income of RMB137,596, a loss of RMB230,345, and an income of RMB717,274 for the years ended December 31, 2020, 2021 and
2022, respectively. The grant-date fair value of the Group’s share-based compensation expenses is reported in US$ as the respective
valuation is conducted in US$ and the shares are denominated in US$.
(e) Convenience translation
Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive loss and consolidated
statements of cash flows from RMB into US$ as of and for the years ended December 31, 2022 are solely for the convenience of the
reader and were calculated at the rate of US$1.00 = RMB6.8972, representing the noon buying rate in The City of New York for cable
transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2022. No representation
is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on, or
December 31, 2022, or at any other rate.
(f) Fair value
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or
permitted to be either recorded or disclosed at fair value, the Group considers the principal or most advantageous market in which it
would transact, and it also considers assumptions that market participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based
upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs
that may be used to measure fair value:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 — Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.
Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets
or liabilities.
As disclosed in Note 2(n), the Group’s equity securities with readily determinable fair values is carried at fair value using quoted
market prices that currently available on a securities exchange and classified within Level 1.
F-15
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group’s certain short-term investments in money market funds and financial products issued by banks are carried at fair value,
which are classified within Level 2 and valued using directly or indirectly observable inputs in the market place. As of December 31,
2021 and 2022, such investments aggregately amounted to RMB27,773,387 and RMB12,781,060, respectively.
As disclosed in Note 2(q), the Group’s derivative instruments are carried at fair value, which are classified within Level 2 and valued
using indirectly observable inputs in the market place.
As disclosed in Note 9, the Group’s available-for-sale debt security investments include investments the Company made in private
companies in 2021 and 2022 which contains substantive redemption and preferential rights, and are classified within Level 3 for fair
value measurement. As of December 31, 2021 and 2022, the carrying value of the investments were RMB680,723 and RMB1,648,861,
respectively. The Company re-measured the fair value using a market approach by adopting a backsolve method, which determined the
estimated fair value of the investments through comparison to a recent transaction and applied significant unobservable inputs and
assumptions. For the year ended December 31, 2021 and 2022, RMB24,224 and RMB746,336, respectively, of fair value changes, net of
tax, were recorded in other comprehensive income. The significant unobservable inputs adopted in the valuation as of December 31,
2021 and 2022 are as follows:
Unobservable Input
Expected volatility
Probability
December 31, 2021
December 31, 2022
61%
54%-61%
Liquidation scenario: 35%
Redemption scenario: 35%
IPO scenario: 30%
Liquidation scenario: 25%-40%
Redemption scenario: 25%-40%
IPO scenario: 20%-50%
Financial assets and liabilities of the Group primarily consist of cash and cash equivalents, restricted cash, short-term investments,
trade receivable, amounts due from related parties, deposits and other receivables, available-for-sale debt security investments, trade and
notes payable, amounts due to related parties, other payables, derivative instruments, short-term borrowings, lease liabilities and long-
term borrowings. As of December 31, 2021 and 2022, other than as discussed above, the carrying values of these financial instruments
approximated to their respective fair values.
(g) Cash, cash equivalents and restricted cash
Cash and cash equivalents represent cash on hand, time deposits and highly-liquid investments placed with banks or other financial
institutions, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less.
Cash which is restricted to withdrawal for use or pledged as security is reported separately on the face of the consolidated balance
sheets. The Group’s restricted cash mainly represents (a) secured deposits held in designated bank accounts for borrowings and corporate
bank credit cards, bank acceptance notes,letter of credit and letters of guarantee; and (b) time deposits that are pledged for property
leases. The restricted cash is classified according to the contractual term of the restriction imposed.
Cash, cash equivalents and restricted cash as reported in the consolidated statements of cash flows are presented separately on our
consolidated balance sheets as follows:
Cash and cash equivalents
Restricted cash
Long-term restricted cash
Total
F-16
December 31,
2021
15,333,719
2,994,408
46,437
18,374,564
December 31,
2022
19,887,575
3,154,240
113,478
23,155,293
Table of Contents
(h) Short-term investments
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Short-term investments consist primarily of investments in fixed deposits with maturities between three months and one year, which
are stated at amortised cost, and investments in money market funds and financial products issued by banks, which are measured at fair
value. As of December 31, 2021 and 2022, the short-term investments amounted to RMB37,057,554 and RMB19,171,017, respectively,
among which, RMB6,646,299 and RMB12,259,459, were restricted as collateral for notes payable, bank borrowings and letter of
guarantee as of December 31, 2021 and 2022, respectively.
(i) Expected credit losses
The Group accounts for the impairment of financial instruments in accordance with ASU No. 2016-13, “Financial Instruments —
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), effective from January 1, 2020.
The Group’s trade and notes receivable, receivables of installment payments, deposits and other receivables are within the scope of ASC
Topic 326. The Group has identified the relevant risk characteristics of its customers and the related receivables, prepayments, deposits
and other receivables which include size, type of the services or the products the Group provides, or a combination of these
characteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the
historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in
assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include customer
demographics, payment terms offered in the normal course of business to customers, and industry-specific factors that could impact the
Group’s receivables. Additionally, external data and macroeconomic factors are also considered. This is assessed at each quarter based on
the Group’s specific facts and circumstances.
The Group adopted this ASC Topic 326 and several associated ASUs on January 1, 2020 using a modified retrospective approach
with a cumulative effect recorded as increase of accumulated deficit with amount of RMB22,969. For the years ended December 31,
2020, 2021 and 2022, the Group recorded RMB9,654, RMB54,332 and RMB48,707, respectively, in expected credit loss provisions in
selling, general and administrative expenses. As of December 31, 2022, the expected credit loss reserve for current and non-current
assets are RMB50,415 and RMB89,641, respectively. As of December 31, 2021, the expected credit loss reserve for current and non-
current assets are RMB42,040 and RMB49,309, respectively.
Balance as at December 31, 2021
Current assets:
Trade and notes receivable
Amounts due from related parties
Prepayments and other current assets
Non-current assets:
Other non-current assets
Balance as at December 31, 2022
Current assets:
Trade and notes receivable
Amounts due from related parties
Prepayments and other current assets
Non-current assets:
Other non-current assets
Original
amount
Expected
credit loss
Rate
Expected
credit loss
provision
2,823,222
1,564,025
1,854,075
0.90 % 25,417
0.81 % 12,691
0.21 % 3,932
5,598,764
0.88 % 49,309
Original
amount
Expected
credit loss
Rate
Expected
credit loss
provision
5,157,814
1,387,694
2,250,441
0.77 % 39,644
0.49 % 6,738
0.18 % 4,033
7,488,200
1.20 % 89,641
F-17
Table of Contents
(j) Inventory
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Inventories are stated at the lower of cost or net realizable value. Cost is calculated on the average basis and includes all costs to
acquire and other costs to bring the inventories to their present location and condition. The Group records inventory write-downs for
excess or obsolete inventories or accrues costs of inventory commitments based upon assumptions on current and future demand
forecasts. If the inventory on hand or inventory purchase commitments is in excess of future demand forecast, the excess amounts are
written down or accrued. The Group also reviews inventory to determine whether its carrying value exceeds the net amount realizable
upon the ultimate sale of the inventory. This requires the determination of the estimated selling price of the vehicles less the estimated
cost to convert inventory on hand into a finished product. Once inventory is written-down, a new, lower-cost basis for that inventory is
established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost
basis.
(k) Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any. Property, plant and
equipment are depreciated at rates sufficient to write off their costs less impairment and residual value, if any, over their estimated useful
lives on a straight-line basis. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the
related assets.
The estimated useful lives are as follows:
Buildings and constructions
Production facilities
Charging & battery swap equipment
R&D equipment
Computer and electronic equipment
Purchased software
Leasehold improvements
Corporate vehicles
Others (office equipment, after-sales equipment, etc)
Useful lives
20 years
10 years
5 to 8 years
5 years
3 years
3 to 5 years
Shorter of the estimated useful life or remaining lease term (ranging from
1-10 years)
5 years
3 to 5 years
Depreciation for mold and tooling is computed using the units-of-production method, including capitalized interest costs which are
amortized over the total estimated units of production of the related assets.
The cost of maintenance and repairs is expensed as incurred, whereas the cost of renewals and betterment that extends the useful
lives of property, plant and equipment is capitalized as additions to the related assets. Interest expense on outstanding debt is capitalized
during the period of significant capital asset construction. Capitalized interest on construction-in-progress is included within property,
plant and equipment and is amortized over the useful life or units of production of the related assets. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation and amortization are removed from their respective accounts, and any gain or
loss on such sale or disposal is reflected in the consolidated statements of comprehensive loss.
(l) Intangible assets, net
Intangible assets are carried at cost less accumulated amortization and impairment, if any. Intangible assets are amortized using the
straight-line method over the estimated useful lives as below:
Domain names and others
5 years
Useful lives
The estimated useful lives of amortized intangible assets are reassessed if circumstances occur that indicate the original estimated
useful lives have changed. As of December 31, 2022, the intangible assets were fully amortised.
F-18
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group does not have indefinite lived intangible assets.
(m) Land use rights, net
Land use rights are recorded at cost less accumulated amortization. Amortization is provided on a straight-line basis over the
respective lease period ranging from 491 to 536 months.
(n) Long-term investments
The Group’s long-term investments include equity investments in entities and debt security investments.
Investments in entities in which the Group can exercise significant influence and holds an investment in voting common stock or in
substance common stock (or both) of the investee but does not own a majority equity interest or control are accounted for using the
equity method of accounting in accordance with ASC topic 323, Investments — Equity Method and Joint Ventures (“ASC 323”). Under
the equity method, the Group initially records its investments at fair value. The Group subsequently adjusts the carrying amount of the
investments to recognize the Group’s proportionate share of each equity investee’s net income or loss into earnings after the date of
investment. The Group evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity
method investments is recognized in earnings when the decline in value is determined to be other-than-temporary.
Equity securities with readily determinable fair values and over which the Group has neither significant influence nor control
through investments in common stock or in-substance common stock are measured at fair value, with changes in fair value reported
through earnings.
Equity securities without readily determinable fair values and over which the Group has neither significant influence nor control
through investments in common stock or in-substance common stock are measured and recorded using a measurement alternative that
measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.
Available-for-sale debt security investments are reported at estimated fair value with the aggregate unrealized gains and losses, net
of tax, reflected in accumulated other comprehensive loss in the consolidated balance sheets. Gain or losses are realized when the
investments are sold or when dividends are declared or payments are received or when other than temporarily impaired.
Held-to-maturity debt security investment are reported at amortized cost. The securities are held to collect contractual cash flows,
and the Group has the positive intent and ability to hold those securities to maturity.
The Group monitors its investments measured under equity method for other-than-temporary impairment by considering factors
including, but not limited to, current economic and market conditions, the operating performance of the companies including current
earnings trends and other company-specific information. No impairment charge was recognized for the years ended December 31, 2020,
2021 and 2022.
(o) Impairment of long-lived assets
Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change
to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that
the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment by
comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the
assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the
assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets.
Impairment charges recognized for the years ended December 31, 2020, 2021 and 2022 was RMB25,757, nil and RMB35,011,
respectively.
F-19
Table of Contents
(p) Warranty liabilities
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group accrues a warranty reserve for all new vehicles sold by the Group, which includes the Group’s best estimate of the
projected costs to repair or replace items under warranty. These estimates are based on actual claims incurred to date and an estimate of
the nature, frequency and costs of future claims. These estimates are inherently uncertain given the Group’s relatively short history of
sales, and changes to the historical or projected warranty experience may cause material changes to the warranty reserve when the Group
accumulates more actual data and experience in the future.
The portion of the warranty reserve expected to be incurred within the next 12 months is included within accruals and other
liabilities, while the remaining balance is included within other non-current liabilities on the consolidated balance sheets. Warranty
expense is recorded as a component of cost of revenues in the consolidated statements of comprehensive loss.
The following table shows a reconciliation in the current reporting period related to carried-forward warranty liabilities.
Warranty – beginning of year
Provision for warranty
Warranty costs incurred
Warranty– end of year
(q) Derivatives instruments and hedging
For the Year Ended December 31,
2021
952,946
1,078,854
(68,823)
1,962,977
2020
412,004
582,069
(41,127)
952,946
2022
1,962,977
1,128,920
(144,960)
2,946,937
Derivative instruments are carried at fair value, which generally represent the estimated amounts expect to receive or pay upon
termination of the contracts as of the reporting date. Derivative financial instruments are not used for trading or speculative purposes.
The Group has entered into several currency exchange forward contracts with certain commercial banks in PRC to mitigate the risks
of foreign exchange gain/loss generated from the Group’s balances of cash and cash equivalents and short-term investments denominated
in US dollars. As such instruments do not qualify for hedge accounting treatment, the Group records the changes in fair value of the
derivatives in other (loss)/income, net, the same line item in which foreign exchange gain/loss is recognised, with offsetting effect. Total
changes in fair value of the derivatives recorded in other (loss)/income, net, were an income of RMB228,887 and a loss of RMB668,051
for the years ended December 31, 2021 and 2022, respectively.
The Group has entered into several swap contracts with a commercial bank to hedge the risks of commodity price associated with
the forecasted purchasing transactions. The Group applies cash flow hedge accounting since the hedge relationship is effective. The
changes in fair value of the hedging instruments are initially recorded in other comprehensive income, and the amounts in accumulated
other comprehensive income related to the fair value changes in the hedging instruments are released into the Group’s earnings when the
hedged items affect earnings. For the year ended December 31, 2022, both the changes in fair value of the hedging instruments through
other comprehensive income and the amounts in accumulated other comprehensive income related to the fair value changes in the
hedging instruments that were released into earnings were immaterial. As of December 31, 2022, all the swap contracts have been fully
executed.
(r) Revenue recognition
Revenue is recognized when or as the control of the goods or services is transferred to a customer. Depending on the terms of the
contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time.
Control of the goods and services is transferred over time if the Group’s performance:
● provides all of the benefits received and consumed simultaneously by the customer;
● creates and enhances an asset that the customer controls as the Group performs; or
● does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance
completed to date.
F-20
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
If control of the goods and services transfers over time, revenue is recognized over the period of the contract by reference to the
progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the
customer obtains control of the goods and services.
Contracts with customers may include multiple performance obligations. For such arrangements, the Group allocates revenue to
each performance obligation based on its relative standalone selling price. The Group generally determines standalone selling prices
based on the prices charged to customers. If the standalone selling price is not directly observable, it is estimated using expected cost plus
a margin or adjusted market assessment approach, depending on the availability of observable information. Assumptions and estimations
have been made in estimating the relative selling price of each distinct performance obligation, and changes in judgments on these
assumptions and estimates may impact the revenue recognition.
When either party to a contract has performed, the Group presents the contract in the consolidated balance sheets as a contract asset
or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.
A contract asset is the Group’s right to consideration in exchange for goods and services that the Group has transferred to a
customer. A receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional
if only the passage of time is required before payment of that consideration is due.
A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received
consideration (or an amount of consideration is due) from the customer. The Group’s contract liabilities primarily resulted from the
multiple performance obligations identified in the vehicle sales contract and the sales of packages, which is recorded as deferred revenue
and advance from customers. As of December 31, 2021 and 2022, the balances of contract liabilities from vehicle sales contracts were
RMB2,294,528 and RMB3,740,108, respectively. As of December 31, 2021 and 2022, the balances of contract liabilities from the sales
of packages were RMB180,732 and RMB309,198, respectively. As of December 31, 2021 and 2022, the Company did not record any
contract assets.
The Group generates revenue from (i) vehicle sales, (ii) battery upgrade service, (iii) sales of charging piles, (iv) sales of packages,
(v) automotive regulatory credits, and (vi) others.
Vehicle sales
The Group generates revenue from sales of electric vehicles, together with a number of embedded products and services through a
series of contracts. The Group identifies the users who purchase the vehicle as its customers. In general, there are multiple distinct
performance obligations explicitly stated in a series of contracts including sales of vehicles, home chargers, vehicle connectivity services,
extended warranty and battery swapping service which are accounted for in accordance with ASC 606. In the PRC, initial users are
entitled to vehicle connectivity services, extended warranty and battery swapping service. The standard warranty provided by the Group
is accounted for in accordance with ASC 460, Guarantees, and the estimated costs are recorded as a liability when NIO transfers the
control of vehicle to a user.
Customers only pay the amount after deducting the government subsidies to which they are entitled for the purchase of electric
vehicles. The government subsidies are applied and collected by the Group or Jianghuai Automobile Group Co., Ltd. (“JAC”) from the
government. Such government subsidies to the customers are considered as a part of the transaction price it charges the customers for the
electric vehicle, as the subsidy is granted to the buyer of the electric vehicle instead of the Group and the buyer remains liable for such
amount to the Group in the event the subsidies were not received by the Group. The Group or JAC applies and collects the payment on
behalf of the customers.
In the instance that some eligible customers elect installment payment for battery or the auto financing arrangements, the Group
believes such arrangement contains a significant financing component and as a result adjusts the transaction price to reflect the impact of
time value on the transaction price using an appropriate discount rate (i.e. the interest rates of the loan reflecting the credit risk of the
borrower). Interest income from such arrangements with a significant financing component is presented as other sales. Receivables
related to the battery installment payment and auto financing programs that are expected to be repaid by customers beyond one year of
the dates of the financial statements are recognized as non-current assets. The difference between the gross receivable and the respective
present value is recorded as unrealized finance income. Interest income from such arrangements with a significant financing component
is presented separately from revenue from contracts with customers.
F-21
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group uses a cost plus margin approach to determine the estimated standalone selling price for each individual distinct
performance obligation identified, considering the Group’s pricing policies and practices, and the data utilized in making pricing
decisions. The overall contract price is then allocated to each distinct performance obligation based on the relative estimated standalone
selling price in accordance with ASC 606. The revenue for vehicle sales and home chargers are recognized at a point in time when the
control of the product is transferred to the customer. For the vehicle connectivity service and battery swapping service, the Group
recognizes the revenue over time using a straight-line method during the estimated beneficial period, based on the estimated length of
time that the initial owner owns the vehicles before it is re-sold to secondary market. As for the extended warranty, given limited
operating history and lack of historical data, the Group decides to recognize the revenue over time based on a straight-line method
initially, and will continue monitoring the cost pattern periodically and adjust the revenue recognition pattern to reflect the actual cost
pattern as it becomes available.
As the consideration for the vehicle and all embedded services are generally paid in advance, which means the payments received
are prior to the transfer of goods or services by the Group, the Group records a contract liability (deferred revenue) for the allocated
amount regarding those unperformed obligations.
Battery as a Service (BaaS)
The Battery as a Service (the “BaaS”), allows users to purchase electric vehicles without batteries and subscribe for the usage of
batteries separately. In PRC, under the BaaS, the Group sells batteries to Wuhan Weineng Battery Asset Co., Ltd. (the “Battery Asset
Company”), an equity investee of the Company, on a back-to-back basis when the Group sells the vehicle to the BaaS users and the BaaS
users subscribe for the usage of the batteries from the Battery Asset Company by paying a monthly subscription fee to the Battery Asset
Company. The promise to transfer the control of the batteries to the Battery Asset Company is the only performance obligation in the
contract with the Battery Asset Company for the sales of batteries. The Group recognizes revenue from the sales of batteries to the
Battery Asset Company when the vehicles (together with the batteries) are delivered to the BaaS users which is the point considered then
the control of the batteries is transferred to the Battery Asset Company.
Together with the sales of the batteries, the Group entered into service agreements with the Battery Asset Company, pursuant to
which the Group provides services to the Battery Asset Company including batteries monitoring, maintenance, upgrade, replacement, IT
system support, etc., with monthly service charges. In case of any default in payment of monthly rental fees from users, the Battery Asset
Company also has right to request the Group to track and lock down the battery subscribed by the users to limit its usage. In addition, in
furtherance of the BaaS, the Group agreed to provide guarantee to the Battery Asset Company for the default in payment of monthly
subscription fees from users. The maximum amount of guarantee that can be claimed by the Battery Asset Company for the users’
payment default shall not be higher than the accumulated service fees the Group receives from the Battery Asset Company.
For services provided to the Battery Asset Company, revenue is recognized over the period when services are rendered. As for
financial guarantee liabilities, the provision of guarantee is linked to and associated with services rendered to the Battery Asset Company
and the payment of guarantee amount is therefore accounted for as the reduction to the revenue from the Battery Asset Company.
The fair value of the guarantee liabilities is determined by taking considerations of the default pattern of the Company’s existing
battery installment programs provided to users. At each period end, the financial liabilities are remeasured with the corresponding
changes recorded as the reduction to the revenue. For the years ended December 31, 2022 and 2021, both service revenue and guarantee
liability were immaterial.
Since 2022, the BaaS users are also provided with the option to buy out the batteries in PRC. Under this arrangement, BaaS users
and the Battery Asset Company enter into battery subscription termination agreement, and the Group purchases the outgoing batteries
from the Battery Asset Company, after which the Group sells batteries with qualified performance to the BaaS users. These transactions
are arranged on back-to-back basis under which the Group is in substance rendering the agency service to facilitate the BaaS users which
are also the customers of the Group to complete the purchase of batteries from the Battery Asset Company. The Group therefore
recognizes revenue of the service to facilitate the BaaS batteries buy out transactions on net basis with the amount of the difference
between the consideration the Group receives from the BaaS users for the battery sales and the price of batteries the Group pays to the
Battery Asset Company. For the year ended December 31, 2022, the Group recognized service fee of RMB36,320. Upon the completion
of BaaS buy-out, the Group stops to provide battery service and is not obliged to provide guarantee and warranty related to the relevant
batteries to the Battery Asset Company.
F-22
Table of Contents
Battery swapping service
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group also provides battery swapping service to users with convenient “recharging” experience by swapping the user’s battery
for another one. In PRC, as set forth in the vehicle sales contracts, the initial users can have their batteries swapped certain times a month
free of charge (i.e. monthly free-of-charge quota) during the length of time they own vehicles. For additional consideration, initial users
can exceed the monthly swapping quota provided for within the sales agreement. When the vehicles are sold by the initial users, the
successor owners are not entitled to such monthly free-of-charge quota and need to pay cash consideration for each battery swapping
service. The battery swapping service is in substance a charging service instead of non-monetary exchanges or sales of batteries as the
batteries involved in such swapping are the same in capacity and very similar in performance.
For performance obligation of the battery swapping service sold together with the vehicles (i.e. monthly free-of-charge quota), the
Group recognizes the revenue over time using a straight-line method in the estimated beneficial period, being the estimated length of
time that the initial owner owns the vehicle. For the battery swapping beyond monthly free-of-charge quota for which additional
considerations are paid by the users, the Group recognizes revenue at the amount of consideration paid by users when the battery
swapping service is completed. Such revenue is recorded under sales of packages and provision of power solution.
Practical expedients and exemptions
The Group follows the guidance on immaterial promises when identifying performance obligations in the vehicle sales contracts and
concludes that roadside assistance and out-of-town charging services are not performance obligations considering these two services are
value-added services to enhance user experience rather than critical items for vehicle driving and forecasted that usage of these two
services will be very limited. The Group also performs an estimation on the standalone fair value of each promise applying a cost plus
margin approach and concludes that the standalone fair value of roadside assistance and out-of- town charging services are insignificant
individually and in aggregate, representing less than 1% of vehicle gross selling price and aggregate fair value of each individual
promise.
Considering the qualitative assessment and the result of the quantitative estimate, the Group concluded not to assess whether
promises are performance obligations as they are immaterial in the context of the contract and the relative standalone fair value
individually and in aggregate is less than 3% of the contract price.
Battery upgrade service
The Group provides battery upgrade service to both BaaS users and non-BaaS users. The users can exchange their batteries with
lower capacity for the batteries with higher capacity from the Group with a fixed cash consideration. The battery upgrade service is in
substance the provision of incremental battery capacity service to the users instead of non-monetary battery exchanges or sales of battery.
Therefore, under non-BaaS model, the revenue from the battery upgrade service is recognized at the amount of cash consideration paid
by users at a point in time when the service is rendered. Under the BaaS model, since the ownership of originally installed battery
belongs to the Battery Asset Company, when a user requests battery upgrade, the Group actually upgrades the battery that belongs to the
Battery Asset Company and recognize revenue for the battery upgrade service at the amount paid by the Battery Asset Company when
upgrade service is rendered. BaaS users will then pay a higher monthly subscription fee to the Battery Asset Company for subscribing for
the battery with higher capacity.
Sales of charging piles
In addition to the home chargers provided as one of the performance obligations in the contract of vehicle sales, the Group also sells
charging piles to customers separately. Revenue for charging piles are recognized at a point in time when the control of the product is
transferred to customers.
Sales of packages and provision of power solution
The Group also sells the two packages, energy package and service package in exchange for cash considerations. The energy
package includes battery charging and swapping services and service package includes repair and maintenance services.
F-23
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The agreements for packages create legal enforceability to both parties on a monthly basis as the respective packages can be
canceled at any time without any penalty. The Group concludes that each service provided in the energy or service package is a series
and meets the stand-ready criteria as one separate performance obligation within the package. Each service provided in the energy or
service package is recognized under the same pattern over time on a monthly basis as customer simultaneously receives and consumes
the benefits provided and the term of legally enforceable contract is only one month, except for the customer loyalty program points
granted to the customers as discussed below.
As the consideration for packages are generally paid in advance, which means the payments received are prior to the transfer of
services by the Group, the Group records the consideration as a contract liability (advance from customers) upon receipt.
The Group also provides power solution to users including battery charging and swapping. Revenue is recognized at the amount of
consideration paid by users when charging or swapping is completed.
Sales of automotive regulatory credits
New Energy Vehicle (“NEV”) mandate policy launched by China’s Ministry of Industry and Information Technology (“MIIT”)
specifies the NEV credit targets and as all of the Group’s products are NEVs, the Group is able to generate NEV credits above target. The
credits earned per vehicle is dependent on various metrics such as vehicle driving range and battery energy efficiency, and is calculated
based on the MIIT published formula. Excess positive NEV credits are tradable to other vehicle manufacturers through a credit
management system established by the MIIT on a separately negotiated basis. The Group sells these credits at agreed price to other
vehicle manufacturers.
Considerations for automotive regulatory credits are typically received at the point control transfers to the customer, or in
accordance with payment terms customary to the business. The Company recognizes revenue on the sale of automotive regulatory credits
at the time control of the regulatory credits is transferred to the purchasing party as other sales revenue in the consolidated statements of
comprehensive loss.
Others
Other revenues primarily comprise revenues generated from (i) sales of accessories, (ii) interest income from auto financing
arrangements, (iii) embedded products and services offered together with vehicle sales, including vehicle connectivity service and
extended warranty, and (iv) others. Revenue is recognized when relevant services are rendered or control of the products is transferred.
Incentives
The Group offers a self-managed customer loyalty program points, which can be used in the Group’s online store and at NIO houses
to redeem merchandise, including accessories and branded merchandise, etc. The Group determines the value of each point based on
estimated incremental cost. Customers and NIO fans and advocates have a variety of ways to obtain the points. The major accounting
policy for its points program is described as follows:
F-24
Table of Contents
(i) Sales of vehicle
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group concludes the points offered linked to the purchase transaction of the vehicle is a material right and accordingly a
separate performance obligation according to ASC 606, and is taken into consideration when allocating the transaction price of the
vehicle sales. The Group also estimates the probability of points redemption when performing the allocation. Since historical information
is limited for the Group to determine any potential points forfeiture and the fact that most merchandise can be redeemed without
requiring a significant amount of points compared with the amount of points provided to users, the Group believes it is reasonable to
assume all points will be redeemed and no forfeiture is estimated currently. The amount allocated to the points as separate performance
obligation is recorded as contract liability (deferred revenue) and revenue should be recognized when future goods or services are
transferred. The Group will continue to monitor when and if a forfeiture rate should be applied and will apply and update the estimated
forfeiture rate at each reporting period.
(ii) Sales of packages
Energy package — when the customers charge their vehicles without using the Group’s charging network as tracked by the Group’s
system, the Group will grant points to the customers based on the quantity of electricity charged. The Group records the value of the
points as a reduction of revenue from the energy package.
Service package — the Group grants points to the customers when the customers accumulate miles of driving during the service
period of the service package. The Group records the value of the points as a reduction of revenue from the service package.
The above customer points arrangement is considered as a separate performance obligation of the energy and service packages sold.
The allocated amount to points granted under these packages are deferred and recognized when such points are utilized by the customers.
Since historical information is limited for the Group to determine any potential points forfeiture and most merchandise can be redeemed
without requiring a significant amount of points compared with the amount of points provided to users, the Group has used an estimated
forfeiture rate of zero.
(iii) Other scenarios
Customers or users of the mobile application can also obtain points through any other ways such as frequent sign-ins to the Group’s
mobile application, sharing articles from the application to users’ own social media, etc. The Group believes these points are to
encourage user engagement and generate market awareness. As a result, the Group accounts for such points as selling and marketing
expenses with a corresponding liability recorded under other current liabilities of its consolidated balance sheets upon the points are
offered. The Group estimates liabilities under the customer loyalty program based on cost of the NIO merchandise that can be redeemed,
and its estimate of probability of redemption. At the time of redemption, the Group records a reduction of inventory and other current
liabilities. In certain cases where merchandise is sold for cash in addition to points, the Group records other revenue for the amount of
cash received.
Similar to the reasons above, the Group estimates no points forfeiture currently and continues to assess when and if a forfeiture rate
should be applied.
For the years ended December 31, 2020, 2021 and 2022, the revenue portion allocated to the points as a separate performance
obligation was RMB162,485, RMB371,849 and RMB492,925, respectively, which is recorded as contract liability (deferred revenue).
For the years ended December 31, 2020, 2021 and 2022, the total points recorded as selling and marketing expenses were RMB78,229,
RMB155,884 and RMB215,201, respectively.
As of December 31, 2021 and, 2022, liabilities recorded related to unredeemed points were RMB468,878, and RMB680,660,
respectively.
F-25
Table of Contents
(s) Cost of Sales
Vehicle
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Cost of vehicle revenue includes parts, materials, processing fee, labor costs, manufacturing cost (including depreciation of assets
associated with the production) and losses from production related purchase commitments. Cost of vehicle revenue also includes reserves
for estimated warranty expenses and charges to write-down the carrying value of the inventory when it exceeds its estimated net
realizable value and to provide for on-hand inventory that is either obsolete or in excess of forecasted demand.
Service and Other
Cost of service and other revenue includes direct parts, materials, labor costs, vehicle connectivity costs, depreciation of associated
assets used for providing services, and other cost associated with sales of service and others.
(t) Sales and marketing expenses
Sales and marketing expenses consist primarily of advertising expenses, marketing and promotional expenses, salaries and other
compensation-related expenses to sales and marketing personnel. Advertising expenses consist primarily of costs for the promotion of
corporate image and product marketing. The Group expenses all advertising costs as incurred and classifies these costs under sales and
marketing expenses. For the years ended December 31, 2020, 2021 and 2022, advertising costs totaled RMB266,569, RMB529,057 and
RMB815,619, respectively.
(u) Research and development expenses
Certain costs associated with developing internal-use software are capitalized when such costs are incurred within the application
development stage of software development. Other than that, all costs associated with research and development (“R&D”) are expensed
as incurred. R&D expenses are primary comprised of charges for R&D and consulting work performed by third parties; salaries, bonuses,
share-based compensation, and benefits for those employees engaged in research, design and development activities; costs related to
design tools; license expenses related to intellectual property, supplies and services; and allocated costs, including depreciation and
amortization, rental fees, and utilities.
(v) General and administrative expenses
General and administrative expenses consist primarily of salaries, bonuses, share-based compensation and benefits for employees
involved in general corporate functions, depreciation and amortization of fixed assets which are used in general corporate activities, legal
and other professional services fees, rental and other general corporate related expenses.
(w) Employee benefits
Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which
certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor
regulations require that the PRC subsidiaries and VIEs of the Group make contributions to the government for these benefits based on
certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal
obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as
incurred, were approximately RMB366,223, RMB761,417 and RMB1,578,273 for the years ended December 31, 2020, 2021 and 2022,
respectively.
F-26
Table of Contents
(x) Government grants
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group’s subsidiaries received government subsidies from certain local governments. The Group’s government subsidies
consisted of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has provided for a specific
purpose, such as product development and renewal of production facilities. Other subsidies are the subsidies that the local government
has not specified its purpose for and are not tied to future trends or performance of the Group; receipt of such subsidy income is not
contingent upon any further actions or performance of the Group and the amounts do not have to be refunded under any circumstances.
The Group recorded specific purpose subsidies as advances payable when received. For specific subsidies, upon government acceptance
of the related project development or asset acquisition, the specific purpose subsidies are recognized to reduce related R&D expenses or
the cost of asset acquisition. Other subsidies are recognized as other operating income upon receipt as further performance by the Group
is not required.
(y) Income taxes
Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Group accounts for income
taxes under the asset and liability method in accordance with ASC 740, Income Tax. Deferred income taxes are recognized for the tax
consequences attributable to differences between carrying amounts of existing assets and liabilities in the financial statements and their
respective tax basis, and operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on
deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change.
Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not
that amount of the deferred tax assets will not be realized.
The Group records liabilities related to uncertain tax positions when, despite the Group’s belief that the Group’s tax return positions
are supportable, the Group believes that it is more likely than not that those positions may not be fully sustained upon review by tax
authorities. Accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense. The Group did not
recognize uncertain tax positions as of December 31, 2021 and 2022.
(z) Share-based compensation
The Company grants restricted shares and share options of the Company and its subsidiary to eligible employees and non-employee
consultants and accounts for share-based compensation in accordance with ASC 718, Compensation — Stock Compensation and ASU
2018-07-Compensation-stock compensation (Topic 718)-Improvements to non-employee share-based payment accounting.
Employees’ share-based compensation awards are measured at the grant date fair value of the awards and recognized as expenses a)
immediately at the grant date if no vesting conditions are required; or b) for share options or restricted shares granted with only service
conditions, using the straight-line vesting method, net of estimated forfeitures, over the vesting period; or c) for share options where the
underlying share is liability within the scope of ASC 480, using the graded vesting method, net of estimated forfeitures, over the vesting
period, and re-measuring the fair value of the award at each reporting period end until the award is settled.
All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value
of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
In April 2019, the Company adopted ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Non-
employee Share-Based Payment Accounting”. Upon the adoption of this guidance, the Group no longer re-measures equity-classified
share-based awards granted to consultants or non-employees at each reporting date through the vesting period and the accounting for
these share-based awards to consultants or non-employees and employees was substantially aligned. Share-based compensation expenses
for share options and restricted shares granted to non-employees are measured at fair value at the date when such awards are granted and
recognized over the period during which the service from the non-employees is provided.
The binomial option-pricing model is used to measure the value of share options. The determination of the fair value is affected by
the fair value of the ordinary shares as well as assumptions including the expected share price volatility, actual and projected employee
and non-employee share option exercise behavior, risk-free interest rates and expected dividends.
F-27
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates
involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-
based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not
intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and
subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting
purposes.
For restricted shares granted by one of the Company’s subsidiaries to employees, determination of related estimated fair values (the
subsidiaries are not publicly traded) requires complex and subjective judgments due to limited financial and operating history, unique
business risks and limited comparable public information. Key inputs and assumptions underlying the determined fair value of these
restricted shares include but are not limited to the pricing of recent rounds of financing, future cash flow forecasts, discount rates, and
liquidity factors relevant to each of the respective subsidiaries.
Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The
Group uses historical data to estimate pre-vesting options and records share-based compensation expenses only for those awards that are
expected to vest.
(aa) Comprehensive income/(loss)
The Group applies ASC 220, Comprehensive Income, with respect to reporting and presentation of comprehensive loss and its
components in a full set of financial statements. Comprehensive loss is defined to include all changes in equity of the Group during a
period arising from transactions and other event and circumstances except those resulting from investments by shareholders and
distributions to shareholders. For the years presented, the Group’s comprehensive loss includes net loss and other comprehensive
income/(loss), which mainly consists of the foreign currency translation adjustment that have been excluded from the determination of
net loss.
(ab) Leases
As the lessee, the Group recognizes in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use
asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, the Group makes an
accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities and recognizes lease expenses for
such lease generally on a straight-line basis over the lease term. As most of the Company’s leases do not provide an implicit rate, the
Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present
value of lease payments. Operating lease assets are included within right-of-use assets— operating lease, and the corresponding
operating lease liabilities are included within operating lease liabilities on the consolidated balance sheets. Finance lease assets are
included within other non-current assets, and the corresponding finance lease liabilities are included within accruals and other liabilities
for the current portion, and within other non-current liabilities on the consolidated balance sheets.
(ac) Dividends
Dividends are recognized when declared. No dividends were declared for the the years ended December 31, 2020, 2021 and 2022.
(ad) Earnings/(loss) per share
Basic earnings/(loss) per share is computed by dividing net income/(loss) attributable to holders of ordinary shares, considering the
accretions to redemption value of the preferred shares, by the weighted average number of ordinary shares outstanding during the period
using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating
securities based on their participating rights. Diluted earnings/(loss) per share is calculated by dividing net income/(loss) attributable to
ordinary shareholders, as adjusted for the accretion and allocation of net income related to the preferred shares, if any, by the weighted
average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of
shares issuable upon the conversion of the preferred shares using the if-converted method, unvested restricted shares, restricted share
units and ordinary shares issuable upon the exercise of outstanding share options (using the treasury stock method). Ordinary equivalent
shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-
dilutive.
F-28
Table of Contents
(ae) Segment reporting
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
ASC 280, Segment Reporting, establishes standards for companies to report in their financial statements information about operating
segments, products, services, geographic areas, and major customers.
Based on the criteria established by ASC 280, the Group’s chief operating decision maker (“CODM”) has been identified as the
Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance
of the Group as a whole and hence, the Group has only one reportable segment. The Group does not distinguish between markets or
segments for the purpose of internal reporting. As the Group’s long-lived assets are substantially located in the PRC, no geographical
segments are presented.
3. Recent Accounting Pronouncements
(a) Recently adopted accounting pronouncements
In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832). This ASU requires business entities to
disclose information about government assistance they receive if the transactions were accounted for by analogy to either a grant or a
contribution accounting model. The disclosure requirements include the nature of the transaction and the related accounting policy used,
the line items on the balance sheets and statements of operations that are affected and the amounts applicable to each financial statement
line item and the significant terms and conditions of the transactions. The ASU is effective for annual periods beginning after December
15, 2021. The disclosure requirements can be applied either retrospectively or prospectively to all transactions in the scope of the
amendments that are reflected in the financial statements at the date of initial application and new transactions that are entered into after
the date of initial application. The Company adopted ASU No. 2020-01 from January 1, 2022, which did not have a material impact on
the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate
Reform on Financial Reporting”, which provides optional expedients and exceptions for applying U.S. GAAP on contract modifications
and hedge accounting to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected
to be discontinued because of reference rate reform, if certain criteria are met. These optional expedients and exceptions provided in
ASU 2020-04 are effective for the Company as of March 12, 2020 through December 31, 2022. The Company adopted this from January
1, 2022, which did not have a material impact on the Company’s consolidated financial statements.
(b) Recently issued accounting pronouncements not yet adopted
In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with
Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract
liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the
acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after
December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early
adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all
business combinations for which the acquisition date occurred during the fiscal year of adoption. The Company is in the process of
evaluating the impact of the new guidance on its consolidated financial statements. This ASU is currently not expected to have a material
impact on the Company’s consolidated financial statements.
In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures. This ASU eliminates the
accounting guidance for troubled debt restructurings by creditors that have adopted ASU 2016-13, Measurement of Credit Losses on
Financial Instruments, which we adopted on January 1, 2020. This ASU also enhances the disclosure requirements for certain loan
refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the ASU amends the
guidance on vintage disclosures to require entities to disclose current period gross write-offs by year of origination for financing
receivables and net investments in leases within the scope of ASC 326-20. The ASU is effective for annual periods beginning after
December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU would be applied prospectively. Early
adoption is also permitted, including adoption in an interim period. The Company is in the process of evaluating the impact of the new
guidance on its consolidated financial statements. This ASU is currently not expected to have a material impact on the Company’s
consolidated financial statements.
F-29
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
In June 2022, the FASB issued ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities
Subject to Contractual Sale Restrictions. The update clarifies that a contractual restriction on the sale of an equity security is not
considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The update also
clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The update also requires
certain additional disclosures for equity securities subject to contractual sale restrictions. The amendments in this update are effective for
the Company beginning January 1, 2024 on a prospective basis. Early adoption is permitted for both interim and annual financial
statements that have not yet been issued or made available for issuance. The Company is in the process of evaluating the impact of the
new guidance on its consolidated financial statements. This ASU is currently not expected to have a material impact on the Company’s
consolidated financial statements.
4. Concentration and Risks
(a) Concentration of credit risk
Assets that potentially subject the Group to significant concentrations of credit risk primarily consist of cash and cash equivalents,
restricted cash, short-term investment, trade receivable, amount due from related parties, deposits and other receivables. The maximum
exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. As of December 31, 2021 and 2022, the
great majority of the Group’s cash and cash equivalents, restricted cash and short-term investments were held by major financial
institutions located in the PRC and the United States which management believes are of high credit quality based on their credit ratings.
(b) Currency convertibility risk
The PRC government imposes controls on the convertibility of RMB into foreign currencies. The Group’s cash and cash equivalents
and restricted cash denominated in RMB that are subject to such government controls amounted to RMB10,453,728 and
RMB13,012,259 as of December 31, 2021 and 2022, respectively. The value of RMB is subject to changes in the central government
policies and to international economic and political developments affecting supply and demand in the PRC foreign exchange trading
system market. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial
institutions at exchange rates set by the People’s Bank of China (the “PBOC”). Remittances in currencies other than RMB by the Group
in the PRC must be processed through PBOC or other Chinese foreign exchange regulatory bodies which require certain supporting
documentation in order to process the remittance.
(c) Foreign currency exchange rate risk
Since July 21, 2005, the RMB has been permitted to fluctuate within a narrow and managed band against a basket of certain foreign
currencies. While the international reaction to the RMB appreciation has generally been positive, there remains significant international
pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant
appreciation of the RMB against other currencies.
(d) Concentration of customers and suppliers
The following tables summarized the customer with greater than 10% of the total revenue and account receivables:
Percentage of the total revenue
Customer A
Percentage of the account receivables
Customer A
* Less than 10%
F-30
For the Year Ended December 31,
2020
2021
2022
*
12 %
*
December 31,
2021
December 31,
2022
36 %
21 %
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The following tables summarized the supplier with greater than 10% of the total purchase and payables:
Percentage of the total purchase
Supplier A
Percentage of the payables
Supplier A
5. Inventory
Raw materials
Work in process
Finished Goods
Merchandise
Less: inventory provision
Total
For the Year Ended December 31,
2020
2021
2022
16 %
20 %
20 %
December 31,
2021
December 31,
2022
28 %
31 %
December 31, December 31,
2021
1,008,348
3,915
826,011
220,931
(2,853)
2,056,352
2022
2,974,125
170,995
4,685,790
510,143
(149,667)
8,191,386
Raw materials primarily consist of materials for volume production as well as spare parts used for aftersales services.
Finished goods include vehicles ready for transit at production factory, vehicles in transit to fulfill customer orders, new vehicles
available for immediate sale at the Group’s sales and service center locations and charging piles.
Merchandise includes accessories and branded merchandise which can be redeemed by customer loyalty program.
Inventory write-downs recorded in cost of sales for the years ended December 31, 2020, 2021 and 2022 were RMB5,803,
RMB1,105 and RMB148,729, respectively.
6. Prepayments and Other Current Assets
Prepayments and other current assets consist of the following:
Deductible VAT input
Prepayment to vendors
Deposits
Receivables from JAC
Receivables from third party online payment service providers
Receivable of reimbursement from the depositary bank
Interest receivable
Derivative assets (Note 2(q))
Other receivables
Less: Allowance for credit losses
Total
F-31
December 31, December 31,
2021
1,040,024
167,453
84,421
20,939
74,464
80,461
97,734
104,277
184,302
(3,932)
1,850,143
2022
779,694
541,457
349,651
196,075
154,264
87,170
10,167
—
131,963
(4,033)
2,246,408
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group entered into several currency exchange forward contracts with certain commercial banks in PRC. Pursuant to these
contracts, the Group agreed to sell US dollars to the banks in exchange for Renminbi at pre-arranged fixed foreign exchange rates on
specific future dates with no upfront payments to mitigate the risks of foreign exchange gain/loss generated from the Group’s balances of
cash and cash equivalents and short-term investments denominated in US dollars. The Group recorded these currency exchange forward
contracts as derivative assets/liabilities at their fair values at each of reporting date.
7. Property, Plant and Equipment, Net
Property, plant and equipment and related accumulated depreciation were as follows:
Mold and tooling
Leasehold improvements
Charging & battery swap equipment
Production facilities
Construction in process
Computer and electronic equipment
Purchased software
R&D equipment
Buildings and constructions
Corporate vehicles
Others
Subtotal
Less: Accumulated depreciation
Less: Accumulated impairment
Total property, plant and equipment, net
December 31,
2021
2,354,411
1,876,294
2,279,893
831,776
1,304,548
575,364
493,374
552,956
875,562
180,157
274,906
11,599,241
(4,131,352)
(68,373)
7,399,516
December 31,
2022
3,901,436
3,408,731
3,393,603
3,252,362
3,114,345
1,250,861
985,141
939,586
890,576
473,602
991,597
22,601,840
(6,901,232)
(41,942)
15,658,666
The Group recorded depreciation expenses of RMB1,041,011, RMB1,702,559 and RMB2,874,912 for the years ended December
31, 2020, 2021 and 2022, respectively.
The Group reviews the useful lives and the estimated total units of production of its property, plant and equipment on regular basis.
For the year ended December 31, 2022, in response to the planned products upgrade of certain existing vehicle models, the Group carried
out an assessment on the useful lives of the production facilities based on the revised plan of future production volume of these vehicle
models. This assessment resulted in the accelerated useful lives of certain production facilities which resulted in an increase in
depreciation expense of RMB44,208, which is recorded in cost of sales for the year ended December 31, 2022.
8. Land Use Rights, Net
Land use rights and related accumulated amortization were as follows:
Land use rights
Less: Accumulated amortization—land use rights
Total land use rights, net
December 31, December 31,
2021
216,489
(17,368)
199,121
2022
235,198
(22,595)
212,603
The Group recorded amortization expense for land use rights of RMB4,847, RMB4,847 and RMB5,227 for the years ended
December 31, 2020, 2021 and 2022, respectively.
F-32
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
9. Long-term investments
The Company’s long-term investments consisted of the following:
Equity investments:
Equity method investments (i)
Equity securities without readily determinable fair value (ii)
Equity securities with readily determinable fair value
Debt investments:
Held-to-maturity debt securities – time deposit (iii)
Available-for-sale debt securities (iv)
Total
(i) Equity method investments
December 31, December 31,
2021
2022
820,294
237,920
20,446
1,325,800
101,536
48,290
1,300,000
680,723
3,059,383
3,231,924
1,648,861
6,356,411
In August 2020, the Group and three other third party investors jointly established the Battery Asset Company. The Group invested
RMB200,000 in the Battery Asset Company and held 25% of the Battery Asset Company’s equity interests. In December 2020, the
Battery Asset Company entered into an agreement with the other third-party investors for a total additional investment of RMB640,000
by those investors. In 2021, the Group invested an additional RMB270,000 and owned approximately 19.8% equity interests of the
Battery Asset Company. In July 2022, the Battery Asset Company entered into an agreement with the other third-party investors for a
total additional investment of RMB40,000 by those investors. As of December 31, 2022, the Group owns approximately 19.4% equity
interests of the Battery Asset Company. The Group, as a major shareholder of the Battery Asset Company, is entitled to appoint one out
of eight directors in the Battery Asset Company’s board of directors and can exercise significant influence over the Battery Asset
Company. Therefore, the investment in the Battery Asset Company is accounted for using the equity method of accounting.
In November 2021, the Group purchased an equity investment in an investment fund held by Ningbo Meishan Bonded Port Area
Weilan Investment Co., Ltd. (“Weilan”), a company controlled by the principal shareholder (and Chief Executive Officer) of the
Company (Note 26), with the total consideration of RMB50,000. As at the date of purchase, such investment was recorded at fair value
of RMB68,535 with the excessive amount of RMB18,535 over the purchase consideration of RMB50,000 being recorded as an
additional paid in capital contribution from the shareholder. The Group has ownership interest of 1.03% in this fund but has the ability to
exercise significant influence over this fund through its capacity as a member of its investment committee which determines the
investment strategies and makes investment decisions for this fund. Therefore, the Group accounts for this investment under equity
method.
In April 2018, the Group and certain other third party investors jointly established a private company. The Group invested
RMB112,500 and held 22.5% of its equity interests. The Group was entitled to appoint one out of five directors in its board of directors
and could exercise significant influence over the private company. Therefore, the investment was accounted for under equity method. As
of December 31, 2020, the carrying amount of the investment was nil due to the share of losses of the investee. In February 2021, with
the dilution of the Group’s ownership in the investee to 4.5% as a result of a financing transaction completed by the investee which
issued new shares to new investors, the Group, after taking into consideration unrecognized losses of the investee (any losses
cumulatively in excess of carrying value), recognized a dilution gain of RMB104,653 in the share of income of equity investee as an
indirect disposal with a like adjustment to the investment carrying amount. This gain became an addition to the Group’s new cost basis in
this investment. Upon the completion of the financing transaction of the investee, the Group was no longer entitled to appoint director to
this investee and hence lost the ability to exercise significant influence. As a result, the Group discontinued the equity method accounting
and elected to account for this investment as an equity investment without a readily determinable fair value. Immediately following the
discontinuation of the equity method accounting, the Group remeasured the investment at fair value of RMB133,767 with reference to
the price of the financing and recorded a gain of RMB29,114.
In 2022, the Group invested in several private funds as a limited partner with a total amount of RMB192,723. The Group is not able
to control the investment committee which determines the investment strategies and makes investment decisions for these funds, nor is
the Group entitled to replace the general partner through kick-out rights. However, with certain voting rights the Group is entitled to
exercise significant influence over the funds. Therefore, the Group accounts for these investments under equity method.
F-33
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
During the years ended December 31, 2020, 2021 and 2022, the Group recognized RMB66,030 of shares of loss of equity investees
and RMB62,510 and RMB377,775 of shares of income of equity investees, respectively, from all of its equity method investments.
As of December 31, 2021 and 2022, none of the Group’s equity method investment, both individually or in aggregate, was
considered as significant under Reg S-X Rules.
(ii) Equity securities without readily determinable fair value
Equity securities without readily determinable fair value:
Initial cost
Net cumulative fair value adjustments
Carrying value
December 31,
2021
December 31,
2022
143,209
94,711
237,920
9,477
92,059
101,536
The Group has certain equity investments which are measured under the measurement alternative. During the years ended December
31, 2020, 2021 and 2022, in addition to the transaction discussed above, the Group invested RMB5,442, RMB4,000 and RMB35 in
equity securities without readily determinable fair value, respectively. In 2022, the Group disposed an investment in equity securities
without readily determineable fair values for total consideration of RMB194,063, and recorded the relevant gain of RMB60,296 in
investment income. The Group re-measured these investments based on recent financing transactions of these investees, which were
considered as observable transactions, and recorded fair value gains of nil, RMB94,711 and loss of RMB2,652 in investment income
during the year ended December 31, 2020, 2021 and 2022, respectively.
(iii) Held-to-maturity debt securities – time deposit
Held-to-maturity investments represent time deposits in commercial banks with maturities of more than one year with carrying
amounts of RMB1.3 billion and RMB3.2 billion as of December 31, 2021 and 2022 respectively. As of December 31, 2021 and 2022, the
weighted average maturities periods are 2.2 and 1.9 years, respectively.
(iv) Available-for-sale debt securities
Available-for-sale debt securities:
Initial cost
Net cumulative fair value adjustments
Carrying value
December 31, December 31,
2021
2022
650,000
30,723
680,723
671,567
977,294
1,648,861
In July 2021, the Company, together with several third party investors, established a fund with total capital contributions of
RMB650,000, among which the Group contributed RMB550,000. According to the fund agreement, the fund is established for the sole
purpose of investing in a pre-determined private company and the Company is able to unilaterally determine the operation and
investment strategy of the fund. Therefore, the Company consolidated the financial statements of the fund. The investments provided by
other investors to the fund with amount of RMB100,000 are classified as non-controlling interest. The fund purchased a minority interest
of a private company that was pre-determined with total consideration of RMB650,000. Since the investment contains certain substantive
preferential rights, including redemption at the holders’ option upon occurrence of certain contingent events that are out of the investee’s
control and liquidation preference over the common shareholders, it is not considered as common stock or in-substance common stock
and is therefore classified as available-for-sale debt investment which is measured at its fair value with the change of fair value
recognized as other comprehensive income. In 2022, the Company entered into agreements with other third-party investors and disposed
certain equity interests of this private company with the total consideration of RMB270,000 and recognized investment gain of
RMB171,567, among which RMB4,652 were released from unrealized gains of other comprehensive income.
F-34
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
In July 2022, the Company invested in a private company with total consideration of RMB120,000. Since the investment contains
certain substantive preferential rights, including redemption at the holders’ option upon occurrence of certain contingent events that are
out of the investee’s control and liquidation preference over the common shareholders, it is not considered as common stock or in-
substance common stock and is therefore classified as available-for-sale debt investment which is measured at its fair value with the
change of fair value recognized as other comprehensive income.
As of December 31, 2021 and 2022, the Company valued available-for-sale debt securities using a market approach by adopting a
backsolve method which benchmarked to recent comparable financing transactions of these investments, and recognized a gain from the
increase of the fair value of RMB30,723 and RMB946,571, respectively. After deducting the tax impact of RMB6,499 and RMB200,235,
the Group recorded RMB24,224 and RMB746,336 in other comprehensive income, among which RMB4,727 and RMB151,299 was
attributed to non-controlling interests.
No impairment charges were recognized for the years ended December 31, 2020, 2021 and 2022.
10. Other Non-current Assets
Other non-current assets consist of the following:
Non-current portion of auto financing receivables
Non-current portion of national subsidy receivable
Long-term deposits
Non-current portion of prepayments for purchase of property, plant and equipment
Non-current portion of receivables of installment payments for battery
Non-current portion of right of use assets – finance lease
Others
Less: Allowance for credit losses
Total
December 31,
2021
2,162,417
1,933,971
636,124
376,675
409,197
66,052
14,328
(49,309)
5,549,455
December 31,
2022
4,501,168
1,227,270
944,768
433,750
221,089
49,205
110,950
(89,641)
7,398,559
Long-term deposit mainly consists of deposits to vendors for guarantee of production capacity as well as rental deposit which will
not be collectible within one year.
F-35
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
11. Accruals and Other Liabilities
Accruals and other liabilities consist of the following:
Payables for purchase of property, plant and equipment
Payable for R&D expenses
Salaries and benefits payable
Current portion of deferred revenue/income
Payables for marketing events
Accrued expenses
Advance from customers
Accrued costs of purchase commitments
Warranty liabilities
Payables for traveling expenses of employees
Interest payables
Current portion of finance lease liabilities
Derivative Liabilities (Note 2(q))
Current portion of deferred construction allowance
Payable to employees for options exercised
Other payables
Total
December 31,
2021
1,458,767
887,593
972,333
746,453
855,984
497,381
638,147
—
518,426
26,212
41,147
27,815
—
32,254
151,158
347,974
7,201,644
December 31,
2022
4,172,758
1,814,746
1,525,366
1,273,779
1,075,693
857,639
833,779
792,786
669,793
44,942
32,271
30,609
16,435
13,307
792
499,667
13,654,362
For the year ended December 31, 2022, in response to the planned products upgrade of certain existing vehicle models, the Group
provided the provision for purchase commitments mainly made for the excessive inventories that are specifically related to these vehicles
with amount of RMB792,786.
12. Borrowings
Borrowings consist of the following:
Short-term borrowing
Bank loan (i)
Current portion of convertible notes (ii)
Current portion of long-term borrowings (iii)
Current portion of loan from joint investor (iv)
Current portion of Asset-backed Securities and Notes (v)
Long-term borrowings:
Bank loan (iii)
Convertible notes (ii)
Asset-backed Securities and Notes (v)
Other financing arrangements
Total
(i) Short-term bank loan
December 31,
2021
December 31,
2022
5,230,000
1,228,278
39,840
456,190
343,654
4,039,210
—
108,320
—
1,129,596
42,260
9,440,626
256,290
430,460
10,155,599
293,945
5,795
—
17,037,138 16,162,925
As of December 31, 2021, the Group obtained short-term borrowings from several banks of RMB5,230,000 in aggregate. The
annual interest rate of these borrowings is approximately 2.95% to 4.45%.
As of December 31, 2022, the Group obtained short-term borrowings from several banks of RMB4,039,210 in aggregate. The
annual interest rate of these borrowings is approximately 1.95% to 3.5%.
F-36
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The short-term borrowings contain covenants including, among others, limitation on liens, consolidation, merger, sale of the Group’s
assets and certain financial measures. The Group is in compliance with all of the loan covenants as of December 31, 2021 and 2022. As
of December 31, 2021 and 2022, certain of the Group’s short-term borrowings were guaranteed by the Company’s subsidiaries or
pledged with trade receivable of RMB440,159 and nil, short-term investments of RMB556,299 and RMB348,230, and restricted cash of
RMB1,123,596 and RMB355,197, respectively.
(ii) Convertible notes
2024 Notes
In February 2019, the Group issued US$650,000 convertible senior notes and additional US$100,000 senior notes (collectively the
“2024 Notes”) to the Notes purchasers (the “Notes Offering”). The 2024 Notes bears interest at a rate of 4.50% per year, payable semi-
annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2019. The 2024 Notes is convertible into the
Company’s American Depositary Shares at the pre-agreed fixed conversion price at the discretion of the holders and will mature for
repayment on February 1, 2024. Holders of the 2024 Notes are entitled to require the Company to repurchase all or part of the 2024
Notes in cash on February 1, 2022 or in the event of certain fundamental changes. In connection with the Notes Offering, the Company
entered into capped call transactions with certain Notes purchasers and/or their respective affiliates and/or other financial institutions (the
“Capped Call Option Counterparties”) and used a portion of the net proceeds of the Notes Offering to pay the cost of such transactions.
In addition, the Company also entered into privately negotiated zero-strike call option transactions with certain Notes purchasers or their
respective affiliates (the “Zero-Strike Call Option Counterparties”) and used a portion of the net proceeds of the Notes Offering to pay
the aggregate premium under such transactions. The Company accounts for the 2024 Notes as a single instruments as a long-term debt.
The debt issuance cost were recorded as reduction to the long-term debts and are amortized as interest expenses using the effective
interest method. The value of the 2024 Notes are measured by the cash received. The cost for the capped call transactions have been
recorded as deduction of additional paid-in capital within total shareholders’ deficit. The zero-strike call option was deemed as a prepaid
forward to purchase the Company’s own shares and recognized as permanent equity at its fair value at inception as a reduction to
additional paid in capital in the consolidated balance sheet. In November 2020, US$7.0 in aggregate principal amount of such Notes were
converted, pursuant to which the Company issued 735 Class A ordinary shares to the holders of such Notes. The balance of the Notes
converted were derecognized and recorded as ordinary shares and additional paid-in capital.
On January 15, 2021, the Company entered into separate and individually privately negotiated agreements with certain holders of its
outstanding 2024 Notes to exchange US$581,685 principal amount of the outstanding 2024 Notes for 62,192,017 ADSs with a
conversion premium of US$56,359 (the “2024 Notes Exchanges”). In connection with the 2024 Notes Exchanges, the Company also
entered into agreements with certain financial institutions to terminate a portion of the capped call transactions and Zero-Strike Call
transactions with the amount corresponding to the portion of the principal amount of the 2024 Notes that were exchanged. With above
termination of the capped call transactions and Zero-Strike Call transactions, the Company received 16,402,643 treasury shares
accordingly.
For the 2024 Notes Exchanges, the 2024 Notes with carrying amount of US$578,902 were derecognised with a corresponding
amount being recognised as share capital and additional paid-in capital. The conversion premium of US$56,359 was recorded as interest
expenses according to ASC 470-20-40-16, which requires a reporting entity to recognize an expense equal to the fair value of the shares
or other consideration issued to induce conversion, i.e., the excess of the fair value of all consideration transferred over the fair value of
the securities transferred pursuant to the original conversion terms. For the terminations of the capped call transactions and Zero-Strike
Call transactions, the amount of the purchase price of the capped call transactions and Zero-Strike Call transactions terminated of
RMB1,849,600 that was previously recorded in the additional paid-in capital was reclassified to treasury stock.
During the year ended December 31, 2021 and 2022, US$3,080 and US$1,642 in aggregate principal amount of such Notes were
converted, pursuant to which the Company issued 316,979 and 172,631 Class A ordinary shares to the holders of such Notes
respectively. The balance of the Notes converted were derecognized and was recorded as ordinary shares and additional paid-in capital.
As of December 31, 2021, the Company reclassified the carrying value of the remaining 2024 Notes with the amount of
RMB1,053,112 in current liabilities to reflect the early redemption right by 2024 Notes holders on February 1, 2022. Subsequently in
2022, no early redemption right were exercised by 2024 Notes holders. As of December 31, 2022, the carrying value of the remaining
2024 Notes with the amount of RMB1,144,464 were classified in non-current liabilities.
F-37
Table of Contents
Affiliate Notes
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
On September 5, 2019, the Group issued US$200,000 convertible senior notes to an affiliate of Tencent Holdings Limited and Mr.
Bin Li, chairman and chief executive officer of the Company (collectively the “Affiliate Notes”). Tencent and Mr. Li each subscribed for
US$100,000 principal amount of the convertible notes, each in two equally split tranches. The 360-day Notes would be convertible into
Class A ordinary shares (or ADSs) of the Company at a conversion price of US$2.98 per ADS at the holder’s option from the 15th day
immediately prior to maturity, and the 3-year Notes will be convertible into Class A ordinary shares (or ADSs) of the Company at a
conversion price of US$3.12 per ADS at the holder’s option from the first anniversary of the issuance date. The holders of the 3-year
Notes will have the right to require the Company to repurchase for cash all of the Notes or any portion thereof on February 1, 2022.
In September and December 2020, all of the 360-day Notes due in 2020 and US$50,000 in aggregate principal amount of the 3-year
Notes due in 2022 were converted, pursuant to which the Company issued 49,582,686 Class A ordinary shares to the holders of such
Notes. Such Notes were derecognized and recorded as ordinary shares and additional paid-in capital. In January 2021, US$22,526
(RMB148,393) in aggregate principal amount of the 3-year Notes due in 2022 were converted, pursuant to which the Company issued
7,219,872 Class A ordinary shares to the holders of such Notes. Such Notes were derecognized and recorded as ordinary shares and
additional paid-in capital. As of December 31, 2021, the balances of these convertible notes outstanding were RMB175,166 in current
liabilities. In August 2022, US$27,474 (RMB189,494) in aggregate principal amount of the 3-year Notes due in 2022 were converted,
pursuant to which the Company issued 8,805,770 Class A ordinary shares to the holders of such Notes. Such Notes were derecognized
and recorded as ordinary shares and additional paid-in capital with amount of RMB 15 and RMB 207,457 respectively. As of December
31, 2022, all of the the 3-year Notes have been converted.
2021 Notes
In January and February 2020, the Company issued convertible notes to several third party investors with an aggregate principal
amount of US$200,000. The Notes issued bore zero interest and matured on February 4, 2021 (collectively the “2021 Notes”). Prior to
maturity, the holder of the Notes has the right to convert the Notes (a) after the six-month anniversary, into ADSs representing Class A
ordinary shares of the Company at an initial conversion price of US$3.07 per ADS or (b) upon the completion of a bona fide issuance of
equity securities of the Company for fundraising purposes, into ADSs representing Class A ordinary shares of the Company at the
conversion price derived from such equity financing. The Notes were recorded in short-term borrowings with interest expenses accrued
over the term using the effective interest method. The debt issuance cost were recorded as reduction to the short-term borrowings and are
amortized as interest expenses using the effective interest method. In July and August 2020, all of such Notes were converted, pursuant
to which the Company issued 65,146,600 ADSs to the holders of such Notes. Such Notes were derecognized and recorded as ordinary
shares and additional paid-in capital.
In March 2020, the Company issued convertible notes to several third party investors with an aggregate principal amount of
US$235,000. The Notes issued bore zero interest and matured on March 5, 2021 (collectively the “2021 Notes”). Prior to maturity,
holders of the Notes had the right to convert either all or part of the principal amount of the Notes into Class A ordinary shares (or ADSs)
of the Company from September 5, 2020, at a conversion price of US$3.50 per ADS, subject to certain adjustments. The Notes were
recorded in short-term borrowings with interest expenses accrued over the term using the effective interest method. The debt issuance
costs were recorded as reduction to the short-term borrowings and are amortized as interest expenses using the effective interest method.
In September and October 2020, all of such Notes were converted, pursuant to which the Company issued 67,142,790 Class A ADSs to
the holders of such Notes. Such Notes were derecognized and recorded as ordinary shares and additional paid-in capital.
F-38
Table of Contents
2026 and 2027 Notes
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
In January 2021, the Group issued US$750,000 convertible senior Notes due 2026 (the “2026 Notes”) and US$750,000 convertible
senior Notes due 2027 (the “2027 Notes”). The 2026 Notes bears no interest and the 2027 Notes bears interest at a rate of 0.50% per
year, which is payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2021. Holders may
convert their 2026 Notes at their option prior to the close of business on the business day immediately preceding August 1, 2025, and
holders may convert their 2027 Notes at their option prior to the close of business on the business day immediately preceding August 1,
2026. The initial conversion price is US$93.06 per ADS for the Notes, subject to customary anti-dilution adjustments. Upon conversion,
the Company will pay or deliver, as the case may be, cash, ADSs, or a combination of cash and ADSs, at the Company’s discretion.
Holders of the 2026 Notes have the right to require the Company to repurchase in cash for all or part of their Notes on February 1, 2024
or in the event of certain fundamental changes at a repurchase price equal to 100% of the principal amount of the Notes to be
repurchased. Holders of the 2027 Notes have the right to require the Company to repurchase in cash for all or part of their Notes on
February 1, 2025 or in the event of certain fundamental changes at a repurchase price equal to 100% of the principal amount of the Notes
to be repurchased, plus accrued and unpaid interest.
The Company early adopted ASU 2020-06 which eliminates the cash conversion accounting models for 2026 Notes and 2027 Notes.
Accordingly, the principal amount of these Notes was reported as one single unit of account in long-term borrowings at its principal
amount, net of debt issuance costs of US$26,340, on the basis of not electing fair value option for the Notes and no substantial premium
to be offered. The Notes are subsequently measured at amortized cost with interest expenses accrued over the term of these Notes using
the effective interest method. As of December 31, 2021, the carrying amount of the Notes were RMB9,440,626.
In 2022, the Group repurchased the aggregated portion of 2026 Notes with the carrying amount of US$190,962 (RMB1,317,106).
As of December 31, 2022, the carrying amount of the remaining Notes were RMB9,011,135.
(iii) Long-term bank loan
Ref. Date of borrowing Lender/Banks Repayment date
Maturity/
As of December 31, 2021
Current portion
according to the
Long-term Outstanding
As of December 31, 2022
Current portion
according to the
Long-term
repayment schedule portion
loan
repayment schedule portion
Outstanding
loan
December 24, 2023
33,440
16,560
16,880
February 8, 2024
48,660
23,280
25,380
1
2
3
4
5
6
7
8
December 24, 2020
February 8, 2021
March 7,2022
June 15, 2022
June 22, 2022
July 25, 2022
July 26, 2022
August 24, 2022
Total
Bank of
Shanghai
Bank of
Shanghai
Bank of
Beijing
Bank of
Shanghai
Hang Seng
Bank
China
Construction
Bank
Industrial and
Commercial
Bank of China
China
Construction
Bank
March 6,2024
June 15, 2025
June 22, 2024
July 25, 2029
July 25, 2029
July 25, 2029
—
—
—
—
—
—
82,100
—
—
149,000
172,980
180,000
—
—
—
—
2,000
147,000
46,320
126,660
60,000
120,000
6,800
—
6,800
—
—
—
—
—
10,200
—
10,200
—
—
—
—
—
—
39,840
42,260
—
19,800
538,780
—
108,320
19,800
430,460
The long-term borrowings contain covenants including, among others, limitation on liens, consolidation, merger and sale of the
Group’s assets and certain financial measures. The Group is in compliance with all of the loan covenants as of December 31, 2021 and
2022. As of December 31, 2021 and 2022, certain of the Group’s long-term borrowings were guaranteed by the Company’s subsidiaries
or pledged with trade receivable of RMB104,424 and nil, respectively.
F-39
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
As of December 31, 2021, the Group had bank facilities with aggregated amount of RMB29,340,000, of which RMB5,180,000,
RMB590,000, RMB3,828,600 were utilized for borrowing, letters of guarantee, banker’s acceptance, respectively.
As of December 31, 2022, the Group had bank facilities with aggregated amount of RMB56,121,492 which consists of non-
collateral based bank facilities of RMB28,411,492 and collateral-based bank facilities of RMB27,710,000. Out of the total non-collateral
bank facilities, RMB2,838,780, RMB3,264,275 and RMB350,000 were used for bank borrowing, issuance of letters of guarantee and
banks’ acceptance notes, respectively. Out of the total collateral-based bank facilities, RMB2,650,000, RMB5,884,500 and RMB300,000
were used for issuance of letters of guarantee, bank’s acceptance notes and letter of credit, respectively.
(iv) Loan from joint investor
On May 18, 2017, the Group entered into a joint investment agreement with Wuhan Donghu New Technology Development Zone
Management Committee (“Wuhan Donghu”) to set up PE WHJV. Wuhan Donghu subscribed for RMB384,000 paid in capital in PE
WHJV with 49% of its shares. On June 30, 2017, September 29, 2017 and April 16, 2018, Wuhan Donghu injected RMB50,000,
RMB100,000 and RMB234,000 paid in capital in cash to PE WHJV, respectively. Pursuant to the investment agreement, Wuhan Donghu
does not have substantive participating rights to PE WHJV, nor is allowed to transfer its equity interest in PE WHJV to other third party.
In addition, within five years or when the net assets of PE WHJV is less than RMB550,000, the Group is obligated to purchase from
Wuhan Donghu all of its interest in PE WHJV at its investment amount paid plus interest at the current market rate promulgated by
PBOC. As such, the Group consolidates PE WHJV. The investment by Wuhan Donghu is accounted for as a loan because it is only
entitled to fixed interest income and subject to repayment within five years or upon breach of the financial covenant. As of December 31,
2021, RMB72,190 of interest were accrued at the benchmark rate of medium and long-term loan announced by PBOC.
In November 2022, the Group repaid the loan to Wuhan Donghu with total consideration of RMB473,200. Upon completion of this
transaction, the Group held 100% of the shares of PE WHJV.
(v) Asset-backed securities and notes
The Group entered into several asset-backed securitization arrangements with third-party financial institutions and set up
securitization vehicles to issue the senior debt securities and notes to third party investors, which are collateralized by the auto financing
receivables (the “transferred financial assets”). The Group also acts as servicer to provide management, administration and collection
services on the transferred financial assets. The Group consolidated the securitization vehicles as economic interests are retained in the
form of subordinated interests. The proceeds from the issuance of debt securities and notes are reported as securitization debt. The
securities and notes are due for repayment when collections on the underlying collateralized assets occur and the amounts are included in
“Current portion of long-term borrowings” or “Long-term borrowings” according to the contractual maturities date of the debt securities
and notes. As of December 31, 2021 and 2022, the balance of current portion of asset-backed securities and notes are RMB343,654 and
RMB1,129,596, and the balance of non-current portion of asset-backed securities and notes are RMB256,290 and RMB293,945,
respectively.
13. Other Non-Current Liabilities
Other non-current liabilities consist of the following:
Deferred revenue
Warranty liabilities
Deferred government grants
Non-current finance lease liabilities
Deferred construction allowance
Others
Total
F-40
December 31,
2021
1,451,313
1,444,551
312,837
31,646
12,298
287,813
3,540,458
December 31,
2022
2,288,111
2,277,144
309,762
14,457
3,555
250,998
5,144,027
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Deferred government grants mainly consist of specific government subsidies for purchase of land use right and buildings, charging
and battery swap equipment, which is amortized using the straight-line method as a deduction of the amortization or depreciation
expense of the relevant assets over their remaining estimated useful life.
Deferred construction allowance consists of long-term payable of construction projects, with payment terms over one year.
14. Leases
The Group has entered into various non-cancellable operating and finance lease agreements for certain offices, warehouses, retail
and service locations, equipment and vehicles worldwide. The Group determines if an arrangement is a lease, or contains a lease, at
inception and record the leases in the financial statements upon lease commencement, which is the date when the underlying asset is
made available for use by the lessor.
The balances for the operating and finance leases where the Group is the lessee are presented as follows within the consolidated
balance sheet:
Operating leases:
Right-of-use assets - operating lease
Current portion of operating lease liabilities
Non-current operating lease liabilities
Total operating lease liabilities
Finance leases:
Right-of-use assets - finance lease
Current portion of finance lease liabilities
Non-current finance lease liabilities
Total finance lease liabilities
The components of lease expenses were as follows:
Lease cost:
Amortization of right-of-use assets
Interest of operating lease liabilities
Expenses for short-term leases within 12 months and other non-lease component
Total lease cost
Other information related to leases where the Group is the lessee is as follows:
Weighted-average remaining lease term:
Operating leases
Finance leases
Weighted-average discount rate:
Operating leases
Finance leases
F-41
December 31,
2021
December 31,
2022
2,988,374
744,561
2,317,193
3,061,754
66,052
27,815
31,646
59,461
7,374,456
1,025,968
6,517,096
7,543,064
49,205
30,609
14,457
45,066
Year Ended December 31,
2022
2021
1,141,740
310,701
407,850
1,860,291
643,895
105,990
315,054
1,064,939
As of December 31,
2021
As of December 31,
2022
6.1 years
3.1 years
11.6 years
2.9 years
5.63 %
5.79 %
5.09 %
5.58 %
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Supplemental cash flow information related to leases where we are the lessee is as follows:
Operating cash outflows from operating leases
Operating cash outflows from finance leases (interest payments)
Financing cash outflows from finance leases
Right-of-use assets obtained in exchange for lease liabilities
For the Year Ended December 31,
2021
707,721
4,199
32,873
2,133,428
2022
1,280,125
4,906
27,489
5,820,041
As of December 31, 2021 and 2022, the maturities of our operating and finance lease liabilities (excluding short-term leases) are as
follows:
2022
2023
2024
2025
2026
2027
Thereafter
Total minimum lease payments
Less: Interest
Present value of lease obligations
Less: Current portion
Long-term portion of lease obligations
As of December 31,
2021
As of December 31
2022
Operating
Leases
904,537
770,669
517,892
365,739
266,738
185,475
634,397
3,645,447
(583,693)
3,061,754
(744,561)
2,317,193
Finance
Leases
Operating
Leases
Finance
Leases
30,900
—
23,516 1,574,692
9,021 1,426,176
106 1,213,535
1,038,903
35
—
837,505
— 5,268,238
63,578 11,359,049
(4,117) (3,815,985)
59,461 7,543,064
(27,815) (1,025,968)
31,646 6,517,096
—
35,151
17,299
6,717
6,277
4,737
2,150
72,331
(27,265)
45,066
(30,609)
14,457
As of December 31, 2021 and 2022, the Group had future minimum lease payments for non-cancelable short-term operating leases
of RMB194,067 and RMB304,213, respectively.
15. Revenue
Revenue by source consists of the following:
Vehicle sales
Sales of packages and provision of power solution
Sales of charging piles
Sales of automotive regulatory credits
Battery upgrade service
Others
Total
2020
Year Ended December 31,
2021
33,169,740
526,171
319,386
516,549
291,218
1,313,359
36,136,423
2022
45,506,581
857,912
405,246
67,291
64,123
2,367,408
49,268,561
15,182,522
244,072
229,781
120,648
5,346
475,564
16,257,933
For the years ended December 31, 2020, 2021 and 2022, revenue recognised at a point in time was RMB15,969,390,
RMB35,416,050 and RMB47,734,716, respectively, and revenue recognised over time was RMB288,543, RMB720,373 and
RMB1,533,845, respectively.
F-42
Table of Contents
16. Deferred Revenue/Income
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The following table shows a reconciliation in the current reporting period related to carried-forward deferred revenue/income.
Deferred revenue/income–beginning of year
Additions
Recognition
Effects on foreign exchange adjustment
Deferred revenue/income–end of year
2020
485,087
1,013,397
(432,069)
(5,161)
1,061,254
Year Ended December 31,
2021
1,061,254
1,934,086
(795,878)
(1,696)
2,197,766
2022
2,197,766
2,483,462
(1,124,186)
4,848
3,561,890
Deferred revenue mainly includes the transaction price allocated to the performance obligations that are unsatisfied, or partially
satisfied, which mainly arises from the undelivered home chargers, the vehicle connectivity service, the extended warranty service, the
points offered to customers as well as battery swapping service embedded in the vehicle sales contract, with unrecognized deferred
revenue balance of RMB2,164,288 and RMB3,546,849 as of December 31, 2021 and 2022, respectively.
The Group expects that approximately 35% of the transaction price allocated to unsatisfied performance obligation as at
December 31, 2022 will be recognized as revenue during the period from January 1, 2023 to December 31, 2023. The remaining 65%
will be recognized during the period from January 1, 2024 to June 30, 2027.
Deferred income includes the reimbursement from a depository bank in connection with the advancement of the Company’s ADS
and investor relations programs in the next five years. The Company initially recorded the payment from the depository bank as deferred
income and then recognized as other income over the beneficial period, with unrecognized deferred income balance of RMB33,478 and
RMB15,041 as of December 31, 2021 and 2022, respectively.
17. Manufacturing in collaboration with JAC
Since 2016, the Group have been partnering with Jianghuai Automobile Group Ltd., or JAC, a major state-owned automobile
manufacturer in China, for the joint manufacturing of the Group’s vehicles. JAC built the JAC-NIO manufacturing plant in Hefei, Anhui
province, the first advanced manufacturing base, or the F1 Plant, for the production of the ES8, the ES6, the EC6, the ET7 and
potentially the Group’s other vehicle models. Further, in September 2022, the Group entered into a manufacturing cooperation agreement
with JAC, under which JAC will jointly manufacture the ET5 and potentially the Group’s other vehicle models in the second advanced
manufacturing base, or the F2 Plant, in NeoPark, a smart electric vehicle industry park at Xinqiao, Hefei. The fees payable to JAC under
the above agreements consist of the following: (i) asset depreciation and amortization with regard to the assets JAC invested and to
invest for the manufacture of NIO models as actually incurred, payable monthly and subject to adjustment annually; (ii) vehicle
production and processing fees recorded on per-vehicle basis, payable monthly and subject to adjustment annually; (iii) purchase amount
of certain production materials; and (iv) relevant tax. In addition, the Group also agreed to pay certain compensation up to a capped
amount for JAC’s investment in F1 Plant, including for the land, factory and equipment. In conjunction with the aforementioned
manufacturing cooperation agreement, in December 2022, the Group and JAC entered into an Asset Transfer Agreement where the
Group agreed to sell and JAC agreed to acquire certain production facilities (the “Transferred Assets”) with a total consideration of
RMB1.7 billion inclusive of tax. As of December 31, 2022, JAC had accepted the Transferred Assets and assumed the legal title of the
Transferred Assets. Considering that (1) the The Transferred Assets are designated to be used for the manufacturing of the Group’s
vehicle models only and do not have substantive alternative use; (2) all costs incurred in relation to the Transferred Assets, including
depreciation and maintenance costs and relevant tax and surcharges, are undertaken by and charged to the Group; (3) the Group also has
the right to obtain the economic benefits from all outputs of the Transferred Assets, management concluded that the Group still retained
the control of the Transferred Assets and this transaction was a failed sale and leaseback transaction with no sales of the Transferred
Assets recognized by the Group. The Transferred Assets continue to be accounted for as the Group’s property, plant and equipment
subject to depreciation. The sales consideration from JAC will be recorded as a financing payable when the Group receives the cash. As
of the date of issuance of this financial statements, JAC had not paid the consideration.
For the years ended December 31, 2020, 2021 and 2022, the aggregate fees to JAC under the above collaboration arrangement were
RMB531,565, RMB715,118 and RMB1,126,523, respectively, and were included in cost of sales.
F-43
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
18. Research and Development Expenses
Research and development expenses consist of the following:
Employee compensation
Design and development expenses
Depreciation and amortization expenses
Rental and related expenses
Travel and entertainment expenses
Others
Total
19. Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of the following:
Employee compensation
Marketing and promotional expenses
Rental and related expenses
Professional services
IT consumable, office supply and other low value consumable
Depreciation and amortization expenses
Other Taxes and Surcharges
Travel and entertainment expenses
Expected credit losses
Others
Total
F-44
For the Year Ended December 31,
2021
2,658,158
1,572,834
214,312
53,846
43,732
48,970
4,591,852
2022
6,684,971
3,276,915
333,097
193,132
111,531
236,615
10,836,261
2020
1,362,231
778,463
255,544
51,123
15,720
24,689
2,487,770
2020
1,687,945
675,142
498,601
307,658
69,954
For the Year Ended December 31,
2021
2,894,308
1,428,290
845,512
521,327
247,828
337,708
198,572
80,726
54,332
269,529
6,878,132
2022
4,532,553
1,775,539
1,336,575
944,160
545,498
484,363
285,076
162,924
48,707
421,724
10,537,119
325,478
70,220
39,328
9,654
248,291
3,932,271
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
20. Redeemable non-controlling interests
Investment in XPT Auto
XPT Auto, the Group’s wholly owned subsidiary issued redeemable preferred share (“XPT Auto PS”) with amount of
RMB1,269,900 in April 2018, to certain third party strategic investors. These third party strategic investors’ contributions in XPT Auto
were accounted for as the Group’s redeemable non-controlling interests and were classified as mezzanine equity. Pursuant to XPT Auto’s
share purchase agreement, the XPT Auto PS issued to third party strategic investors have the same rights as the existing ordinary
shareholder of XPT Auto except that they have following privileges:
Redemption
The holders of XPT Auto PS have the option to request XPT Auto to redeem those shares under certain circumstance: (1) a qualified
initial public offering of XPT Auto has not occurred by the fifth anniversary after the issuance of XPT Auto PS; (2) XPT Auto doesn’t
meet its performance target (revenue and net profit) for each of the year during FY2019 and FY2023; or (3) a deadlock event lasts for 60
working days and cannot be resolved.
The redemption price should be equal to the original issue price plus simple interest on the original issue price at the rate of 10% per
annum minus the dividends paid up to the date of redemption.
Liquidation
In the event of any liquidation, the holders of XPT Auto PS have preference over holders of ordinary shares. On a return of capital
on liquidation, XPT Auto’s assets available for distribution among the investors shall first be paid to XPT Auto PS investors at the
amount equal to the original issue price plus simple interest on the original issue price at the rate of 10% per annum minus the dividends
paid up to the date of liquidation. The remaining assets of XPT Auto shall all be distributed to its ordinary shareholders.
The Company recognized accretion to the respective redemption value of the XPT Auto PS as a reduction of additional paid in
capital over the period starting from issuance date. For the year ended December 31, 2020, the Company recorded RMB104,270 of
accretion on redeemable non-controlling interests to redemption value.
In November 2020, the Company, through its wholly owned subsidiary, purchased all the equity interests in XPT Auto held by its
minority shareholders with a cash consideration of RMB1.6 billion, which equaled to the redemption price. As a result, the Company
indirectly wholly owned XPT Auto thereafter. The Company accounted for such transaction as an equity transaction. The equity interests
held by the minority shareholders, which were recorded as redeemable non-controlling interests with the carrying value of
RMB1.6 billion, were derecognized accordingly.
Investment in NIO China
On April 29, 2020, the Company and certain of its subsidiaries entered into definitive agreements, as amended and supplemented in
May and June 2020, for investments in NIO China, with a group of investors (collectively, the “Strategic Investors”), pursuant to which,
the Strategic Investors agreed to invest an aggregate of RMB7.0 billion in cash into NIO China for its non-controlling interest. In June
and July 2020, the Company received RMB5.0 billion. On September 16, 2020, pursuant to a share transfer agreement, the Company
repurchased 8.612% equity interests owned by one of the Strategic Investors with the total consideration of RMB511,458, consisting of
the actual capital investment plus accrued interest, and the Group assumed the remaining cash consideration obligation of RMB2.0
billion of the strategic investors. On February 2021, the Group, purchased from two of the Strategic Investors an aggregate of 3.305%
equity interests in NIO China for a total consideration of RMB5.5 billion and subscribed for newly increased registered capital of NIO
China at a subscription price of RMB10.0 billion. In September 2021, the Company repurchased 1.418% equity interests from the
strategic investors for a total consideration of RMB2.5 billion and recorded an amount of RMB2,023,534 in accretion on redeemable
non-controlling interests to redemption value. As of December 31, 2022, the Company held 92.114% controlling equity interests in NIO
China.
F-45
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Each of the Strategic Investors has the right to request the Company to redeem their equity interests in NIO China at an agreed price
in case of NIO China’s failure to submit the application for a qualified initial public offering in 48 months commencing from June 29,
2020, failure to complete a qualified initial public offering in 60 months commencing from June 29, 2020, or other events as set forth in
the share purchase agreement. The agreed price is calculated based on each non-controlling shareholder’s cash investment to NIO China
plus an annual interest rate of 8.5%.
As the redemption is at the holders’ option and is upon the occurrence of the events that are not solely within the control of the
Company, these Strategic Investors’ contributions in NIO China were classified as mezzanine equity and is subsequently accreted to the
redemption price using the effective interest method with accretion recorded as a reduction of additional paid in capital.
For the years ended December 31, 2020, 2021 and 2022, the Company recorded RMB207,400, RMB6,586,579 and RMB279,355 of
accretion on redeemable non-controlling interests to redemption value. As of December 31, 2021 and 2022, the balance of redeemable
non-controlling interests was RMB3,277,866 and RMB3,557,221, respectively.
21. Ordinary Shares
Upon inception, each ordinary share was issued at a par value of US$0.00025 per share. Various numbers of ordinary shares have
been issued to share-based compensation award recipients since inception. Each Class A ordinary share shall entitle the holder thereof to
one (1) vote on all matters subject to vote at general meetings of our company, each Class B ordinary share shall entitle the holder thereof
to four (4) votes on all matters subject to vote at general meetings of our company, and each Class C ordinary share shall entitle the
holder thereof to eight (8) votes on all matters subject to vote at general meetings of our company.
Each Class C ordinary share is convertible into one Class A ordinary share, whereas Class A ordinary shares are not convertible into
Class C ordinary shares under any circumstances. Upon any transfer of Class C ordinary shares by a holder thereof to any person or
entity which is not an affiliate of such holder, such Class C ordinary shares are automatically and immediately converted into the equal
number of Class A ordinary shares.
As of December 31, 2021 and 2022, the authorized share capital of the Company is US$1,000 divided into 4,000,000,000 shares,
comprising of: 2,500,000,000 and 2,632,030,222 Class A Ordinary Shares, 132,030,222 and nil Class B Ordinary Shares and
148,500,000 Class C Ordinary Shares, each at a par value of US$0.00025 per share, and 1,219,469,778 shares of a par value of
US$0.00025 each of such class or classes as the board of directors may determine.
In 2020, the Company consummated the follow-on offerings of a total of 82,800,000, 101,775,000 and 78,200,000 American
depositary shares (the “ADSs”) at a price of US$ 5.95, US$17.00 and US$ 39.00 per ADS, respectively.
In 2021, the Company completed the issuance of 53,292,401 ADSs with net proceeds of RMB12,677,554 (US$1,974,000) through
an at-the-market offering.
As disclosed in Note 12 (ii), in 2021 and 2022, certain convertible notes were converted by respective holders, pursuant ot which the
Company issued 69,728,868 and 8,978,401 ADSs, respectively.
Upon the Company’s listing of Class A ordinary shares on the Hong Kong Stock Exchange, all of the Company’s Class B ordinary
shares were converted to Class A ordinary shares pursuant to the conversion notice delivered by the relevant shareholders. The
shareholding structure of Class B ordinary shares and provisions related to Class B ordinary shares have been removed in the Company’s
amended and restated memorandum and articles of association, as approved by the Company’s shareholders at the annual general
meeting held at August 25, 2022.
As of December 31, 2021 and 2022, 4,000,000,000 ordinary shares were authorized, 1,661,749,433 shares and 1,680,220,892 shares
were issued, and 1,643,669,180 shares and 1,662,159,868 shares were outstanding, respectively. The share number excludes 38,884,788
Class A Ordinary Shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuance upon the exercise or
vesting of awards granted under the Company’s share incentive plans.
F-46
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
22. Non-controlling interest
Investment in NIO AI Technology
In March 2021, the Group established a subsdiary named NIO AI Technology by subscribing its ordinary shares with equity interests
of 51% and the remaining interests held by an employee of the Group. In August 2022, the Group subscribed a certain number of Series
Seed Preferred Shares issued by NIO AI Technology. Upon the completion of this transaction, the Group held 96.97% equity interests in
NIO AI Technology and continued to control NIO AI Technology. The Group accounted for the change of equity interests in NIO AI as
an equity transaction by adjusting the carrying value of the non-controlling interests and the Company’s additional paid-in capital with an
amount of RMB184,085.
23. Share-based Compensation
Compensation expenses recognized for share-based awards granted by the Company were as follows:
Cost of sales
Research and development expenses
Selling, general and administrative expenses
Total
For the Year Ended December 31,
2022
66,914
1,323,370
905,612
2,295,896
2021
34,009
406,940
569,191
1,010,140
2020
5,564
51,024
130,506
187,094
There was no income tax benefit recognized in the consolidated statements of comprehensive loss for share-based compensation
expenses and the Group did not capitalize any of the share-based compensation expenses as part of the cost of any assets in the years
ended December 31, 2020, 2021 and 2022.
(a) NIO Incentive Plans
In 2015, the Company adopted the 2015 Stock Incentive Plan (the “2015 Plan”), which allows the plan administrator to grant share
options and restricted shares of the Company to its employees, directors, and consultants.
The Company granted both share options and restricted shares to the employees. The share options and restricted shares of the
Company under 2015 Plan have a contractual term of ten years from the grant date, and vest over a period of four years of continuous
service, one fourth (1/4) of which vest upon the first anniversary of the stated vesting commencement date and the remaining vest ratably
over the following 36 months. Under the 2015 Plan, share options granted to the non-NIO US employees of the Group are only
exercisable upon the occurrence of an initial public offering by the Company.
In 2016, 2017 and 2018, the Board of Directors further approved the 2016 Stock Incentive Plan (the “2016 Plan”), the 2017 Stock
Incentive Plan (the “2017 Plan”) and the 2018 Stock Incentive Plan (the “2018 Plan”). The share options of the Company under 2016,
2017 Plan and 2018 Plans have a contractual term of seven or ten years from the grant date, and vest immediately or over a period of four
or five years of continuous service.
The Group recognized the share options and restricted shares of the Company granted to the employees of the Group on a straight-
line basis over the vesting term of the awards, net of estimated forfeitures.
F-47
Table of Contents
(i) Share Options
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The following table summarizes activities of the Company’s share options under the 2016, 2017 and 2018 Plans for the years ended
December 31, 2020, 2021 and 2022:
Number of
Options
Outstanding
Weighted Weighted
Average
Remaining
Contractual Life
In Years
Average
Exercise
Price
US$
Outstanding as of December 31, 2019
Granted
Exercised
Cancelled
Expired
Outstanding as of December 31, 2020
Granted
Exercised
Cancelled
Expired
Outstanding as of December 31, 2021
Granted
Exercised
Cancelled
Expired
Outstanding as of December 31, 2022
Vested and expected to vest as of December 31,2022
Exercisable as of December 31, 2022
88,843,972
16,077,700
(15,253,500)
(9,030,781)
(1,318,892)
79,318,499
2,468,150
(9,119,048)
(2,143,711)
(25,940)
70,497,950
1,685,000
(4,533,690)
(1,197,777)
(467,608)
65,983,875
65,832,596
55,898,588
2.38
8.09
1.55
3.02
4.49
3.59
13.89
2.31
12.59
19.03
4.76
3.03
2.58
10.76
12.03
3.57
3.56
3.22
6.77
—
—
—
—
6.39
—
—
—
—
5.44
—
—
—
—
4.51
4.51
4.49
Aggregate
Intrinsic
Value
US$
164,363
—
—
—
—
3,581,119
—
—
—
—
1,944,597
—
—
—
—
465,353
464,324
396,734
The total share-based compensation expenses recognized for share options during the years ended December 31, 2020, 2021 and
2022 was RMB177,543, RMB534,641 and RMB379,178, respectively.
The weighted-average grant date fair value for options granted under the Company’s 2016, 2017 and 2018 Plans during the years
ended December 31, 2020, 2021 and 2022 was US$4.03, US$33.54 and US$19.27, respectively, computed using the binomial option
pricing model with the assumptions (or ranges thereof) in the following table:
Exercise price (US$)
Fair value of the ordinary shares on the date of option grant
(US$)
Risk-free interest rate
Exercise multiple
Expected dividend yield
Expected volatility
Expected forfeiture rate (post-vesting)
2020
For the Year Ended December 31,
2021
2022
2.38
- 48.45
2.39
- 42.20
2.39
- 19.91
2.38
0.50 % -
- 48.45
39.54
- 42.20
10.34
- 19.61
2.50 % -
1.08 % -
1.00 %
2.5 x
0 %
55 %
6 %
1.47 %
2.5 x
0 %
55 %
2 %
2.56 %
2.5 x
0 %
56 %
1.5 %
54 % -
2 % -
F-48
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Risk-free interest rate is estimated based on the yield curve of US Sovereign Bond as of the option valuation date. The expected
volatility at the grant date and each option valuation date is estimated based on annualized standard deviation of daily stock price return
of comparable companies with a time horizon close to the expected expiry of the term of the options. The Company has never declared
or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future.
Expected term is the contract life of the options.
As of December 31, 2021 and 2022, there were RMB396,098 and RMB219,781 of unrecognized compensation expenses related to
the stock options granted to the employees, which is expected to be recognized over a weighted-average period of 2.10, 1.32 and 0.77
years, respectively.
(ii) Restricted shares
The fair value of each restricted share granted with service conditions is estimated based on the fair market value of the underlying
ordinary shares of the Company on the date of grant.
Share-based compensation expenses of nil, RMB20,820 and RMB118,700 related to restricted shares granted to the employees of
NIO US was recognized for the years ended December 31, 2020, 2021 and 2022, respectively.
The following table summarizes activities of the Company’s restricted shares to US employees under the 2016 plan:
Unvested at December 31, 2019 and December 31, 2020
Grant
Vested
Forfeited
Unvested at December 31, 2021
Grant
Vested
Forfeited
Unvested at December 31, 2022
Number of Restricted
Weighted Average
Shares Outstanding Grant Date Fair Value
US$
—
1,179,976
(1,728)
(40,052)
1,138,196
2,353,714
(291,069)
(232,483)
2,968,358
—
41.87
41.53
40.09
41.93
16.00
36.44
29.70
23.87
As of December 31, 2021 and 2022, there were RMB283,784 and RMB428,463 of unrecognized compensation expenses related to
restricted shares granted to the employees of NIO US, which is expected to be recognized over a weighted-average period of 3.83 and
3.48 years, respectively.
The following table summarizes activities of the Company’s restricted shares to non-US employees under the 2017 and 2018 plan:
Unvested at December 31, 2020
Granted
Vested
Forfeited
Unvested at December 31, 2021
Granted
Vested
Forfeited
Unvested at December 31, 2022
Number of Restricted
Weighted Average
Shares Outstanding Grant Date Fair Value
US$
1,735,744
22,551,227
(841,014)
(546,016)
22,899,941
31,944,551
(4,687,528)
(3,172,211)
46,984,753
40.05
36.55
39.81
36.22
33.02
15.12
34.49
28.42
22.88
F-49
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
As of December 31, 2021 and 2022, there were RMB472,628 and RMB6,525,925 of unrecognized compensation expenses related to
restricted shares granted to the non-US employees, which is expected to be recognized over a weighted-average period of 3.65 and 3.32
years, respectively.
Share-based compensation expenses of RMB9,551 and RMB437,166 and RMB1,744,712 related to restricted shares granted to the
non-US employees was recognized for years ended December 31, 2020, 2021 and 2022, respectively.
(b) Share-based compensation of subsidiaries
In November 2021, a subsidiary of the Company (“Subsidiary A”) adopted the 2021 Share Incentive Plan (the “A Plan”) which
allows Subsidiary A to grant share options to its employees.
Under the A plan, the share options have a contractual term of ten years from the grant date, and vest over a period of four years of
continuous service, one fourth (1/4) of which vest upon the first anniversary of the stated vesting commencement date and the remaining
vest ratably over the following 36 months.
Before the completion of Subsidiary A’s possible future initial public offering and listing, its employees are entitled to convert the
vested share options to the Class A ordinary shares of the Company at a fixed conversion rate. The corresponding share options will be
cancelled if the conversion right is exercised.
The following table summarizes activities of A Plan for the year ended December 31, 2022:
Outstanding as of December 31, 2020
Granted
Outstanding as of December 31, 2021
Vested
Outstanding as of December 31, 2022
Number of
Options
Outstanding
—
31,931,249
31,931,249
(1,387,401)
30,543,848
Weighted
Average
Exercise
Price
US$
—
0.00001
0.00001
0.00001
0.00001
Weighted
Average
Remaining
Contractual Life
In Years
—
—
9.84
—
8.84
Aggregate
Intrinsic
Value
US$
—
—
35,888
—
34,337
The weighted average grant date fair value of options granted was US$1.12 per share. The estimated fair value of each option
granted is estimated on the date of grant using the binominal option-pricing model with the assumptions (or ranges thereof) in the
following table:
Fair value of the ordinary shares on the date of option grant (US$)
Risk-free interest rate
Expected term (in years)
Expected dividend yield
Expected volatility
Expected forfeiture rate (post-vesting)
For the Year Ended
December 31,
2021 and 2022
1.00-1.01
1.58 %
10
0 %
52 %
2 %
For the year ended December 31, 2021 and 2022, total share-based compensation expenses for the share options granted under A
Plan were RMB17,513 and RMB53,306, respectively. As of December 31, 2021 and 2022, there were RMB211,178 and RMB170,091 of
unrecognized share-based compensation expenses related to the share options granted. The expenses were expected to be recognized
over a weighted-average period of 3.2 and 2.2 years, respectively.
F-50
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Table of Contents
24. Taxation
(a) Income taxes
Cayman Islands
The Company was incorporated in the Cayman Islands and conducts most of its business through its subsidiaries located in
Mainland China, Hong Kong, United States, United Kingdom, Germany, Norway and Netherlands. Under the current laws of the
Cayman Islands, the Company is not subject to tax on either income or capital gain. Additionally, upon payments of dividends to the
shareholders, no Cayman Islands withholding tax will be imposed.
PRC
Effective January 1, 2008, the Enterprise Income Tax Law (the “EIT Law”) in China unifies the enterprise income tax rate for the
entities incorporated in China at 25%, unless they are eligible for preferential tax treatment, which will be granted to companies
conducting businesses in certain encouraged sectors. NIO R&D, the Company’s subsidiary engaging in design and technology
development activities, was qualified as a “high and new technology enterprise” (“HNTE”) for the fiscal years from 2022 to 2024, which
entitled the entity a preferential tax rate of 15%. The qualification as HNTE is subject to self-evaluation, and the relevant documents
should be retained for future examination purpose. Upon the expiration of qualification, re-accreditation of certification from the relevant
authorities is necessary for the entities to continue enjoying the preferential tax treatment. The remaining Chinese companies are subject
to enterprise income tax (“EIT”) at a uniform rate of 25%.
Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its implementation rules which
became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by a foreign investment enterprise in the
PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s
jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. Under the taxation
arrangement between the PRC and Hong Kong, a qualified Hong Kong tax resident which is the “beneficial owner” and directly holds
25% or more of the equity interest in a PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands,
where the Company was incorporated, does not have a tax treaty with PRC.
The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto
management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC
income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto
management body” as “the place where the exercising, in substance, of the overall management and control of the production and
business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts
and circumstances, the Group does not believe that it is likely that its operations outside of the PRC will be considered a resident
enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, there is uncertainty as to
the application of the EIT Law. Should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be
subject to PRC income tax on worldwide income at a uniform tax rate of 25%.
According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC effective from 2008
onwards, enterprises engaging in research and development activities are entitled to claim 200% or 175% of their qualified research and
development expenses so incurred as tax deductible expenses when determining their assessable profits for the year (‘Super Deduction’).
The additional deduction of 100% or 75% of qualified research and development expenses can only be claimed directly in the annual EIT
filing and subject to the approval from the relevant tax authorities.
Hong Kong
Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries of the Group incorporated in Hong Kong are subject to
8.25% profit tax on the first HKD2,000 taxable income and 16.5% profit tax on the remaining taxable income generated from operations
in Hong Kong. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to
any Hong Kong withholding tax.
F-51
Table of Contents
Other Countries
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The maximum applicable income tax rates of other countries where the Company’s subsidiaries having significant operations for
the years ended December 31, 2020, 2021 and 2022 are as follows:
United States
United Kingdom
Germany
Norway
Netherlands
Composition of income tax expense for the periods presented are as follows:
Current income tax expense
Deferred income tax expense
Total
2022
For the Year Ended December 31,
2021
29.84 %
19.00 %
32.98 %
22.00 %
25.00 %
2020
29.84 %
19.00 %
32.98 %
—
—
29.84 %
19.00 %
32.98 %
22.00 %
25.80 %
2020
For the Year Ended December 31,
2021
23,565
18,700
42,265
6,368
—
6,368
2022
62,348
(7,245)
55,103
Reconciliations of the income tax expense computed by applying the PRC statutory income tax rate of 25% to the Group’s income
tax expense of the years presented are as follows:
Loss before income tax expense
Income tax benefit computed at PRC statutory income tax rate of 25%
Non-deductible expenses
Foreign tax rates differential
Additional 100%/75% tax deduction for qualified research and development expenses
FDII Deduction
Tax exempted interest income
Non-taxable offshore income
US tax credits
Prior year True-ups
Effect of tax rate change
Prior year adjustments
Others
Change in valuation allowance
Income tax expense
For the Year Ended December 31,
2021
(3,974,684)
(993,671)
29,325
100,690
(546,805)
—
(2,194)
—
(30,273)
286,693
—
—
(1,206)
1,199,706
42,265
2020
(5,297,714)
(1,324,429)
47,151
(81,668)
(36,775)
—
—
(523,276)
(21,633)
—
—
(4,324)
1,241
1,950,081
6,368
2022
(14,382,001)
(3,595,500)
23,484
395,543
(750,736)
(10,356)
(8,847)
—
(45,446)
110,581
490,855
—
(5,154)
3,450,679
55,103
The PRC statutory income tax rate was used because the majority of the Group’s operations are based in PRC.
(b) Deferred tax
The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be
more-likely-than-not realized. This assessment primarily considers the nature, frequency and extent of the losses incurred and other
historical objective evidences, as well as the considerations of forecasts of future profitability. These assumptions require significant
judgment on the forecasts of future taxable income. The PRC statutory income tax rate of 25% or applicable preferential income tax rates
were applied when calculating deferred tax assets.
F-52
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group’s deferred tax assets and liabilities consist of the following components:
Deferred tax assets
Net operating loss carry-forwards
Accrued and prepaid expenses
Deferred revenue
Tax credit carry-forwards
Property, plant and equipment, net
Unrealized financing income
Intangible assets
Allowance against receivables
Deferred rent
Share-based compensation
Write-downs of inventory
Advertising expenses in excess of deduction limit
Equity securities with readily determinable fair value
Unrealized foreign exchange loss
Others
Less: Valuation allowance
Subtotal
Deferred tax liabilities
Equity securities without readily determinable fair value
Equity securities with readily determinable fair value
Equity method investments
Available for sale debt investment
Property, plant and equipment, net
Deferred rent
Unrealized foreign exchange loss
Subtotal
Total deferred tax liabilities, net
2020
As of December 31,
2021
2022
6,831,387
534,693
251,778
233,326
64,191
40,800
36,702
9,027
9,791
6,857
1,162
507
—
(971)
269
(8,019,519)
—
—
—
—
—
—
—
—
—
—
7,294,844
1,136,278
559,815
243,198
—
28,796
85,439
19,500
—
10,695
713
705
—
—
711
(9,216,725)
163,969
(15,975)
(2,725)
—
(6,499)
(143,512)
(18,752)
(1,705)
(189,168)
(25,199)
9,711,744
1,666,519
940,633
301,437
—
33,140
89,328
27,386
29,731
6,951
452
188
150
1,704
4,224
(12,727,355)
86,232
(6,435)
—
(5,170)
(206,734)
(86,082)
—
—
(304,421)
(218,189)
Full valuation allowances have been provided where, based on all available evidence, management determined that deferred tax
assets are not more likely than not to be realizable in future tax years. Movement of valuation allowance is as follow:
Valuation allowance
Balance at beginning of the year
Additions
Balance at end of the year
2020
As of December 31,
2021
2022
6,879,030
1,140,489
8,019,519
8,019,519
1,199,706
9,216,725
9,216,725
3,510,630
12,727,355
F-53
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group has tax losses arising in Mainland China of RMB37,979,030 that will expire in one to ten years for deduction against
future taxable profit.
Loss expiring in 2023
Loss expiring in 2024
Loss expiring in 2025
Loss expiring in 2026
Loss expiring in 2027
Loss expiring in 2028
Loss expiring in 2029
Loss expiring in 2030
Loss expiring in 2031
Loss expiring in 2032
Total
1,213,835
2,356,711
4,094,099
7,191,472
9,090,262
1,606,792
5,334,423
—
—
7,091,436
37,979,030
The Group has tax losses arising in Hong Kong of RMB2,958,339 for which could be carried forward indefinitely against future
taxable income. The Group has tax losses arising in United States of RMB4,124, RMB566,143 and RMB1,650,179 that will expire in
fourteen, fifteen and infinite years for deduction against future taxable income. As of December 31, 2021 and 2022, the Group provided
full valuation allowances for above net operating loss carry-forwards.
Uncertain Tax Position
The Group did not identify any significant unrecognized tax benefits for each of the periods presented. The Group did not incur any
interest related to unrecognized tax benefits, did not recognize any penalties as income tax expense and also does not anticipate any
significant change in unrecognized tax benefits within 12 months from December 31, 2022.
Tax years subject to examination by major jurisdictions
In general, the PRC tax authorities have up to five years to review a company’s tax filings. Accordingly, tax filings of the Company’s
PRC subsidiaries and VIEs for tax years 2018 through 2022 remain subject to the review by the relevant PRC tax authorities.
25. Loss Per Share
Basic loss per share and diluted loss per share have been calculated in accordance with ASC 260 on computation of earnings per
share for the years ended December 31, 2020, 2021 and 2022 as follows:
Numerator:
Net loss
Accretion on redeemable non-controlling interests to redemption value
Net loss attributable to non-controlling interests
Net loss attributable to ordinary shareholders of NIO Inc. for basic/dilutive net loss
per share
Denominator:
For the Year Ended December 31,
2021
2022
2020
(5,304,082)
(311,670)
4,962
(4,016,949)
(6,586,579)
31,219
(14,437,104)
(279,355)
157,014
(5,610,790)
(10,572,309)
(14,559,445)
Weighted-average number of ordinary shares outstanding – basic and diluted
Basic and diluted net loss per share attributable to ordinary shareholders of NIO
1,182,660,948
1,572,702,112
1,636,999,280
Inc.
(4.74)
(6.72)
(8.89)
F-54
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
For the years ended December 31, 2020, 2021 and 2022, the Company had potential ordinary shares, including non-vested restricted
shares, option granted and convertible notes. As the Group incurred losses for the years ended December 31, 2020, 2021 and 2022, these
potential ordinary shares were anti-dilutive and excluded from the calculation of diluted net loss per share of the Company. The weighted
average numbers of these potential ordinary shares outstanding are as following:
For the Year Ended December 31,
2021
2020
2022
4,051,753
55,132,378
37,671,003
96,855,134
Restricted shares
Outstanding weighted average options granted
Convertible notes
Total
26. Related Party Balances and Transactions
—
52,558,756
183,942,782
236,501,538
1,358,110
56,768,907
45,323,169
103,450,186
The principal related parties with which the Group had transactions during the years presented are as follows:
Name of Entity or Individual
Kunshan Siwopu Intelligent Equipment Co., Ltd.
Nanjing Weibang Transmission Technology Co., Ltd.
Wuhan Weineng Battery Assets Co., Ltd.
Xunjie Energy (Wuhan) Co., Ltd.
Jianglai Advanced Manufacturing Technology (Anhui) Co., Ltd.
Beijing Bit Ep Information Technology Co., Ltd.
Beijing Weixu Business Consulting Co., Ltd.
Beijing Yiche Information Science and Technology Co., Ltd.
Beijing Yiche Interactive Advertising Co., Ltd.
Hefei Chuangwei Information Consultation Co., Ltd.
Huang River Investment Limited
Ningbo Meishan Bonded Port Area Weilan Investment Co., Ltd.
Ningbo Meishan Free Trade Port Weilai Xinneng Investment
Management Co., Ltd.
Serene View Investment Limited
Shanghai Weishang Business Consulting Co., Ltd.
Shanghai Yiju Information Technology Co., Ltd.
Tianjin Boyou Information Technology Co., Ltd.
Wistron Info Comm (Kunshan) Co., Ltd.
Xtronics Innovation Ltd.
Relationship with the Company
An investee of the Group
An investee of the Group
An investee of the Group
An investee of the Group
An investee of the Group
Controlled by Principal Shareholder
Significantly influenced by Principal Shareholder
Controlled by Principal Shareholder
Controlled by Principal Shareholder
Controlled by Principal Shareholder
Controlled by Principal Shareholder
Controlled by Principal Shareholder
Significantly influenced by Principal Shareholder
Controlled by Principal Shareholder
Significantly influenced by Principal Shareholder
Controlled by Principal Shareholder
Controlled by Principal Shareholder
Non-controlling shareholder of subsidiary
Non-controlling shareholder of subsidiary
In December 2020, Mr. Bin Li resigned as chairman of the Board in Beijing Bitauto Interactive Technology Co., Ltd.. Since then,
Beijing Bitauto Interactive Technology Co., Ltd., Beijing Xinyi Hudong Guanggao Co., Ltd., Bite Shijie (Beijing) Keji Co., Ltd. and
Beijing Chehui Hudong Guanggao Co., Ltd. were no longer controlled by Mr. Bin Li, and were no longer the Group’s related parties.
In February 2022, the Group disposed its equity interests in Suzhou Zenlead XPT New Energy Technologies Co., Ltd.. Since then,
Suzhou Zenlead was no longer the Group’s related party.
F-55
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
(a) The Group entered into the following significant related party transactions:
(i) Provision of service
For the years ended December 31, 2020, 2021 and 2022, service income was primarily generated from property management ，
administrative support, research and development services and BaaS battery buy-out services the Group provided to its related parties.
Wuhan Weineng Battery Assets Co., Ltd.
Nanjing Weibang Transmission Technology Co., Ltd.
Beijing Weixu Business Consulting Co., Ltd.
Total
(ii) Acceptance of advertising and IT support services
Tianjin Boyou Information Technology Co., Ltd.
Beijing Bit Ep Information Technology Co., Ltd.
Beijing Yiche Interactive Advertising Co., Ltd.
Beijing Chehui Hudong Guanggao Co., Ltd.
Beijing Xinyi Hudong Guanggao Co., Ltd.
Beijing Yiche Information Science and Technology Co., Ltd.
Shanghai Yiju Information Technology Co., Ltd.
Bite Shijie (Beijing) Keji Co., Ltd.
Total
(iii) Cost of manufacturing consignment
Suzhou Zenlead XPT New Energy Technologies Co., Ltd.
2020
For the Year Ended December 31,
2021
56,095
1,586
220
57,901
38
1,523
—
1,561
2022
120,967
1,683
37
122,687
For the Year Ended December 31,
2021
2022
2020
1,594
4,159
—
92,356
39,919
280
142
47
138,497
217
4,533
472
—
—
—
—
—
5,222
8,984
—
—
—
—
—
—
—
8,984
For the Year Ended December 31,
2021
89,286
2020
174,680
2022
—
In February 2022, Suzhou Zenlead XPT New Energy Technologies Co., Ltd. paid considerations of RMB 46,610 to the Group to
settle the outstanding warranty obligations to the Group in connection with the manufacturing consignment of batteries for the Group.
(iv) Purchase of raw material or property, plant and equipment
Kunshan Siwopu Intelligent Equipment Co., Ltd.
Nanjing Weibang Transmission Technology Co., Ltd.
Xunjie Energy (Wuhan) Co., Ltd.
Total
F-56
For the Year Ended December 31,
2021
876,510
213,867
67,350
1,157,727
2020
22,797
114,329
460
137,586
2022
728,096
248,604
90,132
1,066,832
Table of Contents
(v) Sales of goods
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Wuhan Weineng Battery Assets Co., Ltd.
Hefei Chuangwei Information Consultation Co., Ltd.
Shanghai Weishang Business Consulting Co., Ltd.
Beijing Yiche Interactive Advertising Co., Ltd.
Kunshan Siwopu Intelligent Equipment Co., Ltd.
Beijing Bit Ep Information Technology Co., Ltd.
Beijing Bitauto Interactive Technology Co., Ltd.
Beijing Yiche Information Science and Technology Co., Ltd.
Total
(vi) Acceptance of R&D and maintenance service
For the Year Ended December 31,
2021
4,138,187
—
157
485
370
—
—
—
4,139,199
2020
290,135
—
—
1,453
—
4,402
1,974
525
298,489
2022
3,103,871
1,798
229
—
—
—
—
—
3,105,898
Jianglai Advanced Manufacturing Technology (Anhui) Co., Ltd.
Kunshan Siwopu Intelligent Equipment Co., Ltd.
Wuhan Weineng Battery Assets Co., Ltd.
Xunjie Energy (Wuhan) Co., Ltd.
Ningbo Meishan Free Trade Port Weilai Xinneng Investment Management Co., Ltd.
Suzhou Zenlead XPT New Energy Technologies Co., Ltd.
Total
—
1,449
—
—
—
1,953
3,402
—
7,265
—
929
—
—
8,194
2022
107,144
13,956
8,508
3,735
3,015
—
136,358
For the Year Ended December 31,
2021
2020
(vii) Loan from related party
Beijing Bitauto Interactive Technology Co., Ltd.
For the Year Ended December 31,
2021
2022
—
—
2020
260,000
In 2020, the Company signed loan agreements with Beijing Bitauto Interactive Technology Co., Ltd. for an aggregate loan amount
of RMB260,000 at an interest rate of 6%. As of December 31, 2021, the loans have been fully repaid by the Company.
(viii) Sale of raw material or property, plant and equipment
Wuhan Weineng Battery Assets Co., Ltd.
Wistron Info Comm (Kunshan) Co., Ltd.
Total
(ix) Convertible notes issued to related parties and interest accrual
Huang River Investment Limited
Serene View Investment Limited
Total
F-57
For the Year Ended December 31,
2021
2022
2020
120
358
478
—
—
—
1,012
—
1,012
For the Year Ended December 31,
2021
15,316
—
15,316
2020
22,018
101,927
123,945
2022
13,712
—
13,712
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
(x) Purchase of equity investee
Weilan (Note 9)
(b) The Group had the following significant related party balances:
(i) Amounts due from related parties
Wuhan Weineng Battery Assets Co., Ltd.
Kunshan Siwopu Intelligent Equipment Co., Ltd.
Hefei Chuangwei Information Consultation Co., Ltd.
Nanjing Weibang Transmission Technology Co., Ltd.
Shanghai Weishang Business Consulting Co., Ltd.
Total
(ii) Amounts due to related parties
Kunshan Siwopu Intelligent Equipment Co., Ltd.
Wuhan Weineng Battery Assets Co., Ltd.
Jianglai Advanced Manufacturing Technology (Anhui) Co., Ltd.
Nanjing Weibang Transmission Technology Co., Ltd.
Xunjie Energy (Wuhan) Co., Ltd.
Ningbo Meishan Free Trade Port Weilai Xinneng Investment Management Co., Ltd.
Wistron Info Comm (Kunshan) Co., Ltd.
Xtronics Innovation Ltd.
Tianjin Boyou Information Technology Co., Ltd.
Suzhou Zenlead XPT New Energy Technologies Co., Ltd.
Beijing Bit Ep Information Technology Co., Ltd.
Beijing Yiche Interactive Advertising Co., Ltd.
Total
(iii) Short-term borrowing and interest payable
Huang River Investment Limited
(iv) Long-term borrowing
Huang River Investment Limited
F-58
2020
Year Ended December 31,
2021
50,000
—
2022
—
As of December 31,
2021
1,563,757
—
—
268
—
1,564,025
2022
1,376,584
8,647
2,032
283
148
1,387,694
As of December 31,
2021
426,420
—
—
58,025
32,186
—
2,339
1,161
—
165,219
1,350
500
687,200
2022
262,712
58,497
23,279
22,293
14,517
3,015
167
83
48
—
—
—
384,611
As of December 31,
2021
381,785
2022
3,918
As of December 31,
2021
—
2022
208,938
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
27. Commitment and Contingencies
(a) Capital commitments
Capital expenditures contracted for at the balance sheet dates but not recognized in the Group’s consolidated financial statements are
as follows:
Property, plant and equipment
Leasehold improvements
Total
(b) Contingencies
As of December 31,
2021
2,987,743
392,910
3,380,653
2022
4,541,383
807,666
5,349,049
Between March and July 2019, several putative securities class action lawsuits were filed against the Company, certain of the
Company’s directors and officers, the underwriters in the IPO and the process agent, alleging, in sum and substance, that the Company’s
statements in the Registration Statement and/or other public statements were false or misleading and in violation of the U.S. federal
securities laws. Some of these actions have been withdrawn, transferred or consolidated. Currently, two securities class actions remain
pending in the U.S. District Court for the Eastern District of New York (E.D.N.Y.) and Southern District of New York (S.D.N.Y.). In the
E.D.N.Y. action, the Company and other defendants filed their Motion to Dismiss on October 19, 2020. Certain of the Company’s
directors and officers, who were named as defendants in this action, joined the company’s Motion. On August 12, 2021, the Court denied
the Motion to Dismiss. The action has since proceeded to the discovery stage, which is currently ongoing. Briefing on Plaintiffs’ Motion
for Class Certification was completed in December 2022, with a ruling still pending. In the New York county action, by an order dated
March 23, 2021, the Court granted the plaintiffs’ motion to lift the stay in favor of the federal action. Plaintiffs subsequently filed an
amended complaint on April 2, 2021.The Company and other defendants filed a motion to dismiss on May 17, 2021. Briefing on the
Motion to Dismiss was completed on August 2, 2021. The Court’s decision on the Motion is pending. On October 4, 2021, the Court
granted the Company and other Defendants’ Motion to Dismiss. Plaintiffs subsequently filed a notice of appeal to the Appellate Division
of the New York State Court. On December 8, 2022, the Appellate Division affirmed the dismissal of Plaintiffs’ claims.
On March 22, 2021, two individual plaintiffs filed a complaint in the Superior Court of the State of California, County of Santa
Clara against the Company, several of its subsidiaries and certain individual defendants. Plaintiffs allege that they were former
employees or contractors of the Company and its subsidiaries and that they had been discriminated and wrongfully terminated by the
Company and its subsidiaries, allegedly in violation of various state and federal laws. Plaintiffs seek compensatory damages, including
back pay, equity and lost earnings, the amounts of which have yet to be ascertained. On July 7, 2021, two of the Company’s subsidiaries
filed a request to remove the case from state to federal court. Plaintiffs opposed the removal. On May 3, 2022, the Federal District Court
remanded the case to the state court. On June 2, 2022, the Company filed a motion to quash service of the complaint for lack of personal
jurisdiction with the Superior Court of the State of California. On September 22, 2022, the Court issued an order finding that Plaintiffs
have not met their burden to establish the court’s jurisdiction over the Company, but also granted limited jurisdictional discovery. The
Company is conferring with co-defendants and Plaintiffs regarding production of documents.
Between August and September 2022, two complaints were filed against the Company, its CEO and its CFO in the federal district
court for the Southern District of New York (S.D.N.Y.), in the actions captioned Saye v. NIO Inc. et al., Case No. 1:22-cv-07252
(S.D.N.Y.) and Bohonok v. NIO Inc. et al., Case No. 1:22-cv-07666 (S.D.N.Y.). Relying on a short seller report, these complaints allege
that certain of the Company’s public disclosures between Q3 2020 and Q1 2022 contained false statements or omissions in violation of
the Securities Exchange Act of 1934. On December 14, 2022, the Court consolidated the two actions and appointed lead plaintiff. The
lead plaintiff filed an amended complaint on February 28, 2023, to which the Company will respond in due course.
These actions remain in their preliminary stages. The Company is currently unable to determine the outcomes of these actions or any
estimate of the amount or range of any potential loss, if any, associated with resolution of such lawsuits, if they proceed.
F-59
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Group is subject to legal proceedings and regulatory actions in the ordinary course of business, such as disputes with landlords,
suppliers, employees, etc. The results of such proceedings cannot be predicted with certainty, but the Group does not anticipate that the
final outcome arising out of any of such matters will have a material adverse effect on the consolidated balance sheets, comprehensive
loss or cash flows on an individual basis or in the aggregate. As of December 31, 2021 and 2022, other than as disclosed above, the
Group is not a party to any material legal or administrative proceedings.
28. Subsequent Events
No subsequent event which had a material impact on the Group was identified through the date of issuance of the financial
statements.
29. Parent Company (the “Company”) Only Financial Information
The Company performed a test on the restricted net assets of its consolidated subsidiaries and VIEs in accordance with Securities
and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that it was
applicable for the Company to disclose the financial information for the Company only.
The subsidiaries did not pay any dividends to the Company for the years presented. Certain information and footnote disclosures
generally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The footnote disclosures contain
supplemental information relating to the operations of the Company, as such, these statements are not the general-purpose financial
statements of the reporting entity and should be read in conjunction with the notes to the consolidated financial statements of the
Company.
F-60
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Company did not have significant capital and other commitments, or guarantees as of December 31, 2022.
Condensed Balance Sheets
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash
Short-term investments
Amounts due from subsidiaries of Group
Amounts due from related parties
Prepayments and other current assets
Total current assets
Non-current assets:
Investments in subsidiaries and VIEs
Total non-current assets
Total assets
LIABILITIES
Current liabilities:
Amounts due to subsidiaries of the Group
Current portion of long-term borrowings
Accruals and other liabilities
Total current liabilities
Long-term borrowings
Deferred revenue
Total non-current liabilities
Total liabilities
SHAREHOLDERS’ EQUITY
Class A Ordinary Shares
Class B Ordinary Shares
Class C Ordinary Shares
Treasury shares
Additional paid in capital
Accumulated other comprehensive loss
Accumulated deficit
Total shareholders’ equity
Total liabilities and shareholders’ equity
2021
RMB
As of December 31,
2022
RMB
2,207,347
1,123,596
11,495,387
138,415
80
91,252
15,056,077
30,541,632
30,541,632
45,597,709
25,348
1,228,278
179,765
1,433,391
9,440,625
13,769
9,454,394
10,887,785
7,076,550
—
696,460
6,657,631
87
114,263
14,544,991
21,328,304
21,328,304
35,873,295
1,775,951
—
73,580
1,849,531
10,155,599
—
10,155,599
12,005,130
2022
US$
Note 2(e)
1,026,003
—
100,977
965,266
13
16,567
2,108,826
3,092,313
3,092,313
5,201,139
257,489
—
10,668
268,157
1,472,423
—
1,472,423
1,740,580
2,418
220
254
(1,849,600)
92,467,072
(276,300)
(55,634,140)
34,709,924
45,597,709
2,668
—
254
(1,849,600)
94,593,062
1,036,011
(69,914,230)
23,868,165
35,873,295
387
—
37
(268,167)
13,714,705
150,208
(10,136,611)
3,460,559
5,201,139
F-61
Table of Contents
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
Condensed Statements of Comprehensive Loss
Operating expenses:
Selling, general and administrative
Total operating expenses
Loss from operations
Interest and investment income
Interest expense
Gain on extinguishment of debt
Equity in loss of subsidiaries and VIEs
Other income/(loss), net
Loss before income tax expense
Income tax expense
Net loss
Accretion on redeemable non-controlling interests to redemption value
Net loss attributable to ordinary shareholders of NIO Inc.
Net loss
Total comprehensive loss
Accretion on redeemable non-controlling interests to redemption value
Comprehensive loss attributable to ordinary shareholders of NIO Inc.
Condensed Statements of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash (used in)/provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by/(used in) financing activities
Effects of exchange rate changes on cash and cash equivalents
NET INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
Cash, cash equivalents and restricted cash at beginning of the year
Cash, cash equivalents and restricted cash at end of the year
F-62
For the Year ended December 31,
2020
RMB
2021
RMB
2022
RMB
(7,463)
(7,463)
(7,463)
10,086
(312,662)
—
(5,089,371)
100,290
(5,299,120)
—
(5,299,120)
(311,670)
(5,610,790)
(5,299,120)
(5,161,524)
(311,670)
(5,473,194)
(4,735)
(4,735)
(4,735)
61,292
(471,270)
—
(3,632,893)
61,876
(3,985,730)
—
(3,985,730)
(6,586,579)
(10,572,309)
(3,985,730)
(4,196,578)
(6,586,579)
(10,783,157)
(24,039)
(24,039)
(24,039)
207,057
(113,277)
138,332
(14,138,689)
(351,874)
(14,282,490)
2,400
(14,280,090)
(279,355)
(14,559,445)
(14,280,090)
(12,967,779)
(279,355)
(13,247,134)
2022
US$
Note 2(e)
(3,485)
(3,485)
(3,485)
30,020
(16,424)
20,056
(2,049,917)
(51,016)
(2,070,766)
348
(2,070,418)
(40,503)
(2,110,921)
(2,070,418)
(1,880,150)
(40,503)
(1,920,653)
For The Year ended December 31,
2020
RMB
2021
RMB
2022
RMB
2022
US$
Note 2(e)
(2,460,216)
(8,697)
(4,949,308)
(717,582)
(12,998,602)
(40,770,898)
9,140,766
1,325,286
37,867,127
(246,484)
22,382,871
(445,787)
(1,135,316)
689,465
(164,605)
99,963
22,161,825
11,629
22,173,454
(18,842,511)
22,173,454
3,330,943
3,745,607
3,330,943
7,076,550
543,062
482,941
1,026,003
Table of Contents
Basis of presentation
NIO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
The Company’s accounting policies are the same as the Group’s accounting policies with the exception of the accounting for the
investments in subsidiaries and VIEs.
For the company only financial information, the Company records its investments in subsidiaries and VIEs under the equity method
of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures.
Such investments are presented on the Balance Sheets as “Investments in subsidiaries and VIEs” and shares in the subsidiaries and
VIEs’ loss are presented as “Equity in loss of subsidiaries and VIEs” on the Statements of Comprehensive Loss. The parent company
only financial information should be read in conjunction with the Group’s consolidated financial statements.
F-63
THE SYMBOL “[***]”DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED
FROM THE EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL, AND (ii) IS THE TYPE THAT
THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL
Exhibit 4.46
MANUFACTURING COOPERATION AGREEMENT
AMONG
NIO AUTOMOBILE TECHNOLOGY (ANHUI) CO., LTD. (蔚来汽车科技（安徽）有限公司)
NIO AUTOMOBILE (ANHUI) CO., LTD. (蔚来汽车（安徽）有限公司)
AND
ANHUI JIANGHUAI AUTOMOBILE GROUP CO., LTD. (安徽江淮汽车集团股份有限公司)
Dated September 2022
Manufacturing Cooperation Agreement
This Manufacturing Cooperation Agreement (this “Agreement”), dated as of September 2022, is made by and
among:
NIO Automobile Technology (Anhui) Co., Ltd. (蔚来汽车科技（安徽）有限公司)
Address: Building F, Hengchuang Intelligent Technology Park, 3963 Susong Road, Hefei Economic and
Technological Development Zone, Anhui Province, China
Telephone:
Facsimile:
hereinafter referred to as “NIO Tech”;
NIO Automobile (Anhui) Co., Ltd. (蔚来汽车（安徽）有限公司)
Address: Building F, Hengchuang Intelligent Technology Park, 3963 Susong Road, Hefei Economic and
Technological Development Zone, Anhui Province, China
Telephone:
Facsimile:
hereinafter referred to as “NIO Anhui”;
And
Anhui Jianghuai Automobile Group Co., Ltd. (安徽江淮汽车集团股份有限公司)
Address: 176 Dongliu Road, Hefei City, Anhui Province
Telephone:
Facsimile:
hereinafter referred to as “JAC”.
(NIO Tech, NIO Anhui and JAC is referred to hereinafter individually as a “Party”, and collectively the
“Parties”.)
Recitals
A.
NIO Tech is a company focused on technology research and development for new energy vehicles and
their parts and components, and NIO Anhui is a company focused on manufacturing the parts and
components, supply chain management, sales and after-sales services for new energy vehicles. JAC is an
integrated automobile manufacturer engaged in the research and development, manufacturing, sales and
services for commercial vehicles, passenger vehicles and powertrains.
2
B.
Considering that NIO Group (including NIO Tech, NIO Anhui and its affiliates) and JAC have established
good, trustworthy relationship since their strategic cooperation in the manufacturing sector since 2016,
NIO Tech, NIO Anhui and JAC have agreed to continue their cooperation on new manufacturing projects
in 2021 with support from the Anhui Provincial Government and Hefei Municipal Government. During
the term of this Agreement, NIO Tech shall license JAC to manufacture the Cooperative Model (as defined
below) with NIO trademark and related technology, and JAC shall be engaged by NIO Tech to
manufacture the Cooperative Model in compliance with NIO Tech's quality standards, and NIO Anhui
shall supply raw materials to JAC for its production of the Cooperative Model and act as the exclusive
worldwide master distributor of the Cooperative Vehicle (master distribution of which shall be separately
provided under the master distribution agreement between JAC and NIO Anhui).
NOW THEREFORE, on the basis of faithful cooperation and mutual confidence, the Parties have reached the
following agreement through friendly negotiation:
1.
Cooperation Project
1.1
1.2
1.3
In accordance with the Project Filed with Anhui Provincial Development and Reform Commission
(No. [***]), JAC intends to lease the existing land and plant in the Xinqiao Science and
Technology Innovation Demonstration Zone in Hefei (the “Xinqiao Plant”) and supporting
auxiliary facilities thereof, which shall be transformed into four processing workshops and related
production facilities with planned annual manufacturing capacity of 100,000 new energy passenger
vehicles for production of NIO ET5 and other models agreed in writing by the Parties (the
“Cooperative Model”).
The Parties agree to cooperate with each other to carry out manufacturing of Cooperative Model.
NIO Tech will license JAC to use its trademarks and related technologies for manufacturing the
Cooperative Model, which specific specifications, parameters and option requirements shall be
provided by NIO Tech; JAC shall be responsible to manufacture the Cooperative Model; NIO
Anhui shall be responsible to supply raw materials to JAC for its production of the Cooperative
Model and act as the exclusive worldwide master distributor of the Cooperative Vehicle (the
“Cooperation Project”).
NIO Tech and JAC hereby agree that in line with NIO Tech's product, processing and quality
requirements and the information of the Project Filed with Anhui Provincial Development and
Reform Commission (No. [***]), JAC will invest in high-quality, first-class four processing
manufacturing and producing facilities for new energy vehicles, which shall be suitable for the
positioning of the high-end new energy vehicle products of NIO Tech and NIO Anhui.
3
2.
Fees and Payments
The Parties hereby agree that NIO Anhui shall bear the following expense in connection with the
Cooperation Project: the amount of Vehicle Raw Materials, depreciation and amortization of the assets of
the Xinqiao Plant, processing costs and operating expenses of JAC, and taxes and levies arising from
production of the Cooperative Model, the details of which are specified below:
2.1
Amount of Vehicle Raw Materials
The main paint materials (top coat, clear coat, medium coat, primer, electrophoresis materials,
pretreatment materials, and curing agents), all parts and auxiliary materials (except auxiliary materials
involved in the production process), special body glues, rivets, and outsourced processed parts required for
the production of the Cooperative Vehicle (collectively the “Vehicle Raw Materials”) shall be purchased
by JAC from NIO Anhui (or any other vendor designated by NIO Anhui), subject to the agreement to be
entered into by the parties thereto. The amount of the Vehicle Raw Materials (excluding value-added and
consumption taxes) payable by JAC shall be settled and paid under Section 2.6 below.
2.2
Depreciation and Amortization of the assets of the Xinqiao Plant
2.2.1 NIO Anhui shall pay depreciation and amortization expenses to JAC for all assets invested
by JAC in connection with the Cooperative Model (including those invested, as well as
fixed and intangible assets to be invested in connection with the Cooperation Project).
2.2.2 NIO Anhui and JAC will estimate the amount of assets depreciation and amortization for
the current year based on the amount of the assets by the end of the preceding year (other
than the assets to be reaccounted as fixed assets during the applicable year). In the event of
any change in the timing and breakdown of the long-term assets to be reaccounted as fixed
assets, JAC and NIO Anhui agree to make quarterly adjustments in advance for settlement
of depreciation, amortization, property tax, land use tax, water conservancy fund, and stamp
duty. For clarity, the depreciation and amortization of fixed assets shall be in accordance
with the accounting policies announced by JAC at the date of this Agreement, and any
adjustment to such settlement principles shall be subject to the prior written approval of
NIO Anhui.
4
2.2.3
JAC shall engage an accounting firm to issue a separate annual audit report for the Xinqiao
Plant after the end of each fiscal year. The annual audit report shall, subject to confirmation
of NIO Anhui and JAC, confirm the annual settlement amount of depreciation,
amortization, property tax, land use tax, water conservancy fund and stamp duty for the
preceding year, and NIO Anhui and JAC shall settle the amount in accordance with Section
2.5 of this Agreement within 15 days from the date of issuance of the aforesaid annual audit
report.
2.3
JAC’s Processing Costs and Operating Expenses
2.3.1
JAC’s processing costs and operating costs are each of the expenses directly related to the
production and operation of the Xinqiao Plant which is included in the JAC’s processing
costs. Subject to compliance by the Xinqiao Plant and with the purpose to reduce
transaction cost of the Xinqiao Plant, the expenses incurred in the Xinqiao Plant shall be
charged as follows:
2.3.1.1 Costs of insurance incurred by JAC for invested assets shall be included in JAC's
processing costs. Repair and maintenance of all assets of the Xinqiao Plant (including
the assets invested by JAC) shall be borne by NIO Anhui at its own expenses.
2.3.1.2 The labor costs of personnel directly or indirectly employed by JAC, and travel and
team-building expenses incurred by such personnel shall be included in JAC's
processing costs subject to joint confirmation of JAC and NIO Anhui. Expenses such as
office administration expenses and printing costs arising from operation of the Xinqiao
Plant shall be borne by NIO Anhui.
2.3.1.3 Costs incurred in connection with vehicle certification and other quality-related
documentation shall be included in JAC's processing costs.
2.3.1.4 Taxes and levies (excluding value-added tax and corporate income tax) incurred by JAC
in connection with production of the Cooperative Model shall be included in JAC's
processing costs.
5
2.3.1.5 Other than the costs set forth above, any other expenses incurred by the Xinqiao Plant
shall be directly charged to NIO Anhui.
2.4
Taxes and Levies Arising from Production of Cooperative Model
NIO Anhui shall be responsible for the turnover tax and levies relating thereto (excluding corporate
income tax) incurred by JAC due to production of the Cooperative Model, which shall be settled at
the amount inclusive of applicable value-added tax.
2.5
Pricing and Settlement of Processing Fee
It is confirmed by JAC and NIO Anhui that the assets depreciation and amortization of the Xinqiao
Plant under Section 2.2, JAC’s processing costs and operating expenses under Section 2.3, and the
taxes and levies arising from production of the Cooperative Model under Section 2.4 shall be
payable by NIO Anhui to JAC as part of processing fee for vehicle production. At the end of each
year, NIO Anhui and JAC will jointly confirm the processing fee for single-unit vehicle production
to be charged by JAC for the following year, taking into account the processing fee for single-unit
vehicle production actually charged by JAC for the current year (subject to confirmation of NIO
Anhui and JAC), as well as planned production volume and factory efficiency improvement plan
for the following year. If there is any deviation between the year-end planned production volume of
the Cooperative Model and projected ongoing production volume for the following year, NIO
Anhui and JAC will make an interim adjustment of the processing fee payable by NIO Anhui to
JAC for settlement by the end of the year. The processing fee incurred in 2022 shall be settled
based on the amount actually incurred and confirmed by JAC and NIO Anhui.
2.6
Payment
The Parties agree that JAC shall sell the Cooperative Model manufactured by it to NIO Anhui
which will be then distributed by NIO Anhui to the market, and NIO Anhui will pay the expense
under this Article 2 hereof. Payment of such expenses shall be made by NIO Anhui on monthly
basis within the first five business days of the following month after amount of such expenses is
confirmed by JAC and NIO Anhui and duly invoiced. JAC shall pay NIO Anhui for the raw
materials of the corresponding vehicle units on the same day upon payment of the invoiced amount
for such vehicle units of the Cooperative Model by NIO Anhui to JAC.
6
3.
Investment in Cooperation Project
The parties agree to adopt the following fixed asset investment rules for successful production of the
Cooperative Model and ongoing demand for increased production capacity.
3.1
3.2
It is further confirmed by JAC and NIO Anhui that the equipment located at the Xinqiao Plant
which is covered under the Project Filed with Anhui Provincial Development and Reform
Commission (No. [***]) shall be provided and financed by JAC. The Xinqiao Electric Vehicle
Industrial Park (Phase I) (the “NV Park”), where the Cooperation Project is located, shall be
constructed at the request of NIO Anhui by Xinqiao Technology Investment Development Co., Ltd.
(“Xinqiao InvestCo”), a company controlled by the Administrative Commission of the Economic
Development Zone, and the ownership of the land use rights and buildings, infrastructure, ancillary
facilities and certain equipment thereof shall be held by Xinqiao InvestCo. Xinqiao InvestCo will
lease the NV Park in its entirety to JAC for manufacturing the Cooperative Model at the rent to be
separately agreed between JAC and the leasing party, which rent shall be included in JAC's
processing costs and operating expenses.
Except for the financing of the equipment covered under the Project Filed with Anhui Provincial
Development and Reform Commission (No. [***]) and the investment for fixed assets and
equipment required under the Ministry of Industry and Information Technology Order No. 50,
investment of any other equipment (including investment in testing, new products and product
iteration, proprietary equipment (such as molds and inspection tools), and technological
improvement out of operating needs and for improved safety, quality and efficiency) shall be the
responsibility of NIO Anhui, unless otherwise agreed by the Parties.
4.
Manufacturing Management of the Cooperation Project
It is agreed that the members of the management team of the Xinqiao Plant under the Cooperation Project
shall be jointly appointed by JAC and NIO Anhui, whose functions and responsibilities shall be mutually
agreed by the Parties. It is agreed that the Cooperation Project will meet the quality standards and
operational efficiency requirements set by NIO Anhui with the purpose to creating an efficient, consistent
and innovative production and operation system with optimized operational efficiency and high quality
products.
7
5.
Distribution and After-sale Maintenance of Cooperative Model
The Parties agree that, JAC shall authorize NIO Anhui to act as the exclusive master distributor for the
cooperation products under the Cooperation Project, and NIO Anhui shall have the right to select
distributors, carry out marketing and sales activities, provide after-sale services, conduct relevant training
sessions, provide relevant consulting services and engage in other activities relating to its role as master
distributor and the act of distribution, and JAC shall be obliged to enter into an exclusive master
distributor agreement with NIO Anhui. JAC shall not interfere with such rights of NIO Anhui, unless at
the request of NIO Anhui; provided, however, that NIO Anhui shall warrant that its exercise of such rights
will not harm the goodwill and other legitimate rights and interest of JAC. In the event of any breach on
the part of NIO Anhui, JAC shall have the right to take actions to protect its legitimate rights and interest,
and NIO Anhui shall indemnify JAC against the losses suffered by JAC due to its breach.
If any Party is subject to any litigation, arbitration, administrative punishment or judicial or administrative
investigation due to quality or any other issue of the Cooperative Model, the other Parties shall provide
assistance and cooperation for such Party. If JAC is subject to any litigation, arbitration, administrative
punishment or judicial or administrative investigation due to quality or any other issue of the Cooperative
Model, NIO Anhui and NIO Tech shall be obliged to provide cooperation and assistance to JAC along
with any relevant information possessed by NIO Anhui and NIO Tech without violation of applicable laws
and regulations and orders from competent authorities. If JAC is held liable by the judicial and
administrative authorities (other than those caused by JAC), NIO Anhui and NIO Tech shall indemnify
JAC for the liabilities held upon JAC, including damages, court costs, attorney's fees, appraisal fees, and
administrative fines, which indemnity shall be paid within 10 business days upon JAC’s submission of a
written request to NIO Anhui or NIO Tech along with any evidence thereof.
6.
Obligations of the Parties
6.1
NIO Tech shall perform the following obligations under the Cooperation Project:
6.1.1
it shall perform the obligations under this Agreement and the Cooperation Project in
compliance with applicable laws and regulations;
6.1.2
it shall provide relevant information on process planning and process improvement to
support JAC to complete production preparation in accordance with the project schedule
and manufacture the Cooperative Model in compliance with the quality and technique
requirements proposed by NIO Tech and jointly confirmed by the Parties;
8
6.1.3
it shall be responsible for product preparation, regulation test and preparation of specific
materials in the application for inclusion in the announced catalog as well as related
expenses, which materials, documents and reports shall be in Chinese or Chinese and
English, so as to meet the needs of JAC in its application for inclusion in the announced
catalog;
6.1.4
it shall be responsible for confirmation of quality system and processing quality to ensure
that the product quality of the Cooperative Model meet applicable national standards, legal
and regulatory requirements, and demands of NIO; and
6.1.5
any other obligations provided under this Agreement.
6.2
NIO Anhui shall perform the following obligations under the Cooperation Project:
6.2.1
it shall perform the obligations under this Agreement and the Cooperation Project in
compliance with applicable laws and regulations;
6.2.2
it shall complete investment in the Cooperative Model within its scope of investment based
on the allocation of investment responsibilities set forth in Section 3.2 hereof;
6.2.3
6.2.4
6.2.5
it shall be responsible for investments in additions and modifications involved in trial
manufacturing, while the costs of vehicle products or scrapped vehicles incurred in
production commissioning during the trial manufacturing and before the SOP shall be paid
by NIO Anhui, and NIO Anhui shall also be liable for any production stoppage,
inefficiency and additional cost incurred after the SOP;
it shall supply qualified raw materials to JAC that are necessary for manufacturing of the
Cooperative Model, in order to support JAC in its manufacturing of the Cooperative Model
in accordance with the business plan agreed by the Parties;
it shall be responsible for budgeting, cost control, and lean management of information
technology for the operation of the Xinqiao Plant as authorized by JAC, and ensure that the
information system of the Xinqiao Plant in compliance with applicable laws and regulations
and JAC's policies (regarding quality, finance, and assets).
9
6.2.6
it shall be responsible for production planning, warehouse control, operation management
and staffing of the transit warehouse and other logistics management;
6.2.7
if the cooperation is terminated due to any cause on the part of NIO Anhui, NIO Anhui
shall be liable for all costs of the assets invested by JAC for the Cooperative Model (except
for those depreciated and amortized) and the corresponding capital commitment costs. If
the cooperation is terminated for any cause on the part of JAC, the loss incurred by NIO
Anhui shall be negotiated between the Parties; and
6.2.8
any other obligations under this Agreement.
6.3
JAC shall perform the following obligations under the Cooperation Project:
6.3.1
it shall cooperate with the Xinqiao Plant in passing safe production, environmental
protection, fire safety, labor protection and other inspections by competent authorities, and
warrant that it will comply with laws and regulations of the PRC in the implementation of
cooperation;
6.3.2
it shall complete application for inclusion of the Cooperative Model in the announced
catalog;
6.3.3
it shall complete its responsible investment under Section 3.1 hereof before operation of the
Xinqiao Plant and be responsible for investment within the scope of JAC's investment;
6.3.4
6.3.5
it will assist NIO Anhui in the Cooperation Project with production line expansion, product
update and iteration, and new product investment to ensure successful completion of the
Cooperative Model SOP;
it shall be responsible for production of Cooperative Model in compliance with the quality
and technique requirements proposed by NIO Anhui and NIO Tech and confirmed by JAC
to the extent permitted by the laws and regulations of the PRC;
6.3.6
it shall assist the Xinqiao Plant in completion of safety, quality, environment, occupational
health, digital intelligent manufacturing and other external audits and certification; and
6.3.7
any other obligations under this Agreement.
10
7.
Other Matters
7.1
7.2
7.3
The Parties will further discuss any other matter relating to the Cooperation Project, including
without limitation announced catalog, qualifications and permits, product announcement,
trademark license, technology license, manufacturing quality and control, procurement and
logistics of parts and components, manufacturing costs, equipment dies, authorized distribution,
quality disputes, delivery and settlement, compliance (data/trade/anti-money laundering/anti-
commercial bribery), and allocation of functions and duties between the Parties, and make efforts
to enter into agreement on such matters within two months after the date of this Agreement, each of
which shall be ancillary to this Agreement, including without limitation the Trademark License
Agreement, the Technology License Agreement, the Master Distribution Agreement, the Product
Announcement Agreement, the Production and Operation Agreement, the Product After-Sales
Service and Warranty Agreement, and the Asset Entrustment Management Agreement.
In view of the use of JAC’s product announcement and certification for the Cooperative Model,
NIO Anhui shall be liable for any product recall that may occur after marketing of the Cooperative
Model and, if NIO Anhui is later determined not liable for such recall, it shall be entitled to claim
against the party held liable therefor.
JAC shall assign personnel to participate in trial production, mass production of new products,
quality and efficiency improvement, and capacity enhancement to meet technical standards for
production of the Cooperative Model at the expenses of NIO Anhui. JAC and NIO Anhui shall
agree in advance on the candidate of such personnel as well as their labor costs (with reference to
the average income standard for similar positions in the industry), and enter into a technical
consulting and management service agreement therefor. Upon completion of the work by the
personnel assigned by JAC, subject to confirmation of JAC and NIO Anhui, the above cost
settlement shall be completed before the SOP of each project (including new products, technical
reform and capacity expansion projects), and the taxes and levies relating thereto shall be borne by
NIO Anhui.
11
8.
Confidential and Proprietary Information
8.1
8.2
8.3
Each Party understands that the Cooperation Project contemplated by the Parties under this
Agreement involves access to and creation of confidential information, proprietary information,
trade secrets, and materials of the other Party and its affiliates and/or customers (collectively, the
“Confidential and Proprietary Information”). The Confidential and Proprietary Information
includes, without limitation, (1) information with respect to the other Party and its employees,
partners, members, agents, affiliates or customers (including their identity); (2) information with
respect to the contemplated or fulfilled business opportunities of the other Party and its affiliates or
customers, including, in each case, identity of the parties, terms involved and other relevant
information; (3) information, idea or material of a technical or creative nature, such as R&D
achievements, design and technical parameters, computer data and object code, patent applications,
and other materials or ideas with respect to the products, services, processes, technologies or other
intellectual property of the other Party or any of its affiliates or customers; (4) information, idea or
material of a commercial nature of the other Party; and (5) the existence of this Agreement and its
terms and conditions.
Each Party understands that the Confidential and Proprietary Information is of great value to the
other Party and its affiliates, licensors, suppliers, investors, partners, members, agents, vendors or
customers. Therefore, each Party agrees: (1) to keep all Confidential and Proprietary Information
in confidence for the benefit of the other Party; (2) not to reproduce or use (or allow its members,
subcontractors or agents to reproduce or use) any Confidential and Proprietary Information unless
required for the purpose of performing this Agreement; and (3) not to disclose or otherwise make
available to any third party any Confidential and Proprietary Information without the prior written
authorization of the other Party, except for disclosure of the existence of this Agreement and its
terms and conditions required by applicable laws.
Neither Party may disclose to any third party or announce or release in any way the content or
existence of this Agreement or the transactions contemplated hereby without the prior written
consent of the other Party, except for disclosure or announcement required by the laws and
regulations of the PRC or competent authorities in charge of the industry, provided that the
disclosing Party shall inform the other Parties in advance of such disclosure and take due
consideration of reasonable concerns of the other Parties.
12
9.
9.1
9.2
9.3
9.4
Intellectual Property
JAC shall not, and shall not authorize any third party to: (i) create derivative works of, copy, alter
or in any way modify the know-hows or patents (collectively, the “Intellectual Property”) of NIO
Tech and/or any of its affiliates without the prior written consent of NIO Tech and NIO Anhui; (ii)
translate, decompile, disassemble, reverse compile, reverse engineer, interrogate or decode the
Intellectual Property of NIO Tech and/or any of its affiliates; (iii) bypass or delete any copy
protection methods implemented for the prevention of unauthorized copying or use of the
Intellectual Property of NIO Tech and/or any of its affiliates; or (iv) electronically distribute,
timeshare or market the Intellectual Property of NIO Tech and/or any of its affiliates by interactive
cable or by remote processing services.
Neither NIO Tech or NIO Anhui may, or may authorize any third party to: (i) copy, alter or in any
way modify the Intellectual Property of JAC without the prior written consent of JAC; (ii)
translate, decompile, disassemble, reverse compile, reverse engineer, interrogate or decode the
Intellectual Property of JAC; (iii) bypass or delete any copy protection methods implemented for
the prevention of unauthorized copying or use of the Intellectual Property of JAC; or (iv)
electronically distribute, timeshare or market the Intellectual Property of JAC by interactive cable
or by remote processing services.
The Parties agree that NIO Tech will license JAC to use its technologies and trademarks relating to
the Cooperative Model on a royalty-free basis solely for the purpose of the Cooperation Project,
and the Parties will separately enter into the license agreements. Further, all rights to the
Intellectual Property shall be retained by the Party owning the Intellectual Property and/or its
license, unless a license is expressly granted under this Agreement.
NIO Tech warrants that the technologies licensed to JAC are either owned by it or duly authorized
and licensed to it, and will not infringe upon the legitimate rights and interest of any third party. If
a third party claims that the use by JAC of the technologies licensed by NIO Tech to it has
infringed upon its rights, NIO Tech shall be solely liable for dealing with such claim and bear all
consequences arising therefrom. If JAC suffers any losses due to such claim, NIO Tech shall
indemnify JAC against such losses.
10.
Liability for Breach
The Parties agree that the liability for breach under the Cooperation Project will be separately agreed upon
by the Parties in the applicable agreement ancillary hereto.
13
11.
Term and Termination
11.1
This Agreement shall take effect as of the date when it is duly executed and sealed by the Parties,
and shall remain valid for three years after the effective date unless earlier terminated by the Parties
pursuant to the terms hereof. If neither Party notifies the other Party in writing of its decision not to
renew this Agreement within three months before the expiration of the term of this Agreement, this
Agreement shall be automatically renewed upon the expiration of its term (or renewed term)
without any further action on the part of the Parties.
11.2
It is agreed that the term of the Cooperation Project shall be ten years (from September 2022 until
September 2032, any extension thereof subject to negotiation of the Parties), provided that this
Agreement may be subject to re-execution with changes of the terms hereof, if necessary, every
three years based on circumstances of the market and the Parties.
11.3 During the term of the Cooperation Project set forth in Section 11.2 above, if either Party intends to
terminate the Cooperation Project, it shall obtain written consent of the other Parties and such
termination shall not be prejudicial to the reasonable business interests of the other Parties. Under
such circumstance, the Parties shall negotiate separately regarding matters on indemnity and
subsequent arrangements arising from such termination.
11.4 Upon the occurrence of any of the following events to a Party, any of the other Parties may
terminate this Agreement by a written notice to such Party with immediate effect:
11.4.1
11.4.2
11.4.3
such Party fails to substantially or materially perform or comply with any of the
obligations, terms and conditions hereunder, and such breach is not cured within 30 days
after it has received a written cure notice from the other Party;
such Party becomes bankrupt or insolvent, or is the subject of proceedings for liquidation
or dissolution, or becomes unable to pay its debts as they become due or is dissolved in
accordance with applicable laws; or
any change in shareholding structure of such Party has materially affected its performance
of this Agreement, in which case, any of the other Parties may unilaterally terminate this
Agreement.
11.5
The expiration or termination of this Agreement for whatever reason shall not release either Party
hereto from the rights and obligations that have accrued prior to the date of such expiration or
termination.
11.6 Upon the expiration or early termination of this Agreement, each Party shall return the property of
the other Party to it upon the receipt of its instructions.
14
12.
Force Majeure
12.1
If the performance of this Agreement by either Party hereto is delayed or prevented by an Event of
Force Majeure (as defined below), the Party affected by such Event of Force Majeure shall be
excused from any liability hereunder. For the purposes of this Agreement, an “Event of Force
Majeure” shall mean any event that is unforeseeable, beyond the affected Party's control, and
cannot be prevented with reasonable care, which includes but is not limited to the acts of
governments, fire, explosion, geographic change, flood, earthquake, tide, lightning, war, epidemic
or any other unforeseeable, unavoidable and insurmountable events. However, any shortage of
credit, capital or finance shall not be regarded as an event beyond a Party's reasonable control.
12.2
The Party affected by an Event of Force Majeure who claims to be excused from its obligation
under this Agreement or any provision hereof shall notify the other Party of the occurrence of such
Event of Force Majeure within five (5) days from the date of occurrence, and shall take all
necessary actions and measures to minimize and mitigate the losses and damages and resume its
performance of this Agreement as soon as practicable.
13.
General Provisions
13.1 Governing Law and Arbitration. This Agreement shall be governed by the PRC laws in all
respects. Any dispute arising out of the interpretation or performance of this Agreement shall be
resolved by the Parties first through friendly negotiation. If such dispute cannot be resolved within
thirty (30) days from the date of commencement of negotiation, either Party may submit such
dispute to China International Economic and Trade Arbitration Commission (“CIETAC”) for
arbitration in Beijing in accordance with the arbitration rules of CIETAC then in effect. The
arbitration proceedings shall be conducted in the Chinese language. The arbitration award shall be
final and binding upon both Parties. The losing Party shall bear and pay all arbitration costs.
During the period when a dispute is being resolved, the Parties shall continue to perform their
respective obligations under this Agreement except for the matters in dispute.
13.2
Severability. If any term or provision of this Agreement is determined or held to be invalid, illegal
or unenforceable by any law or public policy, the enforceability and validity of other terms of this
Agreement shall not be affected. Upon such determination that any term or provision of this
Agreement is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the Parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
15
13.3 Assignment. Without the prior written consent of the other Party, neither Party may assign any of
its rights or obligations hereunder to any entity.
13.4 Amendment. This Agreement may not be amended, modified or supplemented orally, and may be
amended, modified or supplemented only by a written instrument executed by the Parties.
13.5
Languages and Counterparts. This Agreement shall be written in the Chinese language in six
identical counterparts. Each Party shall hold two counterpart, and each counterpart shall be deemed
an original, which taken together shall constitute one and the same fully signed agreement. In the
event of any conflict between any appendix hereto and the main body of this Agreement, such
appendix shall prevail.
(Remainder intentionally left blank)
16
(Signature page of Manufacturing Cooperation Agreement)
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized
representatives as of the date first above written.
NIO Automobile Technology (Anhui) Co., Ltd. (蔚来
汽车科技（安徽）有限公司) (seal)
/s/ Lihong Qin
Title: Legal Representative / Authorized
Representative:
NIO Automobile (Anhui) Co., Ltd. ( 蔚 来 汽 车 （ 安
徽）有限公司) (seal)
/s/ Lihong Qin
Title: Legal Representative / Authorized
Representative:
Anhui Jianghuai Automobile Group Co., Ltd. ( 安 徽
江淮汽车集团股份有限公司) (seal)
/s/ authorized signatory
Title: Legal Representative / Authorized
Representative:
17
THE SYMBOL “[***]”DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED
FROM THE EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL, AND (ii) IS THE TYPE THAT
THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL
Xinqiao Electric Vehicle Industrial Park (Phase I) Assets Transfer Agreement
Party A (Transferor): NIO (Anhui) Co., Ltd. (蔚来汽车（安徽）有限公司)
Address: Building F, Hengchuang Intelligent Technology Park, 3963 Susong Road, Hefei Economic and Technological Development
Zone, Anhui Province
Telephone:
Exhibit 4.47
Hereinafter referred to as “NIO Anhui”;
And
Party B (Transferee): Anhui Jianghuai Automobile Group Co., Ltd. (安徽江淮汽车集团股份有限公司)
Address: 176 Dongliu Road, Hefei City, Anhui Province
Telephone:
Hereinafter referred to as “JAC”.
WHEREAS:
The Anhui Provincial Government and the Hefei Municipal Government attach great importance to and proactively promote the
development of NIO (including NIO Anhui) in Hefei, and the Parties agree to jointly promote their cooperation of manufacturing new
energy vehicle in Xinqiao Electric Vehicle Industrial Park (Phase I) (the “NV Park”) based on their long-term strategic partnership.
NIO Anhui and JAC, based on the principle of equality, voluntariness, honesty and credit, agree to enter into this Xinqiao Electric
Vehicle Industrial Park (Phase I) Assets Transfer Agreement (this “Agreement”) in respect of transfer of the assets (including equipment
and tooling assets) related to the equipment installation project in progress of the NV Park from NIO Anhui to JAC in accordance with
the Civil Code of the People's Republic of China and the laws, regulations and policies relating to transfer of state-owned assets.
1. Subject of Transfer
1.1
The subject of the transfer shall be equipment and tooling related assets of NV Park (the “Project Assets”), the details
of which are set forth in the appraisal report of Wanzhonglian Guoxin Appraisal Report No. [***] attached hereto as
Schedule I.
1.2
The particulars and value of the Project Assets have been appraised by Anhui Zhonglian Guoxin Asset Appraisal Co.,
Ltd. under engagement by Party B, which appraisal is acknowledged by Party A. The appraiser has issued the appraisal
report of Wanzhonglian Guoxin Appraisal Report No. [***] attached hereto as Schedule I.
2. Price of Transfer
Party A and Party B agree to set the transfer price under this Agreement as the value arrived at in the above appraisal report. Party A
agrees to transfer the Project Assets to Party B at the price of RMB[***] (including the tax-exclusive amount of RMB[***] and taxes in
amount of RMB[***], the “Transfer Price”).
3. Payment of Transfer Price
Party A shall issue relevant invoice to Party B before Party B makes the payment of the Transfer Price, and Party B shall make payment
upon its receipt of the invoice but no later than 90 days after the date of this Agreement.
The Transfer Price shall be paid to the following account of Party A:
Account name: NIO (Anhui) Co., Ltd. (蔚来汽车（安徽）有限公司)
Bank name:
Bank account number:
Pursuant to Section 11 Clause 2 of the Business Enterprise Accounting System, a business enterprise shall account for any transaction or
matter based on its economic substance, rather than on its legal form. Considering that the Project Assets will be included in the accounts
of and managed by a branch of Party B after the transfer, Party A shall issue a special VAT invoice (at tax rate of 13%) for the Transfer
Price to such branch of Party B, the details of which are as follows:
Name: Anhui Jianghuai Automobile Group Co., Ltd. New Energy Passenger Vehicle Branch
Bank of Account:
Bank account number:
4. Closing of Transfer
(1)
(2)
(3)
(4)
(5)
As of the above appraisal base date, Party A shall not take any action that will be harmful to the Project Assets or
otherwise affect any of Party B's rights in and of the Project Assets (including without limitation transfer, mortgage,
pledge, lease and other disposal), otherwise Party A shall be liable for any damage incurred by Party B.
Party A shall transfer the Project Assets to Party B within 10 business days after the date of this Agreement, which
transfer shall be subject to the List of Transfer Assets (attached hereto as Schedule II) executed by the Parties.
Ownership of the Project Assets shall be transferred from Party A to Party B upon execution of the List of Transfer
Assets by the Parties.
The functions, status and conditions of the Project Assets shall be subject to the terms of the technical agreement (the
“Technical Agreement”) mutually confirmed in writing by the Parties. The Technical Agreement shall be attached
hereto as a schedule of this Agreement.
Upon Party A’s transfer of the Project Assets to Party B, Party A undertakes to provide Party B with the support
necessary to obtain any approval and re-registration with competent governmental authorities (including without
limitation re-registration of special equipment inspection certificate and imported (duty-free) equipment certificate).
Party A shall, within four months from the date of this Agreement, transfer copies (affixed with Party A's seal) or
electronic files of all records of the Project Assets (including without limitation original procurement agreement,
original technical agreement and acceptance form, collectively the “Asset File”) to Party B, and Party B shall exercise
due maintenance of the Asset File.
5. Warranty and Related Services
(1)
(2)
Party A shall provide Party B with warranty services for the Project Assets for a period no less than one year, but no
longer than the warranty period provided by the original supplier of the Project Assets. If the warranty services of the
Projects Assets are otherwise provided in the Technical Agreement, including duration, starting time and descriptions
of the warranty services, the terms under the Technical Agreement shall prevail.
After the end of the warranty period, Party A shall provide maintenance services for the Project Assets to Party B in
accordance with the terms under the Technical Agreement and, upon absence of such terms under the Technical
Agreement, Party A shall undertake to provide maintenance services according to the operational needs of the Project
Assets to Party B.
6. Obligations of the Parties
All taxes, fees, debts and liabilities incurred by Party A from its investment until completion of the Project Assets (i.e., the Project Assets
are fully operational and the warranty relating thereto agreed by Party A and the third party constructor/supplier are completed) shall be
payable by Party A without any liability upon Party B.
The above debts and liabilities shall include without limitation those arising from signing, performing, amending, releasing and
terminating agreement on survey, design, construction, procurement, supervision, audit, service, engineering, visa and other matters with
the applicable third party for the Project Assets, and other debts and liabilities relating to the Project Assets. All of such debts and
liabilities, including without limitation all payments and liabilities thereof, shall be borne by Party A.
7. Taxes of Transfer
Value-added tax and surcharge, stamp duty and other taxes and levies arising from the Project Assets shall be paid by each of the Parties
in accordance with applicable laws and regulations, or jointly by the Parties if there is no provision under applicable laws and
regulations.
8. Representations, Warranties and Covenants of Party A
(1)
(2)
(3)
Party A warrants that it has full right to dispose the Project Assets under this Agreement, that the ownership of the Project
Assets is clear without any compulsory action such as seizure by any judicial authority, and that there is no circumstance
prohibiting or restricting the transfer contemplated hereunder. If there is any significant defect in Party A's rights on the
Project Assets or in the Project Assets or any other material event that may affect evaluation of the Project Assets, Party A has
disclosed such defects or events to Party B and undertake that the risks and liabilities arising from such defects shall be solely
borne by Party A.
Party A warrants that all information (including its originals and copies) provided and statements made by it to Party B for
purpose of this Agreement are true, accurate, complete, valid, without any inaccuracy or material omission. Party A is
responsible for the consistency between the information provided by it and the actual conditions of the Project Assets and shall
be held liable for any concealment or misrepresentation arising therefrom.
Party A warrants that all procedures including without limitation internal decision-making, authorization and approval
required for execution and performance of this Agreement have been duly received by it and that the conditions precedent for
this Agreement and the transfer of the Project Assets to come into effect have been satisfied.
9. Representations, Warranties and Covenants of Party B
(1)
(2)
Party B warrants that it has the capacity to enter into and perform this Agreement.
Party B warrants that all procedures including without limitation internal decision-making, authorization and approval
required for execution and performance of this Agreement have been duly received by it and that the conditions precedent for
this Agreement and the transfer of the Project Assets to come into effect have been satisfied.
10. Liability for Breach
Any Party in breach of this Agreement shall be held liable for any loss incurred by the non-breaching Party.
11. Dispute Resolution
Any dispute arising out of performance of this Agreement shall be resolved by the Parties through friendly negotiation. If such dispute
cannot be resolved by negotiation, the Parties agree to submit such dispute to the people’s court with jurisdiction over the place where
Party A is incorporated for litigation.
12. Effectiveness
This agreement shall come into effect upon the signature by the legal representative or authorized representative of each of Party A and
Party B and affixture of seal of both Parties.
13. Miscellaneous
(1)
(2)
Any matter not provided under this Agreement may be agreed upon by the Parties in writing with a supplement hereto, and
such supplement shall have the same legal effect with this Agreement.
This Agreement shall be made in six identical counterparts, and each of Party A and Party B holds three copies with the same
legal effect.
Party A:
Party B:
NIO (Anhui) Co., Ltd. (蔚来汽车（安徽）有限公司) (seal)
Anhui Jianghuai Automobile Group Co., Ltd. (安徽江淮
汽车集团股份有限公司) (seal)
/s/ Lihong Qin
/s/ Xingchu Xiang
Title: Legal Representative / Authorized
Representative
Title: Legal Representative / Authorized
Representative
Date:
Date: December 23, 2022
Schedule 1. Wanzhonglian Guoxin Appraisal Report No. [***]
Schedule 2. List of Transferred Assets
THE SYMBOL “[***]”DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED
FROM THE EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL, AND (ii) IS THE TYPE THAT THE REGISTRANT
TREATS AS PRIVATE OR CONFIDENTIAL
Supplemental Agreement to the Xinqiao Electric Vehicle Industrial Park (Phase I) Assets Transfer Agreement
Party A (Transferor): NIO (Anhui) Co., Ltd. (蔚来汽车（安徽）有限公司)
Address: Building F, Hengchuang Intelligent Technology Park, 3963 Susong Road, Hefei Economic and Technological Development
Zone, Anhui Province
Telephone:
Hereinafter referred to as “NIO Anhui”;
And
Party B (Transferee): Anhui Jianghuai Automobile Group Co., Ltd. (安徽江淮汽车集团股份有限公司)
Address: 176 Dongliu Road, Hefei City, Anhui Province
Telephone:
Hereinafter referred to as “JAC”.
WHEREAS:
Party A and Party B have entered into the Xinqiao Electric Vehicle Industrial Park (Phase I) Assets Transfer Agreement (the “Assets
Transfer Agreement”) dated a certain date of 2022. With the intention to promote efficient performance of the Assets Transfer
Agreement and on the principle of equality and mutual benefit, the Parties enter into this supplemental agreement (this “Agreement”) as
follows upon friendly negotiation and in accordance with the Civil Code of the People's Republic of China and applicable laws and
regulations.
1. Payment of Transfer Price
1.1
Party A shall, within 10 business days after the date of this Agreement, issue the VAT invoice (at tax rate of 13%) for
the transfer price under the Assets Transfer Agreement to the applicable branch of Party B. Party B shall pay the the
Transfer Price upon receipt of the invoice issued by Party A for the entire Transfer Price, which is RMB[***] (tax
inclusive) (including the tax exclusive amount of RMB[***] and the taxes in amount of RMB[***]). The payment may
be made in installments, provided that the entire Transfer Price shall be made no later than the date of signature of the
final acceptance report.
1.2
Considering that Party A is responsible to provide warranty for the Project Assets, it shall provide to Party B on the
date of the final acceptance report a letter of guarantee issued by a reputable bank in the amount of RMB[***], which
is payable upon request and valid for one year from the date of the final acceptance report (the “Letter of
Guarantee”).
2. Acceptance of Project Assets
2.1
2.2
2.3
2.4
2.5
The Project Assets shall be transferred from Party A to Party B upon the initial acceptance, and the Parties shall
confirm it by signing the List of the Transfer Assets.
Final acceptance of the Project Assets shall be after the initial acceptance of the Project Assets and made upon notice
from Party B to Party A. The final acceptance shall be no later than 90 days after the date of the Assets Transfer
Agreement.
Final acceptance of the Project Assets shall be in accordance with the Technical Agreement attached to the Assets
Transfer Agreement, and completed upon signature of the Parties on the final acceptance report in writing. The Parties
agree that for the purpose of payment of the Transfer Price and issuance of the Letter of Guarantee contemplated in
Section 1 of this Agreement, the Parties shall jointly confirm in writing the date to sign the final acceptance report no
less than five business days prior to such signing date (the “Final Acceptance Signing Notice Period”), and prepare
for payment of the Transfer Price and issuance of the Letter of Guarantee during the Final Acceptance Signing Notice
Period. The signing date of the final acceptance report shall not be changed without cause once the Parties confirmed
in writing.
The information provided by Party A for the final acceptance shall be accurate, standardized and complete, and shall be
corrected by Party A at the request of Party B if it fails to meet the requirements.
If the Project Assets fail to be finally accepted within the specified time or their conditions upon acceptance are not in
accordance with the Technical Agreement, in each case due to any reason of Party A, Party A shall be held liable for all
losses incurred Party B. Party B shall not cause unreasonable delay to the final acceptance.
The records of the Project Assets provided under Section 4 Clause 5 of the Assets Transfer Agreement and its transfer
are set forth in Schedule I of this Agreement, subject to the List of Transfer Assets confirmed in writing by both
Parties.
3.
Supplemental Agreements on Warranty and Related Services
3.1
3.2
During the warranty period, repairs and parts replacement not caused by Party B shall be provided by Party A or any
third party designated by Party A without charge.
During the warranty period of the Project Assets, if any equipment fails to operate due to any reason not on the part of
Party B, Party B shall negotiate with Party A to resolve the issue. If the negotiation fails and (i) Party A is negligent to
repair or address the issue; (ii) Party A tries to repair or take other actions by itself or a third party designated by it but
fails to resolve the issue; and/or (iii) Party A tries to repair or take other actions by itself or a third party designated by
it but further damage is caused due to such repair or other actions, Party B shall have the right to take reasonable
measures by itself or any third party on its behalf in compliance with laws, regulations and industry practices, and to be
paid from the amount under the Letter of Guarantee for an amount equal to the expenses or losses incurred by it
resulting therefrom, provided that:
a. Party B shall issue a written notice of claims setting forth the underlying facts and the amount of the claimed
payment;
b. Party B shall provide supporting documents for the amount of the claimed payment, including without
limitation the equipment to be repaired/replaced, its failure or defects, and the measures taken by Party B to
resolve such failure and the relevant proof of payment (such as vouchers and invoices); and
c. Party B's additional expenses or losses are confirmed as reasonable by Party A with its signature upon the notice
of claims issued by Party B.
The above-mentioned conditions for payment from the amount under the Letter of Guarantee to Party B shall be
included in the Letter of Guarantee provided by Party A.
3.3
If the warranty period of the Project Assets is otherwise provided under the Technical Agreement and exceeds the
period covered by the Letter of Guarantee, Party A shall be responsible to provide warranty in accordance with the
Technical Agreement for any excessive period.
4.
Miscellaneous
4.1
After transfer of the Project Assets to Party B, considering that the Project Assets are installed in a location that may
inter-connect with the facilities and equipment of Party A, Party A and Party B shall jointly act in good faith in
connection with the Project Assets, and no action of Party A shall be harmful to the Project Assets or affect the
exercise of Party B's rights in or of the Project Assets, otherwise Party A shall be held liable for any damage incurred
by Party B. Party B undertakes that the Project Assets shall serve the cooperation project between Party A and Party B
(the cooperation project is defined in the Manufacturing Cooperation Agreement made among Party A, Party B and
other party thereto in September 2022).
4.2
Neither Party may transfer any of its rights and obligations under the Assets Transfer Agreement and this Agreement to
any third party without the prior written consent of the other Party.
5.
Dispute Resolution
Any dispute arising out of performance of this Agreement shall be resolved by the Parties through friendly negotiation. If such dispute
cannot be resolved by negotiation, the Parties agree to submit such dispute to the people’s court with jurisdiction over the place where
Party A is incorporated for litigation.
6.
Effectiveness
6.1 This Agreement shall have the same legal effect as the Assets Transfer Agreement. If there is any inconsistency between the
Assets Transfer Agreement and this Agreement, this Agreement shall prevail.
6.2 This agreement shall come into effect upon the signature and affixture of seal by each of Party A and Party B. This
Agreement shall be made in six counterparts, and each of Party A and Party B holds three copies with the same legal effect.
(no text below)
(signature page of the Supplemental Agreement to the Xinqiao Electric Vehicle Industrial Park (Phase I) Assets Transfer Agreement)
Party A:
Party B:
NIO (Anhui) Co., Ltd. (蔚来汽车（安徽）有限公司) (seal)
Anhui Jianghuai Automobile Group Co., Ltd. (安徽江淮汽车集
团股份有限公司) (seal)
/s/ Lihong Qin
/s/ Xingchu Xiang
Title: Legal Representative / Authorized
Representative
Title: Legal Representative / Authorized
Representative
Date: December 23, 2022
Date: December 23, 2022
Schedule I. Catelogue of material documents
Power of Attorney
Exhibit 4.48
The undersigned, Bin Li, a citizen of the People’s Republic of China (“China” or the “PRC”) whose Identification Card No. is
********, and a holder of 80% of the equity interests in Anhui NIO AI Technology Co., Ltd. (“NIO AI”) as of the date of this Power of
Attorney, hereby irrevocably authorize Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”) to
exercise the following rights with respect to all equity interests held by me now and in the future in NIO AI (“My Equity Interests”)
during the term of this Power of Attorney:
NIO Autonomous Driving or the persons(s) designated by NIO Autonomous Driving (including without limitation to the directors of
NIO Autonomous Driving, their successors and any liquidator in replacement of such directors, but excluding any non-independent
person or person that may cause conflicts of interest) (the “Attorney-In-Fact”) is hereby authorized, as my sole and exclusive agent with
full authority, to act on behalf of myself with respect to all matters concerning My Equity Interests, including without limitation to: 1)
convening and attending shareholders’ meetings of NIO AI; 2) filing all necessary documents with relevant company registry; 3)
exercising all of the shareholder’s rights and shareholder’s voting rights that I am entitled to under the law of the PRC and the articles of
association of NIO AI, including without limitation to the right to receive dividends, sell or transfer or pledge or dispose of My Equity
Interests (in part or in whole); 4) representing myself in executing any resolutions and minutes and approving the amendments to the
articles of association as a shareholder of NIO AI on my behalf; and 5) nominating, appointing or removing on behalf of myself the legal
representative, directors, supervisors, general managers and other senior management members of NIO AI and filing a lawsuit or taking
other legal actions against such legal representative, directors, supervisors, general managers and other senior management members of
NIO AI when their actions harm the interests of NIO AI or its shareholders. Without written consent by NIO Autonomous Driving, I
have no right to increase, decrease, transfer, re-pledge, or by any other manner to dispose of or change My Equity Interests.
For the purpose of entrusting the rights under this Power of Attorney, NIO Autonomous Driving or the person(s) designated by NIO
Autonomous Driving have the right to know all kinds of relevant information including but not limited to the information about the
corporate operation, business, customers, finance, and employees of NIO AI and have access to relevant information, for which I shall
provide appropriate assistance at request.
I, without the prior written consent of NIO Autonomous Driving, will not directly or indirectly participate in, engage in, involve or own,
or use any information obtained from NIO Autonomous Driving and NIO AI to participate in, engage in, involve or own any business
that may compete with NIO Autonomous Driving, NIO AI or its affiliated companies or main businesses, nor will I hold any interests or
gain benefits from any business that may compete with NIO Autonomous Driving, NIO AI or its affiliated companies or main
businesses. For the avoidance of doubt, this Power of Attorney shall not be considered an authorization for me or other non-independent
persons or persons that may cause conflicts of interest to exercise the rights conferred by this Power of Attorney.
If I become a person with no capacity for civil conduct or a person with limited capacity for civil conduct for any reason, all my
guardians shall continue to perform their duties and have their rights, provided that they shall covenant to continue to comply with the
terms of this Power of Attorney.
The Attorney-In-Fact shall have the right to, on behalf of myself, execute the Exclusive Option Agreement entered into by and among
NIO Autonomous Driving, NIO AI and myself on November 30, 2022 and the Equity Pledge Agreement entered into by and among NIO
Autonomous Driving, NIO AI and myself on November 30, 2022 (including any modification, amendment and restatement thereto,
collectively the “Transaction Documents”) and all the documents I shall sign as stipulated in the Transaction Documents, and to
perform the terms of the Transaction Documents as scheduled. The exercise of such right shall not constitute any restriction or limit on
the authority granted hereunder.
All the actions in terms of My Equity Interests conducted by the Attorney-In-Fact shall be deemed as my own actions, and all the
documents in terms of My Equity Interests executed by the Attorney-In-Fact shall be deemed to be executed by me, which I shall
acknowledge and ratify accordingly.
The Attorney-In-Fact have the right to re-authorize and may, at its own discretion, delegate its rights hereunder to other person or entity
in respect of the aforesaid matters without giving prior notice to me or obtaining my consent. The Attorney-In-Fact shall designate a PRC
citizen to exercise the aforementioned rights if so required by PRC laws.
Unless otherwise specified in this Power of Attorney, the Attorney-In-Fact has the right to allocate, use or otherwise dispose of cash
dividends and other non-cash proceeds generated from My Equity Interests in accordance with my oral or written instructions.
During the entire period when I am a shareholder of NIO AI, this Power of Attorney shall be irrevocable and continuously effective and
valid from the date of execution of this Power of Attorney.
In the event of any dispute arising from the performance of this Power of Attorney or in connection with this Power of Attorney, either
myself or the Attorney-In-Fact may submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of either my or the Attorney-In-Fact’s equities, assets,
property interest or land assets (including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or
assets), or propose the winding-up of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws.
In addition, in the course of forming the tribunal, either I or the Attorney-In-Fact shall have the right to file an application to any court
with competent jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of any party of the Attorney-In-
Fact (namely Hefei, China) and places where either my or the Attorney-In-Fact’s main assets are located) for the grant of temporary
reliefs. During the arbitration proceeding, this Power of Attorney shall continue to be valid except for the part which is disputed by either
the Attorney-In-Fact or me and pending for arbitration.
During the term of this Power of Attorney, I hereby waive all the rights associated with My Equity Interests, which have been authorized
to the Attorney-In-Fact through this Power of Attorney, and shall not exercise such rights by myself.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the Parties have caused their respective authorized representatives to execute this Power of Attorney on
November 30, 2022 with immediate effect.
Principal:
Bin LI
By:
/s/ Bin LI
Accepted by:
Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title: Legal Representative
Acknowledged by:
Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title: Legal Representative
Power of Attorney
The undersigned, Lihong Qin, a citizen of the People’s Republic of China (“China” or the “PRC”) whose Identification Card No. is
********, and a holder of 2.24% of the equity interests in Anhui NIO AI Technology Co., Ltd. (“NIO AI”) as of the date of this Power
of Attorney, hereby irrevocably authorize Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”) to
exercise the following rights on my behalf relating to all equity interests held by me now and in the future in NIO AI (“My Equity
Interests”), during the term of this Power of Attorney:
NIO Autonomous Driving or the persons(s) designated by NIO Autonomous Driving (including without limitation to the directors of
NIO Autonomous Driving, their successors and any liquidator in replacement of such directors, but excluding any non-independent
person or person that may cause conflicts of interest) (the “Attorney-In-Fact”) is hereby authorized, as my sole and exclusive agent with
full authority, to act on behalf of myself with respect to all matters concerning My Equity Interests, including without limitation to: 1)
convening and attending shareholders’ meetings of NIO AI; 2) filing all necessary documents with relevant company registry; 3)
exercising all of the shareholder’s rights and shareholder’s voting rights that I am entitled to under the law of the PRC and the articles of
association of NIO AI, including without limitation to the right to receive dividends, sell or transfer or pledge or dispose of My Equity
Interests (in part or in whole); 4) representing myself in executing any resolutions and minutes and approving the amendments to the
articles of association as a shareholder of NIO AI on my behalf; and 5) nominating, appointing or removing on behalf of myself the legal
representative, directors, supervisors, general managers and other senior management members of NIO AI and filing a lawsuit or taking
other legal actions against such legal representative, directors, supervisors, general managers and other senior management members of
NIO AI when their actions harm the interests of NIO AI or its shareholders. Without written consent by NIO Autonomous Driving, I
have no right to increase, decrease, transfer, re-pledge, or by any other manner to dispose of or change My Equity Interests.
For the purpose of entrusting the rights under this Power of Attorney, NIO Autonomous Driving or the person(s) designated by NIO
Autonomous Driving have the right to know all kinds of relevant information about the corporate operation, business, customers,
finance, employees, etc. of NIO AI, for which I shall provide appropriate assistance at request.
I, without the prior written consent of NIO Autonomous Driving, will not directly or indirectly participate in, engage in, involve or own,
or use any information obtained from NIO Autonomous Driving and NIO AI to participate in, engage in, involve or own any business
that may compete with NIO Autonomous Driving, NIO AI or its affiliated companies or main businesses, nor will I hold any interests or
gain benefits from any business that may compete with NIO Autonomous Driving, NIO AI or its affiliated companies or main
businesses. For the avoidance of doubt, this Power of Attorney shall not be considered an authorization for me or other non-independent
persons or persons that may cause conflicts of interest to exercise the rights conferred by this Power of Attorney.
If I become a person with no capacity for civil conduct or a person with limited capacity for civil conduct for any reason, all my
guardians shall continue to perform their duties and have their rights, provided that they shall covenant to continue to comply with the
terms of this Power of Attorney.
The Attorney-In-Fact shall have the right to, on behalf of myself, execute the Exclusive Option Agreement entered into by and among
NIO Autonomous Driving, NIO AI and myself on November 30, 2022 and the Equity Pledge Agreement entered into by and among NIO
Autonomous Driving, NIO AI and myself on November 30, 2022 (including any modification, amendment and restatement thereto,
collectively the “Transaction Documents”) and all the documents I shall sign as stipulated in the Transaction Documents, and to
perform the terms of the Transaction Documents as scheduled. The exercise of such right shall not constitute any restriction or limit on
the authority granted hereunder.
All the actions in terms of My Equity Interests conducted by the Attorney-In-Fact shall be deemed as my own actions, and all the
documents in terms of My Equity Interests executed by the Attorney-In-Fact shall be deemed to be executed by me, which I shall
acknowledge and ratify accordingly.
The Attorney-In-Fact have the right to re-authorize and may, at its own discretion, delegate its rights hereunder to other person or entity
in respect of the aforesaid matters without giving prior notice to me or obtaining my consent. The Attorney-In-Fact shall designate a PRC
citizen to exercise the aforementioned rights if so required by PRC laws.
Unless otherwise specified in this Power of Attorney, the Attorney-In-Fact has the right to allocate, use or otherwise dispose of cash
dividends and other non-cash proceeds generated from My Equity Interests in accordance with my oral or written instructions.
During the entire period when I am a shareholder of NIO AI, this Power of Attorney shall be irrevocable and continuously effective and
valid from the date of execution of this Power of Attorney.
In the event of any dispute arising from the performance of this Power of Attorney or in connection with this Power of Attorney, either
myself or the Attorney-In-Fact may submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of either my or the Attorney-In-Fact’s equities, assets,
property interest or land assets (including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or
assets), or propose the winding-up of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws.
In addition, in the course of forming the tribunal, either I or the Attorney-In-Fact shall have the right to file an application to any court
with competent jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of any party of the Attorney-In-
Fact (namely Hefei, China) and places where either my or the Attorney-In-Fact’s main assets are located) for the grant of temporary
reliefs. During the arbitration proceeding, this Power of Attorney shall continue to be valid except for the part which is disputed by either
the Attorney-In-Fact or me and pending for arbitration.
During the term of this Power of Attorney, I hereby waive all the rights associated with My Equity Interests, which have been authorized
to the Attorney-In-Fact through this Power of Attorney, and shall not exercise such rights by myself.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the Parties have caused their respective authorized representatives to execute this Power of Attorney on
November 30, 2022 with immediate effect.
Principal:
Lihong Qin
By:
/s/ Lihong QIN
Accepted by:
Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title: Legal Representative
Acknowledged by:
Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title: Legal Representative
Power of Attorney
The undersigned, Shaoqing Ren, a citizen of the People’s Republic of China (“China” or the “PRC”) whose Identification Card No. is
********, and a holder of 17.76% of the equity interests in Anhui NIO AI Technology Co., Ltd. (“NIO AI”) as of the date of this Power
of Attorney, hereby irrevocably authorize Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”) to
exercise the following rights on my behalf relating to all equity interests held by me now and in the future in NIO AI (“My Equity
Interests”), during the term of this Power of Attorney:
NIO Autonomous Driving or the persons(s) designated by NIO Autonomous Driving (including without limitation to the directors of
NIO Autonomous Driving, their successors and any liquidator in replacement of such directors, but excluding any non-independent
person or person that may cause conflicts of interest) (the “Attorney-In-Fact”) is hereby authorized, as my sole and exclusive agent with
full authority, to act on behalf of myself with respect to all matters concerning My Equity Interests, including without limitation to: 1)
convening and attending shareholders’ meetings of NIO AI; 2) filing all necessary documents with relevant company registry; 3)
exercising all of the shareholder’s rights and shareholder’s voting rights that I am entitled to under the law of the PRC and the articles of
association of NIO AI, including without limitation to the right to receive dividends, sell or transfer or pledge or dispose of My Equity
Interests (in part or in whole); 4) representing myself in executing any resolutions and minutes and approving the amendments to the
articles of association as a shareholder of NIO AI on my behalf; and 5) nominating, appointing or removing on behalf of myself the legal
representative, directors, supervisors, general managers and other senior management members of NIO AI and filing a lawsuit or taking
other legal actions against such legal representative, directors, supervisors, general managers and other senior management members of
NIO AI when their actions harm the interests of NIO AI or its shareholders. Without written consent by NIO Autonomous Driving, I
have no right to increase, decrease, transfer, re-pledge, or by any other manner to dispose of or change My Equity Interests.
For the purpose of entrusting the rights under this Power of Attorney, NIO Autonomous Driving or the person(s) designated by NIO
Autonomous Driving have the right to know all kinds of relevant information about the corporate operation, business, customers,
finance, employees, etc. of NIO AI, for which I shall provide appropriate assistance at request.
I, without the prior written consent of NIO Autonomous Driving, will not directly or indirectly participate in, engage in, involve or own,
or use any information obtained from NIO Autonomous Driving and NIO AI to participate in, engage in, involve or own any business
that may compete with NIO Autonomous Driving, NIO AI or its affiliated companies or main businesses, nor will I hold any interests or
gain benefits from any business that may compete with NIO Autonomous Driving, NIO AI or its affiliated companies or main
businesses. For the avoidance of doubt, this Power of Attorney shall not be considered an authorization for me or other non-independent
persons or persons that may cause conflicts of interest to exercise the rights conferred by this Power of Attorney.
If I become a person with no capacity for civil conduct or a person with limited capacity for civil conduct for any reason, all my
guardians shall continue to perform their duties and have their rights, provided that they shall covenant to continue to comply with the
terms of this Power of Attorney.
The Attorney-In-Fact shall have the right to, on behalf of myself, execute the Exclusive Option Agreement entered into by and among
NIO Autonomous Driving, NIO AI and myself on November 30, 2022 and the Equity Pledge Agreement entered into by and among NIO
Autonomous Driving, NIO AI and myself on November 30, 2022 (including any modification, amendment and restatement thereto,
collectively the “Transaction Documents”) and all the documents I shall sign as stipulated in the Transaction Documents, and to
perform the terms of the Transaction Documents as scheduled. The exercise of such right shall not constitute any restriction or limit on
the authority granted hereunder.
All the actions in terms of My Equity Interests conducted by the Attorney-In-Fact shall be deemed as my own actions, and all the
documents in terms of My Equity Interests executed by the Attorney-In-Fact shall be deemed to be executed by me, which I shall
acknowledge and ratify accordingly.
The Attorney-In-Fact have the right to re-authorize and may, at its own discretion, delegate its rights hereunder to other person or entity
in respect of the aforesaid matters without giving prior notice to me or obtaining my consent. The Attorney-In-Fact shall designate a PRC
citizen to exercise the aforementioned rights if so required by PRC laws.
Unless otherwise specified in this Power of Attorney, the Attorney-In-Fact has the right to allocate, use or otherwise dispose of cash
dividends and other non-cash proceeds generated from My Equity Interests in accordance with my oral or written instructions.
During the entire period when I am a shareholder of NIO AI, this Power of Attorney shall be irrevocable and continuously effective and
valid from the date of execution of this Power of Attorney.
In the event of any dispute arising from the performance of this Power of Attorney or in connection with this Power of Attorney, either
myself or the Attorney-In-Fact may submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of either my or the Attorney-In-Fact’s equities, assets,
property interest or land assets (including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or
assets), or propose the winding-up of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws.
In addition, in the course of forming the tribunal, either I or the Attorney-In-Fact shall have the right to file an application to any court
with competent jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of any party of the Attorney-In-
Fact (namely Hefei, China) and places wher either my or the Attorney-In-Fact’s main assets are located) for the grant of temporary
reliefs. During the arbitration proceeding, this Power of Attorney shall continue to be valid except for the part which is disputed by either
the Attorney-In-Fact or me and subject to arbitration.
During the term of this Power of Attorney, I hereby waive all the rights associated with My Equity Interests, which have been authorized
to the Attorney-In-Fact through this Power of Attorney, and shall not exercise such rights by myself.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the Parties have caused their respective authorized representatives to execute this Power of Attorney on
November 30, 2022 with immediate effect.
Principal:
Shaoqing Ren
By:
/s/ Shaoqing Ren
Accepted by:
Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title: Legal Representative
Acknowledged by:
Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title: Legal Representative
Loan Agreement
Exhibit 4.49
This Loan Agreement (this “Agreement”) is made and entered into by and between the following parties on November 30, 2022
in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Anhui NIO Autonomous Driving Technology Co., Ltd. (the “Lender”), a foreign-invested enterprise, organized and existing under the
laws of the PRC, with its registered address at Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic
and Technological Development Zone, Hefei, Anhui Province; and
Lihong Qin (the “Borrower”), a citizen of China with ID card No.: ********.
In this Agreement, each of the Lender and the Borrower shall be hereinafter referred to as a “Party” respectively, and as the “Parties”
collectively.
Whereas:
A.
B.
Anhui NIO AI Technology Co., Ltd., (the “Borrower Company”) is a limited liability company established in accordance with
the PRC laws and effectively continued with the registered capital of RMB 10,000,000. The Borrower is a shareholder of the
Borrower Company and holds 2.24% of the equity interests, representing RMB 224,000 in the registered capital of the Borrower
Company. All of the equity interest now and hereafter held by the Borrower in the Borrower Company shall be referred to as the
“Borrower Equity Interest”; and
The Lender acknowledges that it agrees to provide the Borrower with a loan in the aggregate amount of RMB 224,000 to be
used for the purposes set forth in this Agreement.
Accordingly, through friendly consultation, the Parties agree as follows:
1
Loan
1.1
In accordance with the terms of this Agreement, the Lender agrees to provide to the Borrower a loan in the aggregate
amount of RMB 224,000 (the “Loan”). The term of the Loan shall be from the effective date hereof until the Lender
exercises its exclusive right to purchase pursuant to the Exclusive Option Agreement (as defined below). Upon the
occurrence of any of the following circumstances, the term of the Loan shall accelerate and the Borrower shall
immediately repay the Loan:
1.1.1
Thirty (30) days elapsed after a written notice from the Lender requesting repayment of the Loan;
1.1.2
The Borrower’s death, lack, or limitation of civil capacity;
1.1.3
The Borrower ceases (for any reason) to be a shareholder of the Borrower Company or its affiliates, and the
Borrower is not an employee of the Lender, the Borrower Company or their affiliates;
1.1.4
The Borrower engages in criminal act or is involved in criminal activities;
1.1.5
According to the applicable laws of China, foreign investors are permitted to invest in the core business that is
currently conducted by the Borrower Company in China, with a controlling stake or in the form of wholly
foreign-owned enterprises, the competent government authorities of China begin to approve such investments,
and the Lender decides to exercise the exclusive option under the Exclusive Option Agreement (the
“Exclusive Option Agreement”) entered into by the Lender, the Borrower and the Borrower Company on
November 30, 2022; or the Borrower or the Borrower Company has violated or committed a breach of its
representations, warranties, covenants or other obligations under the Exclusive Option Agreement;
1.1.6
The Borrower Company failed to obtain or renew any governmental approval or license necessary for the
operation of its core business.
1.2
Without the Lender’s prior written consent, the Borrower shall not transfer the rights and obligations under this
Agreement to any other persons.
1.3
1.4
1.5
1.6
The Borrower agrees to accept the aforementioned Loan provided by the Lender, and hereby agrees and undertakes to
use the Loan for the contribution of the registered capital of the Borrower Company. Without the Lender’s prior written
consent, the Borrower shall not use the Loan for any purpose other than as set forth herein.
The Lender and the Borrower hereby agree and confirm that the Borrower shall repay the Loan only through the
following means (or other means approved by the Lender): by transferring the Borrower Equity Interest in whole to the
Lender or the Lender’s designated person (legal person or natural person) pursuant to the Lender’s exercise of its right
to acquire the Borrower Equity Interest under the Exclusive Option Agreement, and any proceeds from the transfer of
the Borrower Equity Interest (to the extent permitted by the applicable laws) shall be used by the Borrower to repay the
Loan (principal and any interest thereon) to the Lender or the Lender’s designated person in accordance with this
Agreement and the Exclusive Option Agreement and in the manner designated by the Lender.
The Lender and the Borrower hereby agree and confirm that to the extent permitted by the applicable laws, the Lender
shall have the right (but not the obligation) to purchase or designate any other person (legal person or natural person) to
purchase the Borrower Equity Interest in part or in whole at any time, at the price stipulated in the Exclusive Option
Agreement.
When the Borrower transfers the Borrower Equity Interest to the Lender or the Lender’s designated person, in the
event that the transfer price of such Borrower Equity Interest equals to or is lower than the principal of the Loan under
this Agreement, the Loan under this Agreement shall be deemed an interest-free loan; in the event that the transfer
price of such Borrower Equity Interest exceeds the principal of the Loan under this Agreement, the excess over the
principal shall be deemed the interest of the Loan under this Agreement, and all of such interest shall be repaid by the
Borrower to the Lender. When the Lender or the Lender’s designated person obtains all the Borrower Equity Interest
(subject to the AMR registration) and/or the Borrower repays the Loan principal and any interest thereon (if applicable)
to the Lender according to this Agreement and the Exclusive Option Agreement, the Borrower is deemed to have fully
performed its repayment obligations under this Agreement.
2
Representations and Warranties
2.1
The Lender hereby makes the following representations and warranties to the Borrower at the execution date of this
Agreement:
2.1.1
The Lender is a company legally organized and effectively existing in accordance with the laws of China;
2.1.2
The Lender has the legal capacity to execute this Agreement. The execution and performance by the Lender of
this Agreement do not violate the Lender’s business scope and the Lender’s articles of association or other
organizational documents, and the Lender has obtained all necessary and proper approvals and authorizations
for the execution and performance of this Agreement; and
2.1.3
This Agreement, once signed, constitutes the Lender’s legal, valid, and binding obligations enforceable in
accordance with its terms.
2.2
The Borrower hereby makes the following representations and warranties to the Lender at the execution date of this
Agreement:
2.2.1
The Borrower is a natural person with full civil capacity.
2.2.2
2.2.3
2.2.4
The Borrower has the legal capacity to execute and perform this Agreement. The execution and performance
by the Borrower of this Agreement do not violate the Borrower’s business scope and the Borrower’s articles
of association or other organizational documents, and the Borrower has obtained all necessary and proper
approvals and authorizations for the execution and performance of this Agreement;
This Agreement, once signed, constitutes the Borrower’s legal, valid, and binding obligations enforceable in
accordance with its terms; and
There are no disputes, litigations, arbitrations, administrative proceedings, or any other legal proceedings
relating to the Borrower, nor are there any potential disputes, litigations, arbitrations, administrative
proceedings, or any other legal proceedings relating to the Borrower.
3
Borrower’s Covenants
3.1
As a shareholder of the Borrower Company, the Borrower irrevocably covenants that during the term of this
Agreement, the Borrower shall cause the Borrower Company:
3.1.1
3.1.2
3.1.3
3.1.4
to strictly abide by the provisions of the Exclusive Option Agreement to which the Borrower Company is a
party, and to refrain from any action or omission that may affect the effectiveness and enforceability of the
Exclusive Option Agreement;
at the request of the Lender (or any other person designated by the Lender), to execute the
contracts/agreements on business cooperation with the Lender (or any other person designated by the Lender),
and to strictly abide by such contracts/agreements;
to provide the Lender with all of the information on the Borrower Company’s business operations and
financial condition at the Lender’s request;
to immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration, or
administrative proceedings relating to the Borrower Company’s assets, business, or income; and
3.1.5
to appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender.
3.2
The Borrower covenants that during the term of this Agreement, he/she shall:
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5
3.2.6
3.2.7
endeavor to keep the Borrower Company to be engaged in its core business and the specific business scope is
subject to that provided in its business license;
abide by the provisions of this Agreement, the Equity Pledge Agreement attached herein as Exhibit I (the
“Equity Pledge Agreement”) and the Exclusive Option Agreement to which the Borrower is a party,
practically perform the obligations under this Agreement, the Equity Pledge Agreement and the Exclusive
Option Agreement, and refrain from any action/omission that may affect the effectiveness and enforceability
of this Agreement, the Equity Pledge Agreement and the Exclusive Option Agreement;
not sell, transfer, mortgage or dispose of in any other manner the legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, except in accordance with the
Equity Pledge Agreement;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, without the prior written consent of
the Lender, except to the Lender or the Lender’s designated person;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
merger or consolidation of the Borrower Company with any person, or its acquisition of or investment in any
person, without the prior written consent of the Lender;
immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the Borrower Equity Interest;
to the extent necessary to maintain the ownership of the Borrower Equity Interest, execute all necessary or
appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate
complaints or raise necessary and appropriate defense against all claims;
3.2.8
without the prior written consent of the Lender, refrain from any action/omission that may have a material
impact on the assets, business and liabilities of the Borrower Company;
3.2.9
appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender;
3.2.10
to the extent permitted by the laws of China, at the request of the Lender at any time, promptly and
unconditionally transfer all of the Borrower Equity Interest to the Lender or the Lender’s designated person at
any time, and ensure the other shareholders of the Borrower Company to waive their right of first refusal with
respect to the share transfer described in this Article;
3.2.11
to the extent permitted by the laws of China, at the request of the Lender at any time, ensure that the other
shareholders of the Borrower Company shall promptly and unconditionally transfer all of their equity interests
in the Borrower Company to the Lender or the Lender’s designated person at any time, and the Borrower
hereby waives his right of first refusal (if any) with respect to the equity transfer by such other shareholders
described in this Article;
3.2.12
in the event that the Lender purchases the Borrower Equity Interest from the Borrower in accordance with the
provisions of the Exclusive Option Agreement, use such purchase price obtained thereby to repay the Loan to
the Lender; and
3.2.13 without the prior written consent of the Lender, not cause the Borrower Company to supplement, change, or
amend its articles of association in any manner, increase or decrease its registered capital or change its share
capital structure in any manner.
4
Liability for Default
5
Notices
5.1
4.1
4.2
4.3
If the Borrower materially breaches any provision under this Agreement, the Lender is entitled to terminate
this Agreement immediately after delivering a written notice to the Borrower and the Borrower shall
compensate all the losses suffered by the Lender as a result of the Borrower's default or early termination of
this Agreement. The remedies set out in this Article 4.1 are not exclusive remedies and shall not prejudice any
other remedies of the Lender under this Agreement or the applicable laws.
The Borrower shall not have any right to terminate this Agreement unilaterally in any event unless otherwise
required by the applicable laws.
In the event that the Borrower fails to perform the repayment obligations set forth in this Agreement, the
Borrower shall pay an overdue interest of 0.01% per day for the outstanding payment, until the day the
Borrower repays all the amounts (including overdue interests).
All notices and other communications required to be given pursuant to this Agreement or otherwise given in
connection with this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, commercial
courier service, facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be
sent by email. The dates on which notices shall be deemed to have been effectively served shall be determined as
follows:
5.1.1
5.1.2
5.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date
of signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the
date on the registered letter receipt; or
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the
date indicated on the fax transmission record.
5.2
For the purpose of notice, the addresses of the Parties are as follows:
Lender:
Address:
Attn:
Borrower:
Address:
Attn:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Juan Gan
Lihong Qin
********
Lihong Qin
Borrower Company: Anhui NIO AI Technology Co., Ltd.
Address:
Attn:
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Juan Gan
5.3
Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of
this Section.
6
Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are confidential
information. Both Parties shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that:
(a) is in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels
or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed
disclosure of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
7
Governing Law and Disputes Resolution
7.1
7.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the laws of the PRC.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of all the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of all the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition,
in the course of forming the tribunal, both Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of all the Parties (namely
Hefei, China)) and places where the principal assets of either Party) for the grant of temporary reliefs.
7.3
During the arbitration, except for the matters under dispute and pending for arbitration, the parties shall continue to
exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
8
Miscellaneous
8.1
8.2
8.3
8.4
8.5
8.6
This Agreement shall become effective upon execution by the Parties, and shall expire upon the date of full
performance by the Parties of their respective obligations under this Agreement.
This Agreement shall be written in Chinese in two copies. The Lender and the Borrower shall hold one copy
respectively and each shall have equal legal validity as this Agreement.
Any amendment and supplement to this Agreement shall be made in writing by the Parties to this Agreement. Any
amendment agreement and supplementary agreement duly executed by the Parties hereto with regard to this Agreement
shall constitute an integral part of this Agreement, and shall have equal legal validity as this Agreement.
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in
any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good
faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the
greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions
shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.
Attachments of this Agreement (if any) shall constitute an integral part of this Agreement, and shall have equal legal
validity as this Agreement.
Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this
Agreement shall survive the expiration or early termination thereof. The provisions under Articles 4, 6, 7 and 8.6
herein of this Agreement shall survive the expiration or termination of this Agreement.
(The remainder of this page is intentionally left blank, signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Loan Agreement as of the date first
written above, which will take effect in accordance with the provisions of this Agreement.
Lender: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
/s/ Lihong Qin
Name: Lihong Qin
Title:
Legal Representative
Borrower: Lihong Qin
By:
/s/ Lihong Qin
Exhibit I – Equity Pledge Agreement
Loan Agreement
This Loan Agreement (this “Agreement”) is made and entered into by and between the following parties on November 30, 2022
in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Anhui NIO Autonomous Driving Technology Co., Ltd. (the “Lender”), a foreign-invested enterprise, organized and existing under the
laws of the PRC, with its registered address at Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic
and Technological Development Zone, Hefei, Anhui Province; and
Bin Li (the “Borrower”), a citizen of China with ID card No.: ********.
In this Agreement, each of the Lender and the Borrower shall be hereinafter referred to as a “Party” respectively, and as the “Parties”
collectively.
Whereas:
A.
B.
Anhui NIO AI Technology Co., Ltd., (the “Borrower Company”) is a limited liability company established in accordance with
the PRC laws and effectively continued with the registered capital of RMB 10,000,000. The Borrower is a shareholder of the
Borrower Company and holds 80% of the equity interests, representing RMB 8,000,000 in the registered capital of the Borrower
Company. All of the equity interest now and hereafter held by the Borrower in the Borrower Company shall be referred to as the
“Borrower Equity Interest”; and
The Lender acknowledges that it agrees to provide the Borrower with a loan in the aggregate amount of RMB 8,000,000 to be
used for the purposes set forth in this Agreement.
Accordingly, through friendly consultation, the Parties agree as follows:
1
Loan
1.1
In accordance with the terms of this Agreement, the Lender agrees to provide to the Borrower a loan in the aggregate
amount of RMB 8,000,000 (the “Loan”). The term of the Loan shall be from the effective date hereof until the Lender
exercises its exclusive right to purchase pursuant to the Exclusive Option Agreement (as defined below). Upon the
occurrence of any of the following circumstances, the term of the Loan shall accelerate and the Borrower shall
immediately repay the Loan:
1.1.1
Thirty (30) days elapsed after a written notice from the Lender requesting repayment of the Loan;
1.1.2
The Borrower’s death, lack, or limitation of civil capacity;
1.1.3
The Borrower ceases (for any reason) to be a shareholder of the Borrower Company or its affiliates, and the
Borrower is not an employee of the Lender, the Borrower Company or their affiliates;
1.1.4
The Borrower engages in criminal act or is involved in criminal activities;
1.1.5
According to the applicable laws of China, foreign investors are permitted to invest in the core business that is
currently conducted by the Borrower Company in China, with a controlling stake or in the form of wholly
foreign-owned enterprises, the competent government authorities of China begin to approve such investments,
and the Lender decides to exercise the exclusive option under the Exclusive Option Agreement (the
“Exclusive Option Agreement”) entered into by the Lender, the Borrower and the Borrower Company on
November 30, 2022; or the Borrower or the Borrower Company has violated or committed a breach of its
representations, warranties, covenants or other obligations under the Exclusive Option Agreement;
1.1.6
The Borrower Company failed to obtain or renew any governmental approval or license necessary for the
operation of its core business.
1.2
Without the Lender’s prior written consent, the Borrower shall not transfer the rights and obligations under this
Agreement to any other persons.
1.3
1.4
1.5
1.6
The Borrower agrees to accept the aforementioned Loan provided by the Lender, and hereby agrees and undertakes to
use the Loan for the contribution of the registered capital of the Borrower Company. Without the Lender’s prior written
consent, the Borrower shall not use the Loan for any purpose other than as set forth herein.
The Lender and the Borrower hereby agree and confirm that the Borrower shall repay the Loan only through the
following means (or other means approved by the Lender): by transferring the Borrower Equity Interest in whole to the
Lender or the Lender’s designated person (legal person or natural person) pursuant to the Lender’s exercise of its right
to acquire the Borrower Equity Interest under the Exclusive Option Agreement, and any proceeds from the transfer of
the Borrower Equity Interest (to the extent permitted by the applicable laws) shall be used by the Borrower to repay the
Loan (principal and any interest thereon) to the Lender or the Lender’s designated person in accordance with this
Agreement and the Exclusive Option Agreement and in the manner designated by the Lender.
The Lender and the Borrower hereby agree and confirm that to the extent permitted by the applicable laws, the Lender
shall have the right (but not the obligation) to purchase or designate any other person (legal person or natural person) to
purchase the Borrower Equity Interest in part or in whole at any time, at the price stipulated in the Exclusive Option
Agreement.
When the Borrower transfers the Borrower Equity Interest to the Lender or the Lender’s designated person, in the
event that the transfer price of such Borrower Equity Interest equals to or is lower than the principal of the Loan under
this Agreement, the Loan under this Agreement shall be deemed an interest-free loan; in the event that the transfer
price of such Borrower Equity Interest exceeds the principal of the Loan under this Agreement, the excess over the
principal shall be deemed the interest of the Loan under this Agreement, and all of such interest shall be repaid by the
Borrower to the Lender. When the Lender or the Lender’s designated person obtains all the Borrower Equity Interest
(subject to the AMR registration) and/or the Borrower repays the Loan principal and any interest thereon (if applicable)
to the Lender according to this Agreement and the Exclusive Option Agreement, the Borrower is deemed to have fully
performed its repayment obligations under this Agreement.
2
Representations and Warranties
2.1
The Lender hereby makes the following representations and warranties to the Borrower at the execution date of this
Agreement:
2.1.1
The Lender is a company legally organized and effectively existing in accordance with the laws of China;
2.1.2
The Lender has the legal capacity to execute this Agreement. The execution and performance by the Lender of
this Agreement do not violate the Lender’s business scope and the Lender’s articles of association or other
organizational documents, and the Lender has obtained all necessary and proper approvals and authorizations
for the execution and performance of this Agreement; and
2.1.3
This Agreement, once signed, constitutes the Lender’s legal, valid, and binding obligations enforceable in
accordance with its terms.
2.2
The Borrower hereby makes the following representations and warranties to the Lender at the execution date of this
Agreement:
2.2.1
The Borrower is a natural person with full civil capacity.
2.2.2
2.2.3
2.2.4
The Borrower has the legal capacity to execute and perform this Agreement. The execution and performance
by the Borrower of this Agreement do not violate the Borrower’s business scope and the Borrower’s articles
of association or other organizational documents, and the Borrower has obtained all necessary and proper
approvals and authorizations for the execution and performance of this Agreement;
This Agreement, once signed, constitutes the Borrower’s legal, valid, and binding obligations enforceable in
accordance with its terms; and
There are no disputes, litigations, arbitrations, administrative proceedings, or any other legal proceedings
relating to the Borrower, nor are there any potential disputes, litigations, arbitrations, administrative
proceedings, or any other legal proceedings relating to the Borrower.
3
Borrower’s Covenants
3.1
As a shareholder of the Borrower Company, the Borrower irrevocably covenants that during the term of this
Agreement, the Borrower shall cause the Borrower Company:
3.1.1
3.1.2
3.1.3
3.1.4
to strictly abide by the provisions of the Exclusive Option Agreement to which the Borrower Company is a
party, and to refrain from any action or omission that may affect the effectiveness and enforceability of the
Exclusive Option Agreement;
at the request of the Lender (or any other person designated by the Lender), to execute the
contracts/agreements on business cooperation with the Lender (or any other person designated by the Lender),
and to strictly abide by such contracts/agreements;
to provide the Lender with all of the information on the Borrower Company’s business operations and
financial condition at the Lender’s request;
to immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration, or
administrative proceedings relating to the Borrower Company’s assets, business, or income; and
3.1.5
to appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender.
3.2
The Borrower covenants that during the term of this Agreement, he/she shall:
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5
3.2.6
3.2.7
endeavor to keep the Borrower Company to be engaged in its core business and the specific business scope is
subject to that provided in its business license;
abide by the provisions of this Agreement, the Equity Pledge Agreement attached herein as Exhibit I (the
“Equity Pledge Agreement”) and the Exclusive Option Agreement to which the Borrower is a party,
practically perform the obligations under this Agreement, the Equity Pledge Agreement and the Exclusive
Option Agreement, and refrain from any action/omission that may affect the effectiveness and enforceability
of this Agreement, the Equity Pledge Agreement and the Exclusive Option Agreement;
not sell, transfer, mortgage or dispose of in any other manner the legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, except in accordance with the
Equity Pledge Agreement;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, without the prior written consent of
the Lender, except to the Lender or the Lender’s designated person;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
merger or consolidation of the Borrower Company with any person, or its acquisition of or investment in any
person, without the prior written consent of the Lender;
immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the Borrower Equity Interest;
to the extent necessary to maintain the ownership of the Borrower Equity Interest, execute all necessary or
appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate
complaints or raise necessary and appropriate defense against all claims;
3.2.8
without the prior written consent of the Lender, refrain from any action/omission that may have a material
impact on the assets, business and liabilities of the Borrower Company;
3.2.9
appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender;
3.2.10
to the extent permitted by the laws of China, at the request of the Lender at any time, promptly and
unconditionally transfer all of the Borrower Equity Interest to the Lender or the Lender’s designated person at
any time, and ensure the other shareholders of the Borrower Company to waive their right of first refusal with
respect to the share transfer described in this Article;
3.2.11
to the extent permitted by the laws of China, at the request of the Lender at any time, ensure that the other
shareholders of the Borrower Company shall promptly and unconditionally transfer all of their equity interests
in the Borrower Company to the Lender or the Lender’s designated person at any time, and the Borrower
hereby waives his right of first refusal (if any) with respect to the equity transfer by such other shareholders
described in this Article;
3.2.12
in the event that the Lender purchases the Borrower Equity Interest from the Borrower in accordance with the
provisions of the Exclusive Option Agreement, use such purchase price obtained thereby to repay the Loan to
the Lender; and
3.2.13 without the prior written consent of the Lender, not cause the Borrower Company to supplement, change, or
amend its articles of association in any manner, increase or decrease its registered capital or change its share
capital structure in any manner.
4
Liability for Default
4.1
4.2
4.3
If the Borrower materially breaches any provision under this Agreement, the Lender is entitled to terminate this
Agreement immediately after delivering a written notice to the Borrower and the Borrower shall compensate all the
losses suffered by the Lender as a result of the Borrower's default or early termination of this Agreement. The remedies
set out in this Article 4.1 are not exclusive remedies and shall not prejudice any other remedies of the Lender under this
Agreement or the applicable laws.
The Borrower shall not have any right to terminate this Agreement unilaterally in any event unless otherwise required
by the applicable laws.
In the event that the Borrower fails to perform the repayment obligations set forth in this Agreement, the Borrower
shall pay an overdue interest of 0.01% per day for the outstanding payment, until the day the Borrower repays all the
amounts (including overdue interests).
5
Notices
5.1
All notices and other communications required to be given pursuant to this Agreement or otherwise given in connection
with this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, commercial courier
service, facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be sent by
email. The dates on which notices shall be deemed to have been effectively served shall be determined as follows:
5.1.1
5.1.2
5.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date
of signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the
date on the registered letter receipt; or
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the
date indicated on the fax transmission record.
5.2
For the purpose of notice, the addresses of the Parties are as follows:
Lender:
Address:
Attn:
Borrower:
Address:
Attn:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Juan Gan
Bin Li
********
Bin Li
Borrower Company: Anhui NIO AI Technology Co., Ltd.
Address:
Attn:
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Juan Gan
5.3
Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of
this Section.
6
Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are confidential
information. Both Parties shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that:
(a) is in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels
or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed
disclosure of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
7
Governing Law and Disputes Resolution
7.1
7.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the laws of the PRC.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of all the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of all the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition,
in the course of forming the tribunal, both Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of all the Parties (namely
Hefei, China)) and places where the principal assets of either Party are located) for the grant of temporary reliefs.
7.3
During the arbitration, except for the matters under dispute and pending for arbitration, the parties shall continue to
exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
8
Miscellaneous
8.1
8.2
8.3
8.4
8.5
8.6
This Agreement shall become effective upon execution by the Parties, and shall expire upon the date of full
performance by the Parties of their respective obligations under this Agreement.
This Agreement shall be written in Chinese in two copies. The Lender and the Borrower shall hold one copy
respectively and each shall have equal legal validity as this Agreement.
Any amendment and supplement to this Agreement shall be made in writing by the Parties to this Agreement. Any
amendment agreement and supplementary agreement duly executed by the Parties hereto with regard to this Agreement
shall constitute an integral part of this Agreement, and shall have equal legal validity as this Agreement.
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in
any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good
faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the
greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions
shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.
Attachments of this Agreement (if any) shall constitute an integral part of this Agreement, and shall have equal legal
validity as this Agreement.
Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this
Agreement shall survive the expiration or early termination thereof. The provisions under Articles 4, 6, 7 and 8.6
herein of this Agreement shall survive the expiration or termination of this Agreement.
(The remainder of this page is intentionally left blank, signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Loan Agreement as of the date first
written above, which will take effect in accordance with the provisions of this Agreement.
Lender: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
/s/ Lihong Qin
Name: Lihong Qin
Title: Legal Representative
Borrower: Bin Li
By:
/s/ Bin Li
Exhibit I – Equity Pledge Agreement
Loan Agreement
This Loan Agreement (this “Agreement”) is made and entered into by and between the following parties on November 30, 2022
in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Anhui NIO Autonomous Driving Technology Co., Ltd. (the “Lender”), a foreign-invested enterprise, organized and existing under the
laws of the PRC, with its registered address at Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic
and Technological Development Zone, Hefei, Anhui Province; and
Shaoqing Ren (the “Borrower”), a citizen of China with ID card No.: ********.
In this Agreement, each of the Lender and the Borrower shall be hereinafter referred to as a “Party” respectively, and as the “Parties”
collectively.
Whereas:
A.
B.
Anhui NIO AI Technology Co., Ltd., (the “Borrower Company”) is a limited liability company established in accordance with
the PRC laws and effectively continued with the registered capital of RMB 10,000,000. The Borrower is a shareholder of the
Borrower Company and holds 17.76% of the equity interests, representing RMB 1,776,000 in the registered capital of the
Borrower Company. All of the equity interest now and hereafter held by the Borrower in the Borrower Company shall be
referred to as the “Borrower Equity Interest”; and
The Lender acknowledges that it agrees to provide the Borrower with a loan in the aggregate amount of RMB 1,776,000 to be
used for the purposes set forth in this Agreement.
Accordingly, through friendly consultation, the Parties agree as follows:
1
Loan
1.1
In accordance with the terms of this Agreement, the Lender agrees to provide to the Borrower a loan in the aggregate
amount of RMB 1,776,000 (the “Loan”). The term of the Loan shall be from the effective date hereof until the Lender
exercises its exclusive right to purchase pursuant to the Exclusive Option Agreement (as defined below). Upon the
occurrence of any of the following circumstances, the term of the Loan shall accelerate and the Borrower shall
immediately repay the Loan:
1.1.1
Thirty (30) days elapsed after a written notice from the Lender requesting repayment of the Loan;
1.1.2
The Borrower’s death, lack, or limitation of civil capacity;
1.1.3
The Borrower ceases (for any reason) to be a shareholder of the Borrower Company or its affiliates, and the
Borrower is not an employee of the Lender, the Borrower Company or their affiliates;
1.1.4
The Borrower engages in criminal act or is involved in criminal activities;
1.1.5
According to the applicable laws of China, foreign investors are permitted to invest in the core business that is
currently conducted by the Borrower Company in China, with a controlling stake or in the form of wholly
foreign-owned enterprises, the competent government authorities of China begin to approve such investments,
and the Lender decides to exercise the exclusive option under the Exclusive Option Agreement (the
“Exclusive Option Agreement”) entered into by the Lender, the Borrower and the Borrower Company on
November 30, 2022; or the Borrower or the Borrower Company has violated or committed a breach of its
representations, warranties, covenants or other obligations under the Exclusive Option Agreement;
1.1.6
The Borrower Company failed to obtain or renew any governmental approval or license necessary for the
operation of its core business.
1.2
Without the Lender’s prior written consent, the Borrower shall not transfer the rights and obligations under this
Agreement to any other persons.
1.3
1.4
1.5
1.6
The Borrower agrees to accept the aforementioned Loan provided by the Lender, and hereby agrees and undertakes to
use the Loan for the contribution of the registered capital of the Borrower Company. Without the Lender’s prior written
consent, the Borrower shall not use the Loan for any purpose other than as set forth herein.
The Lender and the Borrower hereby agree and confirm that the Borrower shall repay the Loan only through the
following means (or other means approved by the Lender): by transferring the Borrower Equity Interest in whole to the
Lender or the Lender’s designated person (legal person or natural person) pursuant to the Lender’s exercise of its right
to acquire the Borrower Equity Interest under the Exclusive Option Agreement, and any proceeds from the transfer of
the Borrower Equity Interest (to the extent permitted by the applicable laws) shall be used by the Borrower to repay the
Loan (principal and any interest thereon) to the Lender or the Lender’s designated person in accordance with this
Agreement and the Exclusive Option Agreement and in the manner designated by the Lender.
The Lender and the Borrower hereby agree and confirm that to the extent permitted by the applicable laws, the Lender
shall have the right (but not the obligation) to purchase or designate any other person (legal person or natural person) to
purchase the Borrower Equity Interest in part or in whole at any time, at the price stipulated in the Exclusive Option
Agreement.
When the Borrower transfers the Borrower Equity Interest to the Lender or the Lender’s designated person, in the
event that the transfer price of such Borrower Equity Interest equals to or is lower than the principal of the Loan under
this Agreement, the Loan under this Agreement shall be deemed an interest-free loan; in the event that the transfer
price of such Borrower Equity Interest exceeds the principal of the Loan under this Agreement, the excess over the
principal shall be deemed the interest of the Loan under this Agreement, and all of such interest shall be repaid by the
Borrower to the Lender. When the Lender or the Lender’s designated person obtains all the Borrower Equity Interest
(subject to the AMR registration) and/or the Borrower repays the Loan principal and any interest thereon (if applicable)
to the Lender according to this Agreement and the Exclusive Option Agreement, the Borrower is deemed to have fully
performed its repayment obligations under this Agreement.
2
Representations and Warranties
2.1
The Lender hereby makes the following representations and warranties to the Borrower at the execution date of this
Agreement:
2.1.1
The Lender is a company legally organized and effectively existing in accordance with the laws of China;
2.1.2
The Lender has the legal capacity to execute this Agreement. The execution and performance by the Lender of
this Agreement do not violate the Lender’s business scope and the Lender’s articles of association or other
organizational documents, and the Lender has obtained all necessary and proper approvals and authorizations
for the execution and performance of this Agreement; and
2.1.3
This Agreement, once signed, constitutes the Lender’s legal, valid, and binding obligations enforceable in
accordance with its terms.
2.2
The Borrower hereby makes the following representations and warranties to the Lender at the execution date of this
Agreement:
2.2.1
The Borrower is a natural person with full civil capacity.
2.2.2
2.2.3
2.2.4
The Borrower has the legal capacity to execute and perform this Agreement. The execution and performance
by the Borrower of this Agreement do not violate the Borrower’s business scope and the Borrower’s articles
of association or other organizational documents, and the Borrower has obtained all necessary and proper
approvals and authorizations for the execution and performance of this Agreement;
This Agreement, once signed, constitutes the Borrower’s legal, valid, and binding obligations enforceable in
accordance with its terms; and
There are no disputes, litigations, arbitrations, administrative proceedings, or any other legal proceedings
relating to the Borrower, nor are there any potential disputes, litigations, arbitrations, administrative
proceedings, or any other legal proceedings relating to the Borrower.
3
Borrower’s Covenants
3.1
As a shareholder of the Borrower Company, the Borrower irrevocably covenants that during the term of this
Agreement, the Borrower shall cause the Borrower Company:
3.1.1
3.1.2
3.1.3
3.1.4
to strictly abide by the provisions of the Exclusive Option Agreement to which the Borrower Company is a
party, and to refrain from any action or omission that may affect the effectiveness and enforceability of the
Exclusive Option Agreement;
at the request of the Lender (or any other person designated by the Lender), to execute the
contracts/agreements on business cooperation with the Lender (or any other person designated by the Lender),
and to strictly abide by such contracts/agreements;
to provide the Lender with all of the information on the Borrower Company’s business operations and
financial condition at the Lender’s request;
to immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration, or
administrative proceedings relating to the Borrower Company’s assets, business, or income; and
3.1.5
to appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender.
3.2
The Borrower covenants that during the term of this Agreement, he/she shall:
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5
3.2.6
3.2.7
endeavor to keep the Borrower Company to be engaged in its core business and the specific business scope is
subject to that provided in its business license;
abide by the provisions of this Agreement, the Equity Pledge Agreement attached herein as Exhibit I (the
“Equity Pledge Agreement”) and the Exclusive Option Agreement to which the Borrower is a party,
practically perform the obligations under this Agreement, the Equity Pledge Agreement and the Exclusive
Option Agreement, and refrain from any action/omission that may affect the effectiveness and enforceability
of this Agreement, the Equity Pledge Agreement and the Exclusive Option Agreement;
not sell, transfer, mortgage or dispose of in any other manner the legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, except in accordance with the
Equity Pledge Agreement;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, without the prior written consent of
the Lender, except to the Lender or the Lender’s designated person;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
merger or consolidation of the Borrower Company with any person, or its acquisition of or investment in any
person, without the prior written consent of the Lender;
immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the Borrower Equity Interest;
to the extent necessary to maintain the ownership of the Borrower Equity Interest, execute all necessary or
appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate
complaints or raise necessary and appropriate defense against all claims;
3.2.8
without the prior written consent of the Lender, refrain from any action/omission that may have a material
impact on the assets, business and liabilities of the Borrower Company;
3.2.9
appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender;
3.2.10
to the extent permitted by the laws of China, at the request of the Lender at any time, promptly and
unconditionally transfer all of the Borrower Equity Interest to the Lender or the Lender’s designated person at
any time, and ensure the other shareholders of the Borrower Company to waive their right of first refusal with
respect to the share transfer described in this Article;
3.2.11
to the extent permitted by the laws of China, at the request of the Lender at any time, ensure that the other
shareholders of the Borrower Company shall promptly and unconditionally transfer all of their equity interests
in the Borrower Company to the Lender or the Lender’s designated person at any time, and the Borrower
hereby waives his right of first refusal (if any) with respect to the equity transfer by such other shareholders
described in this Article;
3.2.12
in the event that the Lender purchases the Borrower Equity Interest from the Borrower in accordance with the
provisions of the Exclusive Option Agreement, use such purchase price obtained thereby to repay the Loan to
the Lender; and
3.2.13 without the prior written consent of the Lender, not cause the Borrower Company to supplement, change, or
amend its articles of association in any manner, increase or decrease its registered capital or change its share
capital structure in any manner.
4
Liability for Default
4.1
4.2
4.3
If the Borrower materially breaches any provision under this Agreement, the Lender is entitled to terminate this
Agreement immediately after delivering a written notice to the Borrower and the Borrower shall compensate all the
losses suffered by the Lender as a result of the Borrower's default or early termination of this Agreement. The remedies
set out in this Article 4.1 are not exclusive remedies and shall not prejudice any other remedies of the Lender under this
Agreement or the applicable laws.
The Borrower shall not have any right to terminate this Agreement unilaterally in any event unless otherwise required
by the applicable laws.
In the event that the Borrower fails to perform the repayment obligations set forth in this Agreement, the Borrower
shall pay an overdue interest of 0.01% per day for the outstanding payment, until the day the Borrower repays all the
amounts (including overdue interests).
5
Notices
5.1
All notices and other communications required to be given pursuant to this Agreement or otherwise given in
connection with this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, commercial
courier service, facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be
sent by email. The dates on which notices shall be deemed to have been effectively served shall be determined as
follows:
5.1.1
5.1.2
5.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date
of signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the
date on the registered letter receipt; or
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the
date indicated on the fax transmission record.
5.2
For the purpose of notice, the addresses of the Parties are as follows:
Lender:
Address:
Attn:
Borrower:
Address:
Attn:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Juan Gan
Shaoqing Ren
********
Shaoqing Ren
Borrower Company: Anhui NIO AI Technology Co., Ltd.
Address:
Attn:
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Juan Gan
5.3
Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of
this Section.
6
Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are confidential
information. Both Parties shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that:
(a) is in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels
or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed
disclosure of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
7
Governing Law and Disputes Resolution
7.1
7.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the laws of the PRC.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of all the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of all the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition,
in the course of forming the tribunal, both Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of all the Parties (namely
Hefei, China)) and places where the principal assets of either Party are located) for the grant of temporary reliefs.
7.3
During the arbitration, except for the matters under dispute and pending for arbitration, the parties shall continue to
exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
8 Miscellaneous
8.1
8.2
8.3
8.4
8.5
8.6
This Agreement shall become effective upon execution by the Parties, and shall expire upon the date of full
performance by the Parties of their respective obligations under this Agreement.
This Agreement shall be written in Chinese in two copies. The Lender and the Borrower shall hold one copy
respectively and each shall have equal legal validity as this Agreement.
Any amendment and supplement to this Agreement shall be made in writing by the Parties to this Agreement. Any
amendment agreement and supplementary agreement duly executed by the Parties hereto with regard to this Agreement
shall constitute an integral part of this Agreement, and shall have equal legal validity as this Agreement.
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in
any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good
faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the
greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions
shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.
Attachments of this Agreement (if any) shall constitute an integral part of this Agreement, and shall have equal legal
validity as this Agreement.
Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this
Agreement shall survive the expiration or early termination thereof. The provisions under Articles 4, 6, 7 and 8.6
herein of this Agreement shall survive the expiration or termination of this Agreement.
(The remainder of this page is intentionally left blank, signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Loan Agreement as of the date first
written above, which will take effect in accordance with the provisions of this Agreement.
Lender: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
/s/ Lihong Qin
Name: Lihong Qin
Title: Legal Representative
Borrower: Shaoqing Ren
By:
/s/ Shaoqing Ren
Exhibit I – Equity Pledge Agreement
Equity Pledge Agreement
Exhibit 4.50
This Equity Pledge Agreement (this “Agreement”) is made and entered into by and between the following parties on November 30,
2022 in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong
Special Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (hereinafter the “Pledgee”)
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B: Bin Li (hereinafter the “Pledgor”)
Address: ********
Party C: Anhui NIO AI Technology Co., Ltd.
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
In this Agreement, each of the Pledgee, the Pledgor and Party C shall be hereinafter referred to as a “Party” respectively, and as the
“Parties” collectively.
Whereas,
(1)
(2)
(3)
The Pledgor is a citizen of China with ID card No.:********, who as of the date hereof holds 80% of the equity interests of
Party C, representing RMB 8,000,000 in the registered capital of Party C. Party C is a limited liability company registered in
Hefei, China, and engaged in research and development of new-energy vehicle related technology. Party C hereby
acknowledges the respective rights and obligations of the Pledgor and the Pledgee under this Agreement, and intends to provide
any necessary assistance in registering the Pledge;
The Pledgee is a foreign-invested enterprise registered in China. The Pledgee and Party C have executed an Exclusive Business
Cooperation Agreement (as defined below); Party C, the Pledgee and the Pledgor have executed an Exclusive Option
Agreement (as defined below); the Pledgee and the Pledgor have executed a Loan Agreement (as defined below); and the
Pledgor has executed a Power of Attorney (as defined below) in favor of the Pledgee;
To ensure that Party C and the Pledgor fully perform their obligations under the Exclusive Business Cooperation Agreement, the
Exclusive Option Agreement, the Load Agreement and the Power of Attorney, the Pledgor hereby pledges to the Pledgee all of
the equity interests that the Pledgor holds in Party C as security for the performance by Party C and the Pledgor of their
obligations under the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Loan Agreement and
the Power of Attorney.
To perform the provisions of the Transaction Documents (as defined below), the Parties have mutually agreed to execute this Agreement
upon the following terms.
Article 1 Definitions
Unless otherwise provided in this Agreement, the terms below shall have the following meanings:
1.1
1.2
Pledge: shall refer to the security interest granted by the Pledgor to the Pledgee pursuant to Article 2 of this Agreement,
which means the right of the Pledgee to be paid in priority with the Pledged Equity Interest based on the monetary
valuation that such Pledged Equity Interest is converted into or from the proceeds from the auction or sale of the
Pledged Equity Interest pledged by the Pledgor to the Pledgee.
Pledged Equity Interest: shall refer to 80% equity interests in Party C currently held by the Pledgor, representing
RMB8,000,000 in the registered capital of Party C, and all of the equity interests hereafter held by the Pledgor in Party
C.
1.3
1.4
1.5
1.6
1.7
1.8
Term of the Pledge: shall refer to the term set forth in Article 3 of this Agreement.
Transaction Documents: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party
C and the Pledgee on November 30, 2022 (the “Exclusive Business Cooperation Agreement”), the Loan Agreement
executed by and between the Pledgee and the Pledgor on November 30, 2022 (the “Loan Agreement”), the Exclusive
Option Agreement executed by and among Party C, the Pledgee and the Pledgor on November 30, 2022 (the
“Exclusive Option Agreement”), the Power of Attorney executed on November 30, 2022 by the Pledgor (the “Power
of Attorney”) and any modification, amendment and/or restatement to the aforementioned documents.
Contract Obligations: shall refer to all the obligations of the Pledgor under the Exclusive Option Agreement, the Loan
Agreement, the Power of Attorney and this Agreement; all the obligations of Party C under the Exclusive Business
Cooperation Agreement, the Exclusive Option Agreement and this Agreement.
Secured Debts: shall refer to all the direct, indirect and derivative losses and losses of anticipated profits, suffered by
the Pledgee, incurred as a result of any Event of Default on the part of the Pledgor and/or Party C. The amount of such
losses shall be calculated based on such factors as the reasonable business plan and profit forecast of the Pledgee, the
service fees payable by Party C under the Exclusive Business Cooperation Agreement, the amount of loans repayable
by the Pledgor under the Loan Agreement and all expenses occurred by the Pledgee in connection with enforcement of
the Pledgor’s and/or Party C’s Contract Obligations. The guaranteed amount is RMB 8,000,000.
Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.
Notice of Default: shall refer to the notice issued by the Pledgee in accordance with this Agreement declaring an Event
of Default.
Article 2 Pledge
2.1
2.2
2.3
2.4
The Pledgor hereby agrees to pledge all the Pledged Equity Interest as security for performance of the Contract
Obligations and payment of the Secured Debts under this Agreement. Party C hereby agrees that the Pledgor pledges
the Pledged Equity Interest to the Pledgee pursuant to this Agreement.
During the Term of the Pledge, the Pledgee is entitled to receive dividends distributed on the Pledged Equity Interest.
Without the prior written consent of the Pledgee, the Pledgor shall not receive dividends distributed on the Pledged
Equity Interest. Dividends received by the Pledgor on the Pledged Equity Interest after the deduction of individual
income tax paid by the Pledgor shall be, as required by the Pledgee, (1) deposited into an account designated and
supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured Debts prior and in
preference to making any other payment; or (2) to the extent not prohibited by the applicable PRC laws,
unconditionally donated to the Pledgee or any other person designated by the Pledgee.
The Pledgor may subscribe for a capital increase in Party C only with prior written consent of the Pledgee. Any
additional equity interest obtained by the Pledgor as a result of the Pledgor’s subscription of the increased registered
capital of Party C shall also be deemed as Pledged Equity Interest, and the Parties shall enter into further equity pledge
agreement for this purpose and complete registration of the pledge of such additional equity interest.
In the event that Party C is required by the PRC law to be liquidated or dissolved, any interest distributed to the
Pledgor upon Party C’s dissolution or liquidation shall, upon the request of the Pledgee, be (1) deposited into an
account designated and supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured
Debts prior and in preference to make any other payment; or (2) to the extent not prohibited by the PRC laws,
unconditionally donated to the Pledgee or any other person designated by the Pledgee.
Article 3 Term of the Pledge
3.1
The Pledge shall become effective from the date that the Pledged Equity Interest under this Agreement has been
registered with the relevant administration for market regulation (“AMR”). The Pledge shall remain effective until (1)
all Contract Obligations have been fully performed and all Secured Debts has been fully paid, or (2) the Pledgee and/or
the designated person, subject to the PRC laws, decide to purchase the entire equity interests in Party C held by the
Pledgor in accordance with the Exclusive Option Agreement, and such equity interests of Party C has been transferred
to the Pledgee and/or the designated person in accordance with the laws, and the Pledgee and the designated person can
legally engage in the business of Party C. The Pledgor and Party C shall (i) register the Pledge in the shareholders’
register of Party C within 3 business days following the execution of this Agreement, and (ii) submit an application to
the relevant AMR for the registration of the Pledge under this Agreement within 30 business days following the
execution of this Agreement. The Parties covenant that for the purpose of registration of the Pledge, the parties hereto
and all other shareholders of Party C shall submit to AMR this Agreement or an equity pledge agreement in the form
required by the AMR at the location of Party C which shall truly reflect the information of the Pledge hereunder (the
“AMR Pledge Agreement”). For matters not specified in the AMR Pledge Agreement, the Parties shall be bound by
the provisions of this Agreement. The Pledgor and Party C shall submit all necessary documents and complete all
necessary procedures, as required by the relevant PRC laws and regulations and the competent AMR, to ensure that the
Pledge shall be registered with the AMR as soon as possible after submission for filing.
3.2
During the Term of the Pledge, in the event that the Pledgor and/or Party C fail to perform the Contract Obligations or
pay Secured Debts, the Pledgee shall have the right, but not the obligation, to exercise the Pledge in accordance with
the provisions of this Agreement.
Article 4 Custody of Pledge Certificates
4.1
During the Term of the Pledge set forth in this Agreement, the Pledgor shall deliver to the Pledgee for custody the
certificate of Pledgor’s capital contribution in Party C and the register of shareholders recording the Pledge within one
week from the execution of this Agreement. The Pledgee shall have custody of such documents during the entire Term
of the Pledge set forth in this Agreement.
Article 5 Representations and Warranties of the Pledgor and Party C
As of the execution date of this Agreement, the Pledgor and Party C hereby jointly and severally represent and warrant to the
Pledgee that:
5.1
5.2
5.3
5.4
5.5
The Pledgor is the sole legal and beneficial owner of the Pledged Equity Interest;
The Pledgee shall have the right to dispose of and transfer the Pledged Equity Interest in accordance with the
provisions set forth in this Agreement.
Except for the Pledge, the Pledgor has not placed any security interest or other encumbrance on the Pledged Equity
Interest.
The Pledgor and Party C have obtained approvals and consents from the government authorities and third parties (if
required) for the execution, delivery and performance of this Agreement.
The execution, delivery and performance of this Agreement will not: (i) violate any relevant PRC laws; (ii) conflict
with Party C’s articles of association or other constitutional documents; (iii) result in any breach of or constitute any
default under any contract or document to which it is a party or by which it is otherwise bound; (iv) result in any
violation of any condition for the grant and/or maintenance of any permit or approval granted to any Party; or (v) cause
any permit or approval granted to any Party to be suspended, cancelled or attached with additional conditions.
Article 6 Covenants of the Pledgor and Party C
6.1
During the term of this Agreement, the Pledgor and Party C hereby jointly and severally covenant to the Pledgee:
6.1.1
The Pledgor shall not transfer the Pledged Equity Interest, place or permit the existence of any security
interest or other encumbrance on the Pledged Equity Interest or any portion thereof, without the prior written
consent of the Pledgee, except for the performance of the Transaction Documents;
6.1.2
The Pledgor and Party C shall comply with and carry out all requirements under applicable laws and
regulations relating to pledge, and within five (5) days of receipt of any notice, order or recommendation
issued or made by the competent authorities regarding the Pledge, shall present the aforementioned notice,
order or recommendation to the Pledgee, and shall comply with the aforementioned notice, order or
recommendation or submit objections and representations with respect to the aforementioned matters upon the
Pledgee’s reasonable request or upon consent of the Pledgee;
6.1.3
Each of the Pledgor and Party C shall promptly notify the Pledgee of any event or notice received by it that
may have an impact on the Pledged Equity Interest (or any portion thereof) as well as any event or notice
received by it that may have an impact on any guarantees and obligations of the Pledgor under this Agreement
or the performance of obligations of the Pledgor under this Agreement;
6.1.4
Party C shall complete the registration procedures for the extension of the operation term within three (3)
months prior to the expiration of such term to maintain the validity of this Agreement.
6.2
6.3
The Pledgor agrees that the rights acquired by the Pledgee in accordance with this Agreement with respect to the
Pledge shall not be interrupted or harmed by the Pledgor or any successors, heirs or representatives of the Pledgor or
any other persons through any legal proceedings.
To protect or perfect the security interest granted by this Agreement for the Contract Obligations and Secured Debts,
the Pledgor hereby undertakes to execute in good faith and to cause other parties who have an interest in the Pledge to
execute all certificates, deeds and/or covenants required by the Pledgee. The Pledgor also undertakes to perform and to
cause other parties who have an interest in the Pledge to perform actions required by the Pledgee, to facilitate the
exercise by the Pledgee of its rights and authority granted thereto by this Agreement, and to enter into all relevant
documents regarding ownership of the Pledged Equity Interest with the Pledgee or designee(s) of the Pledgee (natural
persons/legal persons). The Pledgor undertakes to provide the Pledgee within a reasonable time with all notices, the
orders and decisions regarding the Pledge that are required by the Pledgee.
6.4
The Pledgor hereby undertakes to comply with and perform all guarantees, promises, agreements, representations and
conditions under this Agreement. In the event of failure or partial performance of its guarantees, promises, agreements,
representations and conditions, the Pledgor shall indemnify the Pledgee for all losses resulting therefrom.
Article 7 Event of Breach
7.1
The following circumstances shall be deemed an Event of Default:
7.1.1
The Pledgor’s any breach to any obligations under the Transaction Documents and/or this Agreement;
7.1.2
Party C’s any breach to any obligations under the Transaction Documents and/or this Agreement.
7.2
7.3
Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned
circumstances described in Article 7.1, the Pledgor and Party C shall immediately notify the Pledgee in writing
accordingly.
Unless an Event of Default set forth in Article 7.1 has been successfully resolved to the Pledgee’s satisfaction within
twenty (20) days after the Pledgee delivers a notice to the Pledgor and/or Party C requesting ratification of such Event
of Default, the Pledgee may issue a Notice of Default to the Pledgor in writing at any time thereafter, demanding to
immediately exercise the Pledge in accordance with the provisions of Article 8 of this Agreement.
Article 8 Exercise of the Pledge
8.1
8.2
The Pledgee shall issue a written Notice of Default to the Pledgor when it exercises the Pledge.
Subject to Article 7.3, the Pledgee may exercise the right to enforce the Pledge at any time after the issuance of the
Notice of Default in accordance with Article 8.1. The Pledgor shall cease to own any rights or interests related to the
Pledged Equity Interest once the Pledgee decides to exercise the right to enforce the Pledge.
8.3
8.4
8.5
8.6
8.7
After the Pledgee issues a Notice of Default to the Pledgor in accordance with Article 8.1, the Pledgee may exercise
any remedial measure under the applicable PRC laws, the Transaction Documents and this Agreement, including but
not limited to being paid in priority with the Pledged Equity Interest based on the monetary valuation that such Pledged
Equity Interest is converted into or from the proceeds from the auction or sale of the Pledged Equity Interest. The
Pledgee shall not be liable for any loss incurred by its duly exercise of such rights and powers.
The proceeds from the exercise of the Pledge by the Pledgee shall be used to pay for the taxes and expenses incurred as
a result of disposing the Pledged Equity Interest and to perform the Contract Obligations and pay the Secured Debts to
the Pledgee prior and in preference to any other payment. After the payment of the aforementioned amounts, the
remaining balance (if any) shall be returned to the Pledgor or any other persons who have rights to such balance under
relevant laws and regulations or be deposited to the local notary public office where the Pledgor resides, with all
expenses incurred being borne by the Pledgor. To the extent permitted by the applicable PRC laws, the Pledgor shall
unconditionally donate the aforementioned proceeds to the Pledgee or any other person designated by the Pledgee.
The Pledgee may exercise any remedy measure available to it simultaneously or in any order. The Pledgee may
exercise the priority right in compensation based on the monetary valuation that such Pledged Equity Interest is
converted into or with the proceeds from the auction or sale of the Pledged Equity Interest under this Agreement,
without being required to exercise any other remedy measure first.
The Pledgee is entitled to designate an attorney or other representatives to exercise the Pledge on its behalf, and the
Pledgor or Party C shall not raise any objection to such exercise.
When the Pledgee disposes of the Pledge in accordance with this Agreement, the Pledgor and Party C shall provide the
necessary assistance to enable the Pledgee to enforce the Pledge.
Article 9 Breach of Agreement
9.1
9.2
If the Pledgor or Party C materially breaches any provision under this Agreement, the Pledgee is entitled to terminate
this Agreement and/or require the Pledgor or Party C to compensate the losses. This Article shall not prejudice any
other rights of the Pledgee under this Agreement.
The Pledgor or Party C shall not have any right to terminate this Agreement unilaterally in any event unless otherwise
required by the applicable laws.
Article 10 Assignment
10.1 Without the Pledgee’s prior written consent, neither the Pledgor nor Party C shall grant or assign its/his rights and
obligations under this Agreement.
10.2
10.3
10.4
10.5
This Agreement shall be binding on the Pledgor and his/her successors and permitted assignees, and shall be valid with
respect to the Pledgee and each of its successors and assignees.
At any time, the Pledgee may assign any and all of its rights and obligations under the Transaction Documents and this
Agreement to its designee(s), in which case the assignees shall have the rights and obligations of the Pledgee under the
Transaction Documents and this Agreement, as if it were the original party to the Transaction Documents and this
Agreement.
In the event of change of the Pledgee due to assignment, the Pledgor and/or Party C shall, at the request of the Pledgee,
execute a new equity pledge agreement with the new pledgee on the same terms and conditions as this Agreement, and
register the same with the competent AMR.
The Pledgor and Party C shall strictly abide by the provisions of this Agreement and other contracts jointly or
separately executed by the Parties hereto or any of them, including the Transaction Documents, perform the obligations
hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability
thereof. Any remaining rights of the Pledgor with respect to the Pledged Equity Interest hereunder shall not be
exercised by the Pledgor except in accordance with the written instructions of the Pledgee.
Article 11 Termination
11.1
Upon the fulfillment of all Contract Obligations and the full payment of all Secured Debts by the Pledgor and Party C,
the Pledgee shall release the Pledge under this Agreement upon the Pledgor’s request as soon as reasonably practicable
and shall assist the Pledgor in de-registering the Pledge from the register of shareholders of Party C and with the
competent AMR.
11.2
The provisions under Articles 9, 13, 14 and 11.2 herein of this Agreement shall survive the expiration or termination of
this Agreement.
Article 12 Handling Fees and Other Expenses
All fees and actual expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax
and any other taxes and fees, shall be borne by Party C.
Article 13 Confidentiality
The Parties acknowledge and confirm that the existence and the content of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as
confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining
the written consent of the other Party, it shall not disclose any confidential information to any third party, except for the
information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is
under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the
court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees,
legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders,
directors, employees, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set
forth in this Article. Disclosure of any confidential information by the shareholders, director, employees of or agencies engaged
by any Party shall be deemed disclosure of such confidential information by such Party and such Party shall be held liable for
breach of this Agreement.
Article 14 Governing Law and Disputes Resolution
14.1
14.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the PRC laws.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in
the course of forming the tribunal, the Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of the Parties (namely Hefei,
China)) and places where the principal assets of either Party are located) for the grant of temporary reliefs.
14.3
During the arbitration, except for the matters under dispute and pending for arbitration, the Parties shall continue to
exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
Article 15 Notices
15.1
All notices and other communications required or given pursuant to this Agreement shall be delivered personally or
sent by registered mail, postage prepaid or by commercial courier service or facsimile transmission to the address of
such Party set forth below. Each such notice shall also be resent by email. The date on which such notices shall be
deemed to have been effectively served shall be determined as follows:
15.1.1 Notices given by personal delivery (including express mail service) shall be deemed effectively given on the
day when an acknowledgement of receipt thereof is signed;
15.1.2 Notices given by registered mail (postage prepaid) shall be deemed effectively given on the 15th day after the
date of the return receipt thereof.
15.1.3 Notices given by facsimile transmission shall be deemed effectively given on the date of transmission as
shown on the facsimile, provided that, if such facsimile is given after 5pm or on a non-business day at the
place of receipt, it shall be deemed given on the business day immediately following the transmission date
shown on such facsimile.
15.2
For the purpose of notices, the addresses of the Parties are as follows:
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd.
Address: NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Attn:
Juan Gan
Party B: Bin LI
Address: ********
Attn:
Bin LI
Party C: Anhui NIO AI Technology Co., Ltd.
Address: NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Attn:
Juan Gan
15.3
Any party may at any time change its address for receiving notices by a notice delivered to the other party in
accordance with the terms hereof.
Article 16 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect
in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement
shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of
the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those
invalid, illegal or unenforceable provisions.
Article 17 Attachments
The attachments set forth herein shall be an integral part of this Agreement.
Article 18 Effectiveness
18.1
This Agreement shall become effective upon execution by the Parties.
18.2
Any amendment, supplement and change to this Agreement shall be made in writing by all of the Parties and take
effects after they are executed or stamped by all Parties hereunder and governmental registration procedures (if
necessary) are completed.
Article 19 Counterparts
This Agreement is written in Chinese in four copies. The Pledgor, the Pledgee and Party C shall hold one copy respectively and
the other copy shall be used for registration.
(The remainder of this page is intentionally left blank; signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Pledge Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title: Legal Representative
Party B: Bin Li
By:
/s/ Bin Li
Party C: Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title: Legal Representative
Exhibits:
1. Register of Shareholders of Party C;
2. Capital Contribution Certificate of Party C;
3. Exclusive Business Cooperation Agreement;
4. Exclusive Option Agreement;
5. Loan Agreement;
6. Power of Attorney
Equity Pledge Agreement
This Equity Pledge Agreement (this “Agreement”) is made and entered into by and between the following parties on November 30,
2022 in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong
Special Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (hereinafter the “Pledgee”)
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B: Lihong Qin (hereinafter the “Pledgor”)
Address: ********
Party C: Anhui NIO AI Technology Co., Ltd.
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
In this Agreement, each of the Pledgee, the Pledgor and Party C shall be hereinafter referred to as a “Party” respectively, and as the
“Parties” collectively.
Whereas,
(1)
(2)
(3)
The Pledgor is a citizen of China with ID card No********, who as of the date hereof holds 2.24% of the equity interests of
Party C, representing RMB 224,000 in the registered capital of Party C. Party C is a limited liability company registered in
Hefei, China, and engaged in research and development of new-energy vehicle related technology. Party C hereby
acknowledges the respective rights and obligations of the Pledgor and the Pledgee under this Agreement, and intends to
provide any necessary assistance in registering the Pledge;
The Pledgee is a foreign-invested enterprise registered in China. The Pledgee and Party C have executed an Exclusive
Business Cooperation Agreement (as defined below); Party C, the Pledgee and the Pledgor have executed an Exclusive Option
Agreement (as defined below); the Pledgee and the Pledgor have executed a Loan Agreement (as defined below); and the
Pledgor has executed a Power of Attorney (as defined below) in favor of the Pledgee;
To ensure that Party C and the Pledgor fully perform their obligations under the Exclusive Business Cooperation Agreement,
the Exclusive Option Agreement, the Load Agreement and the Power of Attorney, the Pledgor hereby pledges to the Pledgee
all of the equity interests that the Pledgor holds in Party C as security for the performance by Party C and the Pledgor of their
obligations under the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Loan Agreement and
the Power of Attorney.
To perform the provisions of the Transaction Documents (as defined below), the Parties have mutually agreed to execute this Agreement
upon the following terms.
Article 1 Definitions
Unless otherwise provided in this Agreement, the terms below shall have the following meanings:
1.1
1.2
Pledge: shall refer to the security interest granted by the Pledgor to the Pledgee pursuant to Article 2 of this Agreement,
which means the right of the Pledgee to be paid in priority with the Pledged Equity Interest based on the monetary
valuation that such Pledged Equity Interest is converted into or from the proceeds from the auction or sale of the
Pledged Equity Interest pledged by the Pledgor to the Pledgee.
Pledged Equity Interest: shall refer to 2.24% equity interests in Party C currently held by the Pledgor, representing
RMB 224,000 in the registered capital of Party C, and all of the equity interests hereafter held by the Pledgor in Party
C.
1.3
Term of the Pledge: shall refer to the term set forth in Article 3 of this Agreement.
1.4
1.5
1.6
1.7
1.8
Transaction Documents: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party
C and the Pledgee on November 30, 2022, (the “Exclusive Business Cooperation Agreement”), the Loan Agreement
executed by and between the Pledgee and the Pledgor on November 30, 2022, (the “Loan Agreement”), the Exclusive
Option Agreement executed by and among Party C, the Pledgee and the Pledgor on November 30, 2022, (the
“Exclusive Option Agreement”), the Power of Attorney executed on November 30, 2022 by the Pledgor (the “Power
of Attorney”) and any modification, amendment and/or restatement to the aforementioned documents.
Contract Obligations: shall refer to all the obligations of the Pledgor under the Exclusive Option Agreement, the Loan
Agreement, the Power of Attorney and this Agreement; all the obligations of Party C under the Exclusive Business
Cooperation Agreement, the Exclusive Option Agreement and this Agreement.
Secured Debts: shall refer to all the direct, indirect and derivative losses and losses of anticipated profits, suffered by
the Pledgee, incurred as a result of any Event of Default on the part of the Pledgor and/or Party C. The amount of such
losses shall be calculated based on such factors as the reasonable business plan and profit forecast of the Pledgee, the
service fees payable by Party C under the Exclusive Business Cooperation Agreement, the amount of loans repayable
by the Pledgor under the Loan Agreement and all expenses occurred by the Pledgee in connection with enforcement of
the Pledgor’s and/or Party C’s Contract Obligations. The guaranteed amount is RMB 224,000.
Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.
Notice of Default: shall refer to the notice issued by the Pledgee in accordance with this Agreement declaring an Event
of Default.
Article 2 Pledge
2.1
2.2
2.3
2.4
The Pledgor hereby agrees to pledge all the Pledged Equity Interest as security for performance of the Contract
Obligations and payment of the Secured Debts under this Agreement. Party C hereby agrees that the Pledgor pledges
the Pledged Equity Interest to the Pledgee pursuant to this Agreement.
During the Term of the Pledge, the Pledgee is entitled to receive dividends distributed on the Pledged Equity Interest.
Without the prior written consent of the Pledgee, the Pledgor shall not receive dividends distributed on the Pledged
Equity Interest. Dividends received by the Pledgor on the Pledged Equity Interest after the deduction of individual
income tax paid by the Pledgor shall be, as required by the Pledgee, (1) deposited into an account designated and
supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured Debts prior and in
preference to making any other payment; or (2) to the extent not prohibited by the applicable PRC laws,
unconditionally donated to the Pledgee or any other person designated by the Pledgee.
The Pledgor may subscribe for a capital increase in Party C only with prior written consent of the Pledgee. Any
additional equity interest obtained by the Pledgor as a result of the Pledgor’s subscription of the increased registered
capital of Party C shall also be deemed as Pledged Equity Interest, and the Parties shall enter into further equity pledge
agreement for this purpose and complete registration of the pledge of such additional equity interest.
In the event that Party C is required by the PRC law to be liquidated or dissolved, any interest distributed to the
Pledgor upon Party C’s dissolution or liquidation shall, upon the request of the Pledgee, be (1) deposited into an
account designated and supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured
Debts prior and in preference to make any other payment; or (2) to the extent not prohibited by the PRC laws,
unconditionally donated to the Pledgee or any other person designated by the Pledgee.
Article 3 Term of the Pledge
3.1
The Pledge shall become effective from the date that the Pledged Equity Interest under this Agreement has been
registered with the relevant administration for market regulation (“AMR”). The Pledge shall remain effective until (1)
all Contract Obligations have been fully performed and all Secured Debts has been fully paid, or (2) the Pledgee and/or
the designated person shall, subject to the PRC laws, decide to purchase the entire equity interests of Party C held by
the Pledgor in accordance with the Exclusive Option Agreement, and such equity interests of Party C has been
transferred to the Pledgee and/or the designated person in accordance with the laws, and the Pledgee and the designated
person can legally engage in the business of Party C. The Pledgor and Party C shall (i) register the Pledge in the
shareholders’ register of Party C within 3 business days following the execution of this Agreement, and (ii) submit an
application to the relevant AMR for the registration of the Pledge under this Agreement within 30 business days
following the execution of this Agreement. The Parties covenant that for the purpose of registration of the Pledge, the
parties hereto and all other shareholders of Party C shall submit to AMR this Agreement or an equity pledge agreement
in the form required by the AMR at the location of Party C which shall truly reflect the information of the Pledge
hereunder (the “AMR Pledge Agreement”). For matters not specified in the AMR Pledge Agreement, the Parties shall
be bound by the provisions of this Agreement. The Pledgor and Party C shall submit all necessary documents and
complete all necessary procedures, as required by the relevant PRC laws and regulations and the competent AMR, to
ensure that the Pledge shall be registered with the AMR as soon as possible after submission for filing.
3.2
During the Term of the Pledge, in the event that the Pledgor and/or Party C fail to perform the Contract Obligations or
pay Secured Debts, the Pledgee shall have the right, but not the obligation, to exercise the Pledge in accordance with
the provisions of this Agreement.
Article 4 Custody of Pledge Certificates
4.1
During the Term of the Pledge set forth in this Agreement, the Pledgor shall deliver to the Pledgee for custody the
certificate of Pledgor’s capital contribution in Party C and the register of shareholders recording the Pledge within one
week from the execution of this Agreement. The Pledgee shall have custody of such documents during the entire Term
of the Pledge set forth in this Agreement.
Article 5 Representations and Warranties of the Pledgor and Party C
As of the execution date of this Agreement, the Pledgor and Party C hereby jointly and severally represent and warrant to the
Pledgee that:
5.1
5.2
5.3
5.4
5.5
The Pledgor is the sole legal and beneficial owner of the Pledged Equity Interest;
The Pledgee shall have the right to dispose of and transfer the Pledged Equity Interest in accordance with the
provisions set forth in this Agreement.
Except for the Pledge, the Pledgor has not placed any security interest or other encumbrance on the Pledged Equity
Interest.
The Pledgor and Party C have obtained approvals and consents from the government authorities and third parties (if
required) for the execution, delivery and performance of this Agreement.
The execution, delivery and performance of this Agreement will not: (i) violate any relevant PRC laws; (ii) conflict
with Party C’s articles of association or other constitutional documents; (iii) result in any breach of or constitute any
default under any contract or document to which it is a party or by which it is otherwise bound; (iv) result in any
violation of any condition for the grant and/or maintenance of any permit or approval granted to any Party; or (v) cause
any permit or approval granted to any Party to be suspended, cancelled or attached with additional conditions.
Article 6 Covenants of the Pledgor and Party C
6.1
During the term of this Agreement, the Pledgor and Party C hereby jointly and severally covenant to the Pledgee:
6.1.1
6.1.2
The Pledgor shall not transfer the Pledged Equity Interest, place or permit the existence of any security
interest or other encumbrance on the Pledged Equity Interest or any portion thereof, without the prior written
consent of the Pledgee, except for the performance of the Transaction Documents;
The Pledgor and Party C shall comply with and carry out all requirements under applicable laws and
regulations relating to pledge, and within five (5) days of receipt of any notice, order or recommendation
issued or made by the competent authorities regarding the Pledge, shall present the aforementioned notice,
order or recommendation to the Pledgee, and shall comply with the aforementioned notice, order or
recommendation or submit objections and representations with respect to the aforementioned matters upon the
Pledgee’s reasonable request or upon consent of the Pledgee;
6.1.3
Each of the Pledgor and Party C shall promptly notify the Pledgee of any event or notice received by it that
may have an impact on the Pledged Equity Interest (or any portion thereof) as well as any event or notice
received by it that may have an impact on any guarantees and obligations of the Pledgor under this Agreement
or the performance of obligations of the Pledgor under this Agreement;
6.1.4
Party C shall complete the registration procedures for the extension of the operation term within three (3)
months prior to the expiration of such term to maintain the validity of this Agreement.
6.2
6.3
The Pledgor agrees that the rights acquired by the Pledgee in accordance with this Agreement with respect to the
Pledge shall not be interrupted or harmed by the Pledgor or any successors, heirs or representatives of the Pledgor or
any other persons through any legal proceedings.
To protect or perfect the security interest granted by this Agreement for the Contract Obligations and Secured Debts,
the Pledgor hereby undertakes to execute in good faith and to cause other parties who have an interest in the Pledge to
execute all certificates, deeds and/or covenants required by the Pledgee. The Pledgor also undertakes to perform and to
cause other parties who have an interest in the Pledge to perform actions required by the Pledgee, to facilitate the
exercise by the Pledgee of its rights and authority granted thereto by this Agreement, and to enter into all relevant
documents regarding ownership of the Pledged Equity Interest with the Pledgee or designee(s) of the Pledgee (natural
persons/legal persons). The Pledgor undertakes to provide the Pledgee within a reasonable time with all notices, the
orders and decisions regarding the Pledge that are required by the Pledgee.
6.4
The Pledgor hereby undertakes to comply with and perform all guarantees, promises, agreements, representations and
conditions under this Agreement. In the event of failure or partial performance of its guarantees, promises, agreements,
representations and conditions, the Pledgor shall indemnify the Pledgee for all losses resulting therefrom.
Article 7 Event of Breach
7.1
The following circumstances shall be deemed an Event of Default:
7.1.1
The Pledgor’s any breach to any obligations under the Transaction Documents and/or this Agreement;
7.1.2
Party C’s any breach to any obligations under the Transaction Documents and/or this Agreement.
7.2
7.3
Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned
circumstances described in Article 7.1, the Pledgor and Party C shall immediately notify the Pledgee in writing
accordingly.
Unless an Event of Default set forth in Article 7.1 has been successfully resolved to the Pledgee’s satisfaction within
twenty (20) days after the Pledgee delivers a notice to the Pledgor and/or Party C requesting ratification of such Event
of Default, the Pledgee may issue a Notice of Default to the Pledgor in writing at any time thereafter, demanding to
immediately exercise the Pledge in accordance with the provisions of Article 8 of this Agreement.
Article 8 Exercise of the Pledge
8.1
8.2
8.3
8.4
8.5
8.6
8.7
The Pledgee shall issue a written Notice of Default to the Pledgor when it exercises the Pledge.
Subject to Article 7.3, the Pledgee may exercise the right to enforce the Pledge at any time after the issuance of the
Notice of Default in accordance with Article 8.1. The Pledgor shall cease to own any rights or interests related to the
Pledged Equity Interest once the Pledgee decides to exercise the right to enforce the Pledge.
After the Pledgee issues a Notice of Default to the Pledgor in accordance with Article 8.1, the Pledgee may exercise
any remedial measure under the applicable PRC laws, the Transaction Documents and this Agreement, including but
not limited to being paid in priority with the Pledged Equity Interest based on the monetary valuation that such Pledged
Equity Interest is converted into or from the proceeds from the auction or sale of the Pledged Equity Interest. The
Pledgee shall not be liable for any loss incurred by its duly exercise of such rights and powers.
The proceeds from the exercise of the Pledge by the Pledgee shall be used to pay for the taxes and expenses incurred as
a result of disposing the Pledged Equity Interest and to perform the Contract Obligations and pay the Secured Debts to
the Pledgee prior and in preference to any other payment. After the payment of the aforementioned amounts, the
remaining balance (if any) shall be returned to the Pledgor or any other person who have rights to such balance under
relevant laws and regulations or be deposited to the local notary public office where the Pledgor resides, with all
expenses incurred being borne by the Pledgor. To the extent permitted by the applicable PRC laws, the Pledgor shall
unconditionally donate the aforementioned proceeds to the Pledgee or any other person designated by the Pledgee.
The Pledgee may exercise any remedy measure available to it simultaneously or in any order. The Pledgee may
exercise the priority right in compensation based on the monetary valuation that such Pledged Equity Interest is
converted into or with the proceeds from the auction or sale of the Pledged Equity Interest under this Agreement,
without being required to exercise any other remedy measure first.
The Pledgee is entitled to designate an attorney or other representatives to exercise the Pledge on its behalf, and the
Pledgor or Party C shall not raise any objection to such exercise.
When the Pledgee disposes of the Pledge in accordance with this Agreement, the Pledgor and Party C shall provide the
necessary assistance to enable the Pledgee to enforce the Pledge.
Article 9 Breach of Agreement
9.1
9.2
If the Pledgor or Party C materially breaches any provision under this Agreement, the Pledgee is entitled to terminate
this Agreement and/or require the Pledgor or Party C to compensate the losses. This Article shall not prejudice any
other rights of the Pledgee under this Agreement.
The Pledgor or Party C shall not have any right to terminate this Agreement unilaterally in any event unless otherwise
required by the applicable laws.
Article 10 Assignment
10.1 Without the Pledgee’s prior written consent, neither the Pledgor nor Party C shall grant or assign its/his rights and
obligations under this Agreement.
10.2
10.3
This Agreement shall be binding on the Pledgor and his/her successors and permitted assignees, and shall be valid with
respect to the Pledgee and each of its successors and assignees.
At any time, the Pledgee may assign any and all of its rights and obligations under the Transaction Documents and this
Agreement to its designee(s), in which case the assignees shall have the rights and obligations of the Pledgee under the
Transaction Documents and this Agreement, as if it were the original party to the Transaction Documents and this
Agreement.
10.4
10.5
In the event of change of the Pledgee due to assignment, the Pledgor and/or Party C shall, at the request of the Pledgee,
execute a new equity pledge agreement with the new pledgee on the same terms and conditions as this Agreement, and
register the same with the competent AMR.
The Pledgor and Party C shall strictly abide by the provisions of this Agreement and other contracts jointly or
separately executed by the Parties hereto or any of them, including the Transaction Documents, perform the obligations
hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability
thereof. Any remaining rights of the Pledgor with respect to the Pledged Equity Interest hereunder shall not be
exercised by the Pledgor except in accordance with the written instructions of the Pledgee.
Article 11 Termination
11.1
Upon the fulfillment of all Contract Obligations and the full payment of all Secured Debts by the Pledgor and Party C,
the Pledgee shall release the Pledge under this Agreement upon the Pledgor’s request as soon as reasonably practicable
and shall assist the Pledgor in de-registering the Pledge from the register of shareholders of Party C and with the
competent AMR.
11.2
The provisions under Articles 9, 13, 14 and 11.2 herein of this Agreement shall survive the expiration or termination of
this Agreement.
Article 12 Handling Fees and Other Expenses
All fees and actual expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax
and any other taxes and fees, shall be borne by Party C.
Article 13 Confidentiality
The Parties acknowledge and confirm that the existence and the content of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as
confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining
the written consent of the other Party, it shall not disclose any confidential information to any third party, except for the
information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is
under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the
court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees,
legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders,
directors, employees, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set
forth in this Article. Disclosure of any confidential information by the shareholders, director, employees of or agencies engaged
by any Party shall be deemed disclosure of such confidential information by such Party and such Party shall be held liable for
breach of this Agreement.
Article 14 Governing Law and Disputes Resolution
14.1
14.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the PRC laws.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in
the course of forming the tribunal, the Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of the Parties (namely Hefei,
China)) and places where the principal assets of either Party are located) for the grant of temporary reliefs.
14.3
During the arbitration, except for the matters under dispute and pending for arbitration, the Parties shall continue to
exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
Article 15 Notices
15.1
All notices and other communications required or given pursuant to this Agreement shall be delivered personally or
sent by registered mail, postage prepaid or by commercial courier service or facsimile transmission to the address of
such Party set forth below. Each such notice shall also be resent by email. The date on which such notices shall be
deemed to have been effectively served shall be determined as follows:
15.1.1 Notices given by personal delivery (including express mail service) shall be deemed effectively given on the
day when an acknowledgement of receipt thereof is signed;
15.1.2 Notices given by registered mail (postage prepaid) shall be deemed effectively given on the 15th day after the
date of the return receipt thereof.
15.1.3 Notices given by facsimile transmission shall be deemed effectively given on the date of transmission as
shown on the facsimile, provided that, if such facsimile is given after 5pm or on a non-business day at the
place of receipt, it shall be deemed given on the business day immediately following the transmission date
shown on such facsimile.
15.2
For the purpose of notices, the addresses of the Parties are as follows:
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd.
Address: NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Attn:
Juan Gan
Party B: Lihong Qin
Address: ********
Attn:
Lihong Qin
Party C: Anhui NIO AI Technology Co., Ltd.
Address: NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Attn:
Juan Gan
15.3
Any party may at any time change its address for receiving notices by a notice delivered to the other party in
accordance with the terms hereof.
Article 16 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect
in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement
shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of
the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those
invalid, illegal or unenforceable provisions.
Article 17 Attachments
The attachments set forth herein shall be an integral part of this Agreement.
Article 18 Effectiveness
18.1
This Agreement shall become effective upon execution by the Parties.
18.2
Any amendment, supplement and change to this Agreement shall be made in writing by all of the Parties and take
effects after they are executed or stamped by all Parties hereunder and governmental registration procedures (if
necessary) are completed.
Article 19 Counterparts
This Agreement is written in Chinese in four copies. The Pledgor, the Pledgee and Party C shall hold one copy respectively and
the other copy shall be used for registration.
(The remainder of this page is intentionally left blank; signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Pledge Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title: Legal Representative
Party B: Lihong Qin
By:
/s/ Lihong Qin
Party C: Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title: Legal Representative
Exhibits:
1. Register of Shareholders of Party C;
2. Capital Contribution Certificate of Party C;
3. Exclusive Business Cooperation Agreement;
4. Exclusive Option Agreement;
5. Loan Agreement;
6. Power of Attorney
Equity Pledge Agreement
This Equity Pledge Agreement (this “Agreement”) is made and entered into by and between the following parties on November 30,
2022 in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong
Special Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (hereinafter the “Pledgee”)
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B: Shaoqing Ren (hereinafter the “Pledgor”)
Address: ********
Party C: Anhui NIO AI Technology Co., Ltd.
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
In this Agreement, each of the Pledgee, the Pledgor and Party C shall be hereinafter referred to as a “Party” respectively, and as the
“Parties” collectively.
Whereas,
(1)
(2)
(3)
The Pledgor is a citizen of China with ID card No********, who as of the date hereof holds 17.76% of the equity interests of
Party C, representing RMB 1,776,000 in the registered capital of Party C. Party C is a limited liability company registered in
Hefei, China, and engaged in research and development of new-energy vehicle related technology. Party C hereby
acknowledges the respective rights and obligations of the Pledgor and the Pledgee under this Agreement, and intends to provide
any necessary assistance in registering the Pledge;
The Pledgee is a foreign-invested enterprise registered in China. The Pledgee and Party C have executed an Exclusive Business
Cooperation Agreement (as defined below); Party C, the Pledgee and the Pledgor have executed an Exclusive Option
Agreement (as defined below); the Pledgee and the Pledgor have executed a Loan Agreement (as defined below); and the
Pledgor has executed a Power of Attorney (as defined below) in favor of the Pledgee;
To ensure that Party C and the Pledgor fully perform their obligations under the Exclusive Business Cooperation Agreement, the
Exclusive Option Agreement, the Load Agreement and the Power of Attorney, the Pledgor hereby pledges to the Pledgee all of
the equity interests that the Pledgor holds in Party C as security for the performance by Party C and the Pledgor of their
obligations under the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Loan Agreement and
the Power of Attorney.
To perform the provisions of the Transaction Documents (as defined below), the Parties have mutually agreed to execute this Agreement
upon the following terms.
Article 1 Definitions
Unless otherwise provided in this Agreement, the terms below shall have the following meanings:
1.1
1.2
Pledge: shall refer to the security interest granted by the Pledgor to the Pledgee pursuant to Article 2 of this Agreement,
which means the right of the Pledgee to be paid in priority with the Pledged Equity Interest based on the monetary
valuation that such Pledged Equity Interest is converted into or from the proceeds from the auction or sale of the
Pledged Equity Interest pledged by the Pledgor to the Pledgee.
Pledged Equity Interest: shall refer to 17.76% equity interests in Party C currently held by the Pledgor, representing
RMB 1,776,000 in the registered capital of Party C, and all of the equity interest hereafter held by the Pledgor in Party
C.
1.3
Term of the Pledge: shall refer to the term set forth in Article 3 of this Agreement.
1.4
1.5
1.6
1.7
1.8
Transaction Documents: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party
C and the Pledgee on November 30, 2022, (the “Exclusive Business Cooperation Agreement”), the Loan Agreement
executed by and between the Pledgee and the Pledgor on November 30, 2022, (the “Loan Agreement”), the Exclusive
Option Agreement executed by and among Party C, the Pledgee and the Pledgor on November 30, 2022, (the
“Exclusive Option Agreement”), the Power of Attorney executed on November 30, 2022 by the Pledgor (the “Power
of Attorney”) and any modification, amendment and/or restatement to the aforementioned documents.
Contract Obligations: shall refer to all the obligations of the Pledgor under the Exclusive Option Agreement, the Loan
Agreement, the Power of Attorney and this Agreement; all the obligations of Party C under the Exclusive Business
Cooperation Agreement, the Exclusive Option Agreement and this Agreement.
Secured Debts: shall refer to all the direct, indirect and derivative losses and losses of anticipated profits, suffered by
the Pledgee, incurred as a result of any Event of Default on the part of the Pledgor and/or Party C. The amount of such
losses shall be calculated based on such factors as the reasonable business plan and profit forecast of the Pledgee, the
service fees payable by Party C under the Exclusive Business Cooperation Agreement, the amount of loans repayable
by the Pledgor under the Loan Agreement and all expenses occurred by the Pledgee in connection with enforcement of
the Pledgor’s and/or Party C’s Contract Obligations. The guaranteed amount is RMB 1,776,000.
Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.
Notice of Default: shall refer to the notice issued by the Pledgee in accordance with this Agreement declaring an Event
of Default.
Article 2 Pledge
2.1
2.2
2.3
2.4
The Pledgor hereby agrees to pledge all the Pledged Equity Interest as security for performance of the Contract
Obligations and payment of the Secured Debts under this Agreement. Party C hereby agrees that the Pledgor pledges
the Pledged Equity Interest to the Pledgee pursuant to this Agreement.
During the Term of the Pledge, the Pledgee is entitled to receive dividends distributed on the Pledged Equity Interest.
Without the prior written consent of the Pledgee, the Pledgor shall not receive dividends distributed on the Pledged
Equity Interest. Dividends received by the Pledgor on the Pledged Equity Interest after the deduction of individual
income tax paid by the Pledgor shall be, as required by the Pledgee, (1) deposited into an account designated and
supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured Debts prior and in
preference to making any other payment; or (2) to the extent not prohibited by the applicable PRC laws,
unconditionally donated to the Pledgee or any other person designated by the Pledgee.
The Pledgor may subscribe for a capital increase in Party C only with prior written consent of the Pledgee. Any
additional equity interest obtained by the Pledgor as a result of the Pledgor’s subscription of the increased registered
capital of Party C shall also be deemed as Pledged Equity Interest, and the Parties shall enter into further equity pledge
agreement for this purpose and complete registration of the pledge of such additional equity interest.
In the event that Party C is required by the PRC law to be liquidated or dissolved, any interest distributed to the
Pledgor upon Party C’s dissolution or liquidation shall, upon the request of the Pledgee, be (1) deposited into an
account designated and supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured
Debts prior and in preference to make any other payment; or (2) to the extent not prohibited by the PRC laws,
unconditionally donated to the Pledgee or any other person designated by the Pledgee.
Article 3 Term of the Pledge
3.1
The Pledge shall become effective from the date that the Pledged Equity Interest under this Agreement has been
registered with the relevant administration for market regulation (“AMR”). The Pledge shall remain effective until (1)
all Contract Obligations have been fully performed and all Secured Debts has been fully paid, or (2) the Pledgee and/or
the designated person shall, subject to the PRC laws, decide to purchase the entire equity interests of Party C held by
the Pledgor in accordance with the Exclusive Option Agreement, and such equity interests of Party C has been
transferred to the Pledgee and/or the designated person in accordance with the laws, and the Pledgee and the designated
person can legally engage in the business of Party C. The Pledgor and Party C shall (i) register the Pledge in the
shareholders’ register of Party C within 3 business days following the execution of this Agreement, and (II) submit an
application to the relevant AMR for the registration of the Pledge under this Agreement within 30 business days
following the execution of this Agreement. The Parties covenant that for the purpose of registration of the Pledge, the
parties hereto and all other shareholders of Party C shall submit to AMR this Agreement or an equity pledge agreement
in the form required by the AMR at the location of Party C which shall truly reflect the information of the Pledge
hereunder (the “AMR Pledge Agreement”). For matters not specified in the AMR Pledge Agreement, the Parties shall
be bound by the provisions of this Agreement. The Pledgor and Party C shall submit all necessary documents and
complete all necessary procedures, as required by the relevant PRC laws and regulations and the competent AMR, to
ensure that the Pledge shall be registered with the AMR as soon as possible after submission for filing.
3.2
During the Term of the Pledge, in the event that the Pledgor and/or Party C fails to perform the Contract Obligations or
pay Secured Debts, the Pledgee shall have the right, but not the obligation, to exercise the Pledge in accordance with
the provisions of this Agreement.
Article 4 Custody of Pledge Certificates
4.1
During the Term of the Pledge set forth in this Agreement, the Pledgor shall deliver to the Pledgee for custody the
certificate of Pledgor’s capital contribution in Party C and the register of shareholders recording the Pledge within one
week from the execution of this Agreement. The Pledgee shall have custody of such documents during the entire Term
of the Pledge set forth in this Agreement.
Article 5 Representations and Warranties of the Pledgor and Party C
As of the execution date of this Agreement, the Pledgor and Party C hereby jointly and severally represent and warrant to the
Pledgee that:
5.1
5.2
5.3
5.4
5.5
The Pledgor is the sole legal and beneficial owner of the Pledged Equity Interest;
The Pledgee shall have the right to dispose of and transfer the Pledged Equity Interest in accordance with the
provisions set forth in this Agreement.
Except for the Pledge, the Pledgor has not placed any security interest or other encumbrance on the Pledged Equity
Interest.
The Pledgor and Party C have obtained approvals and consents from the government authorities and third parties (if
required) for the execution, delivery and performance of this Agreement.
The execution, delivery and performance of this Agreement will not: (i) violate any relevant PRC laws; (ii) conflict
with Party C’s articles of association or other constitutional documents; (iii) result in any breach of or constitute any
default under any contract or document to which it is a party or by which it is otherwise bound; (iv) result in any
violation of any condition for the grant and/or maintenance of any permit or approval granted to any Party; or (v) cause
any permit or approval granted to any Party to be suspended, cancelled or attached with additional conditions.
Article 6 Covenants of the Pledgor and Party C
6.1
During the term of this Agreement, the Pledgor and Party C hereby jointly and severally covenant to the Pledgee:
6.1.1
The Pledgor shall not transfer the Pledged Equity Interest, place or permit the existence of any security
interest or other encumbrance on the Pledged Equity Interest or any portion thereof, without the prior written
consent of the Pledgee, except for the performance of the Transaction Documents;
6.1.2
The Pledgor and Party C shall comply with and carry out all requirements under applicable laws and
regulations relating to pledge, and within five (5) days of receipt of any notice, order or recommendation
issued or made by the competent authorities regarding the Pledge, shall present the aforementioned notice,
order or recommendation to the Pledgee, and shall comply with the aforementioned notice, order or
recommendation or submit objections and representations with respect to the aforementioned matters upon the
Pledgee’s reasonable request or upon consent of the Pledgee;
6.1.3
Each of the Pledgor and Party C shall promptly notify the Pledgee of any event or notice received by it that
may have an impact on the Pledged Equity Interest (or any portion thereof) as well as any event or notice
received by it that may have an impact on any guarantees and obligations of the Pledgor under this Agreement
or the performance of obligations of the Pledgor under this Agreement;
6.1.4
Party C shall complete the registration procedures for the extension of the operation term within three (3)
months prior to the expiration of such term to maintain the validity of this Agreement.
6.2
6.3
The Pledgor agrees that the rights acquired by the Pledgee in accordance with this Agreement with respect to the
Pledge shall not be interrupted or harmed by the Pledgor or any successors, heirs or representatives of the Pledgor or
any other persons through any legal proceedings.
To protect or perfect the security interest granted by this Agreement for the Contract Obligations and Secured Debts,
the Pledgor hereby undertakes to execute in good faith and to cause other parties who have an interest in the Pledge to
execute all certificates, deeds and/or covenants required by the Pledgee. The Pledgor also undertakes to perform and to
cause other parties who have an interest in the Pledge to perform actions required by the Pledgee, to facilitate the
exercise by the Pledgee of its rights and authority granted thereto by this Agreement, and to enter into all relevant
documents regarding ownership of Equity Interest with the Pledgee or designee(s) of the Pledgee (natural persons/legal
persons). The Pledgor undertakes to provide the Pledgee within a reasonable time with all notices, the orders and
decisions regarding the Pledge that are required by the Pledgee.
6.4
The Pledgor hereby undertakes to comply with and perform all guarantees, promises, agreements, representations and
conditions under this Agreement. In the event of failure or partial performance of its guarantees, promises, agreements,
representations and conditions, the Pledgor shall indemnify the Pledgee for all losses resulting therefrom.
Article 7 Event of Breach
7.1
The following circumstances shall be deemed an Event of Default:
7.1.1
The Pledgor’s any breach to any obligations under the Transaction Documents and/or this Agreement;
7.1.2
Party C’s any breach to any obligations under the Transaction Documents and/or this Agreement.
7.2
7.3
Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned
circumstances described in Article 7.1, the Pledgor and Party C shall immediately notify the Pledgee in writing
accordingly.
Unless an Event of Default set forth in Article 7.1 has been successfully resolved to the Pledgee’s satisfaction within
twenty (20) days after the Pledgee delivers a notice to the Pledgor and/or Party C requesting ratification of such Event
of Default, the Pledgee may issue a Notice of Default to the Pledgor in writing at any time thereafter, demanding to
immediately exercise the Pledge in accordance with the provisions of Article 8 of this Agreement.
Article 8 Exercise of the Pledge
8.1
8.2
The Pledgee shall issue a written Notice of Default to the Pledgor when it exercises the Pledge.
Subject to Article 7.3, the Pledgee may exercise the right to enforce the Pledge at any time after the issuance of the
Notice of Default in accordance with Article 8.1. The Pledgor shall cease to own any rights or interests related to the
Pledged Equity Interest once the Pledgee decides to exercise the right to enforce the Pledge.
8.3
8.4
8.5
8.6
8.7
After the Pledgee issues a Notice of Default to the Pledgor in accordance with Article 8.1, the Pledgee may exercise
any remedial measure under the applicable PRC laws, the Transaction Documents and this Agreement, including but
not limited to being paid in priority with the Pledged Equity Interest based on the monetary valuation that such Pledged
Equity Interest is converted into or from the proceeds from the auction or sale of the Pledged Equity Interest. The
Pledgee shall not be liable for any loss incurred by its duly exercise of such rights and powers.
The proceeds from the exercise of the Pledge by the Pledgee shall be used to pay for the taxes and expenses incurred as
a result of disposing the Pledged Equity Interest and to perform the Contract Obligations and pay the Secured Debts to
the Pledgee prior and in preference to any other payment. After the payment of the aforementioned amounts, the
remaining balance (if any) shall be returned to the Pledgor or any other person who have rights to such balance under
relevant laws and regulations or be deposited to the local notary public office where the Pledgor resides, with all
expenses incurred being borne by the Pledgor. To the extent permitted by the applicable PRC laws, the Pledgor shall
unconditionally donate the aforementioned proceeds to the Pledgee or any other person designated by the Pledgee.
The Pledgee may exercise any remedy measure available to it simultaneously or in any order. The Pledgee may
exercise the priority right in compensation based on the monetary valuation that such Pledged Equity Interest is
converted into or with the proceeds from the auction or sale of the Pledged Equity Interest under this Agreement,
without being required to exercise any other remedy measure first.
The Pledgee is entitled to designate an attorney or other representatives to exercise the Pledge on its behalf, and the
Pledgor or Party C shall not raise any objection to such exercise.
When the Pledgee disposes of the Pledge in accordance with this Agreement, the Pledgor and Party C shall provide the
necessary assistance to enable the Pledgee to enforce the Pledge.
Article 9 Breach of Agreement
9.1
9.2
If the Pledgor or Party C materially breaches any provision under this Agreement, the Pledgee is entitled to terminate
this Agreement and/or require the Pledgor or Party C to compensate the losses. This Article shall not prejudice any
other rights of the Pledgee under this Agreement.
The Pledgor or Party C shall not have any right to terminate this Agreement unilaterally in any event unless otherwise
required by the applicable laws.
Article 10 Assignment
10.1 Without the Pledgee’s prior written consent, neither the Pledgor nor Party C shall grant or assign its/his rights and
obligations under this Agreement.
10.2
10.3
10.4
10.5
This Agreement shall be binding on the Pledgor and his/her successors and permitted assignees, and shall be valid with
respect to the Pledgee and each of its successors and assignees.
At any time, the Pledgee may assign any and all of its rights and obligations under the Transaction Documents and this
Agreement to its designee(s), in which case the assignees shall have the rights and obligations of the Pledgee under the
Transaction Documents and this Agreement, as if it were the original party to the Transaction Documents and this
Agreement.
In the event of change of the Pledgee due to assignment, the Pledgor and/or Party C shall, at the request of the Pledgee,
execute a new equity pledge agreement with the new pledgee on the same terms and conditions as this Agreement, and
register the same with the competent AMR.
The Pledgor and Party C shall strictly abide by the provisions of this Agreement and other contracts jointly or
separately executed by the Parties hereto or any of them, including the Transaction Documents, perform the obligations
hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability
thereof. Any remaining rights of the Pledgor with respect to the Pledged Equity Interest hereunder shall not be
exercised by the Pledgor except in accordance with the written instructions of the Pledgee.
Article 11 Termination
11.1
Upon the fulfillment of all Contract Obligations and the full payment of all Secured Debts by the Pledgor and Party C,
the Pledgee shall release the Pledge under this Agreement upon the Pledgor’s request as soon as reasonably practicable
and shall assist the Pledgor in de-registering the Pledge from the register of shareholders of Party C and with the
competent AMR.
11.2
The provisions under Articles 9, 13, 14 and 11.2 herein of this Agreement shall survive the expiration or termination of
this Agreement.
Article 12 Handling Fees and Other Expenses
All fees and actual expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax
and any other taxes and fees, shall be borne by Party C.
Article 13 Confidentiality
The Parties acknowledge and confirm that the existence and the content of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as
confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining
the written consent of the other Party, it shall not disclose any confidential information to any third party, except for the
information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is
under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the
court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees,
legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders,
directors, employees, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set
forth in this Article. Disclosure of any confidential information by the shareholders, director, employees of or agencies engaged
by any Party shall be deemed disclosure of such confidential information by such Party and such Party shall be held liable for
breach of this Agreement.
Article 14 Governing Law and Disputes Resolution
14.1
14.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the PRC laws.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in
the course of forming the tribunal, the Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of the Parties (namely Hefei,
China)) and places where the principal assets of either Party are located) for the grant of temporary reliefs.
14.3
During the arbitration, except for the matters under dispute and pending for arbitration, the Parties shall continue to
exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
Article 15 Notices
15.1
All notices and other communications required or given pursuant to this Agreement shall be delivered personally or
sent by registered mail, postage prepaid or by commercial courier service or facsimile transmission to the address of
such Party set forth below. Each such notice shall also be resent by email. The date on which such notices shall be
deemed to have been effectively served shall be determined as follows:
15.1.1 Notices given by personal delivery (including express mail service) shall be deemed effectively given on the
day when an acknowledgement of receipt thereof is signed;
15.1.2 Notices given by registered mail (postage prepaid) shall be deemed effectively given on the 15th day after the
date of the return receipt thereof.
15.1.3 Notices given by facsimile transmission shall be deemed effectively given on the date of transmission as
shown on the facsimile, provided that, if such facsimile is given after 5pm or on a non-business day at the
place of receipt, it shall be deemed given on the business day immediately following the transmission date
shown on such facsimile.
15.2
For the purpose of notices, the addresses of the Parties are as follows:
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd.
Address: NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Attn:
Juan Gan
Shaoqing Ren
Party B:
Address: ********
Attn:
Shaoqing Ren
Party C: Anhui NIO AI Technology Co., Ltd.
Address: NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Attn:
Juan Gan
15.3
Any party may at any time change its address for receiving notices by a notice delivered to the other party in
accordance with the terms hereof.
Article 16 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect
in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement
shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of
the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those
invalid, illegal or unenforceable provisions.
Article 17 Attachments
The attachments set forth herein shall be an integral part of this Agreement.
Article 18 Effectiveness
18.1
This Agreement shall become effective upon execution by the Parties.
18.2
Any amendment, supplement and change to this Agreement shall be made in writing by all of the Parties and take
effects after they are executed or stamped by all Parties hereunder and governmental registration procedures (if
necessary) are completed.
Article 19 Counterparts
This Agreement is written in Chinese in four copies. The Pledgor, the Pledgee and Party C shall hold one copy respectively and
the other copy shall be used for registration.
(The remainder of this page is intentionally left blank; signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Pledge Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title: Legal Representative
Party B: Shaoqing Ren
By:
/s/ Shaoqing Ren
Party C: Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title: Legal Representative
Exhibits:
1. Register of Shareholders of Party C;
2. Capital Contribution Certificate of Party C;
3. Exclusive Business Cooperation Agreement;
4. Exclusive Option Agreement;
5. Loan Agreement;
6. Power of Attorney
Exclusive Business Cooperation Agreement
Exhibit 4.51
This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on
November 30, 2022, in Shanghai, the People’s Republic of China (the “PRC”, for the purpose of this Agreement, excluding Hong Kong
Special Administrative Region, Macao Special Administrative Region and Taiwan Region of the PRC).
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd.
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B: Anhui NIO AI Technology Co., Ltd.
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
(Each of Party A and Party B shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.)
Whereas,
(1) Party A is a foreign-invested enterprise established in China with the capability, experience and resources to provide investment and
management consulting services, as well as technology development, technical services and consultation in relation to new energy
automobile;
(2) Party B is a domestic company established in the PRC and is engaged in research and development of new-energy vehicle related
technology. The businesses conducted by Party B currently and at any time during the term of this Agreement are collectively
referred to as the “Principal Business”;
(3) Party A is willing to provide Party B with technical support, consultation and other related services on an exclusive basis in relation
to the Principal Business during the term of this Agreement, utilizing its advantages in technology, personnel and information, and
Party B is willing to accept such services provided by Party A or Party A’s designee(s), each pursuant to the terms set forth herein.
Now, therefore, through mutual discussion, the Parties have reached the following agreements:
Article 1 Service Provision
1.1 Party B hereby appoints Party A and its affiliates as Party B’s exclusive services providers to provide Party B with comprehensive
technical support, consulting services and other related services during the term of this Agreement, in accordance with the terms
and conditions of this Agreement, including but not limited to the following services:
(1)
(2)
(3)
(4)
(5)
Licensing Party B to use the relevant software legally owned by Party A and its affiliates;
Development, maintenance and updating of the relevant application software necessary for Party B’s Principal Business;
Design, installation, daily management, maintenance and updating of computer network system, hardware equipment and
database;
Technical support and staff training for relevant employees of Party B;
Assisting Party B in consulting, collection and research of relevant technology and market information (excluding market
research business that foreign-invested enterprises are restricted from conducting under PRC laws);
(6)
(7)
(8)
(9)
Providing business management consultation for Party B;
Providing marketing and promotional services for Party B;
Developing and testing new products;
Leasing of equipment or properties; and
(10)
Other related services requested by Party B from time to time to the extent permitted under PRC laws.
1.2 Party B agree to accept all the services provided by Party A and its affiliates. Party B further agrees that unless with Party A’s prior
written consent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar services
provided by any third party and shall not establish any similar corporation relationship with any third party regarding the matters
contemplated by this Agreement. The Parties agree that Party A may designate other parties to provide Party B with the services
under this Agreement (the parties designated by Party A may enter into certain agreements described in Section 1.5 with Party B).
1.3 Party A is entitled to check Party B’s accounts periodically and at any time, and Party B shall keep its accounts accurately and in
due course, and provide the accounts to Party A upon its request. During the term of this agreement and without in violation of
applicable laws, Party B agrees to coordinate with Party A and Party A’s shareholders (directly or indirectly) over auditing
(including but not limited to related party transaction auditing and other various auditing contents) and provide related information
and materials about Party B’s and its subsidiaries’ operation, business, customers, finance and staffs to Party A, Party A’s
shareholders and/or auditor engaged by Party A, and also agrees that Party A’s shareholders can disclose such information and
materials to satisfy the requirements of the securities regulation.
1.4 In case of liquidation or dissolution of Party B for various reasons, Party B shall, within the scope permitted by PRC laws, appoint
the persons recommended by Party A to form a liquidation team, which takes charge of managing the property of Party B and its
subsidiaries. Party B acknowledges that in case of liquidation or dissolution of Party B, Party B agrees to deliver all the remaining
property obtained from the liquidation of Party B conducted according to PRC laws and regulations to Party A, no matter whether
the provisions specified in this agreement have been implemented.
1.5 Service Providing Method
1.5.1
1.5.2
1.5.3
Party A and Party B agree that during the term of this Agreement, where necessary, Party B may enter into further service
agreements with Party A and its affiliates or any other party designated by Party A, which shall provide the specific
contents, methods, personnel, and fees for the specific services.
To better fulfill this Agreement, Party A and Party B agree that during the term of this Agreement, where necessary, Party B
may enter into equipment or property lease agreements with Party A and its affiliates or any other party designated by
Party A at any time which shall permit Party A and its affiliates or any other party designated by Party A to provide Party
B with relevant equipment or property based on the business needs of Party B.
Party B hereby grants to Party A and its affiliates an irrevocable and exclusive option to purchase from Party B, at Party A
and its affiliates’ sole discretion, any or all of the assets and business of Party B, to the extent permitted under the PRC
laws, and at the lowest purchase price permitted by the PRC laws. Both Parties shall then enter into a separate assets or
business transfer agreement, specifying the terms and conditions of the transfer of the assets.
2
Article 2 Price and Payment Method of the Service
2.1 The service fee hereunder shall consist of 100% of the total consolidated profits of Party B in any fiscal year, setting off the
accumulated deficit (if any) of Party B and its subsidiaries in the previous fiscal year and net of the working capital, expenses, taxes
and other statutory contributions required in any fiscal year. Notwithstanding the foregoing, Party A and its affiliates may, at its sole
discretion, adjust the coverage and amount of the service fee in accordance with the tax regulations and tax practices of the PRC
and by reference to Party B’s needs for working capitals, and Party B shall accept such adjustment.
2.2 Party A and its affiliates will provide invoice and calculate the service fee on a monthly basis. Party B shall pay the service fees to
the bank account designated by Party A within ten (10) business days upon the receipt of the invoice, and send the copy of the
payment voucher to Party A and its affiliates by fax or email within ten (10) business days after the payment. Party A and its
affiliates shall issue receipt within ten (10) business days upon receipt of the service fees. Notwithstanding the foregoing, Party A
and its affiliates may, at its discretion, adjust the time and method for payment of the service fee. Party B shall accept such
adjustment.
2.3 The Parties agree that, during the term of this Agreement, Party A or its affiliates will bear all economic losses (if any) arising from
Party B’s business. In the event that Party B encounters operating losses or serious operational difficulties, Party A or its affiliates
may provide any form of financial support to Party B to the extent permitted by law at that time; furthermore, Party A shall have the
right to decide at its sole discretion on whether Party B shall continue to operate, and Party B shall unconditionally recognize and
agree to Party A’s decision.
Article 3 Intellectual Property Rights and Confidentiality Clauses
3.1 Party A shall have sole and exclusive ownership, rights and interests in any and all intellectual properties or intangible assets arising
out of or created or developed during the performance of this Agreement by both Parties, including but not limited to copyrights,
patents, patent applications, software, technical secrets, trade secrets and others (to the extent not prohibited by PRC laws). Unless
expressly authorized by Party A, Party B is not entitled to any rights or interests in any intellectual property rights of Party A and its
affiliates which are used by Party A and its affiliates in providing the services pursuant to this Agreement. Party B shall execute all
appropriate documents, take all appropriate actions, submit all filings and/or applications, render all appropriate assistance and
otherwise conduct whatever is necessary as deemed by Party A at its sole discretion, for the purposes of vesting the ownership, right
or interest of any such intellectual property rights and intangible assets in Party A and its affiliates, and/or perfecting the protections
of any such intellectual property rights and intangible assets for Party A and its affiliates (including but not limited to registering
such intellectual property rights and intangible assets under Party A or its affiliates’ name).
3.2 The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is
or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or
financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure
of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
3
4.1 Party A hereby represents, warrants and covenants as follows:
Article 4 Representations and Warranties
4.1.1
4.1.2
Party A is a foreign-invested enterprise legally established and validly existing in accordance with the PRC laws; Party A or
the service providers designated by Party A will obtain all government permits and licenses necessary for providing the
service under this Agreement before providing such services.
Party A has taken all necessary corporate actions, obtained all necessary authorizations as well as all consents and
approvals from third parties and government agencies (if required) for the execution, delivery and performance of this
Agreement; Party A’s execution, delivery and performance of this Agreement do not violate any explicit requirements
under any law or regulation.
4.1.3
This Agreement constitutes Party A’s legal, valid and binding obligations, enforceable against it in accordance with its
terms.
4.2 Party B hereby represents, warrants and covenants as follows:
4.2.1. Party B is a company legally established and validly existing in accordance with the PRC laws and has obtained and will
maintain all government permits and licenses necessary for engaging in the Principal Business.
4.2.2. Party B has taken all necessary corporate actions, obtained all necessary authorizations as well as all consents and approvals
from third parties and government agencies (if required) for the execution, delivery and performance of this Agreement.
Party B’s execution, delivery and performance of this Agreement do not violate any explicit requirements under any law or
regulation.
4.2.3. This Agreement constitutes Party B’s legal, valid and binding obligations, enforceable against it in accordance with its
terms.
Article 5 Term of Agreement
5.1 This Agreement shall become effective upon execution by the Parties. Unless terminated in accordance with the provisions of this
Agreement or terminated in writing by Party A, this Agreement shall remain effective permanently.
5.2 During the term of this Agreement, each Party shall timely renew its operation term prior to the expiration thereof, so as to enable
this Agreement to remain effective and enforceable. This Agreement shall be terminated upon the expiration of the operation term
of a Party if the application for the renewal of its operation term is not approved or agreed by the competent authorities.
5.3 The rights and obligations of the Parties under Article 3, 6, 7 and this Article 5.3 shall survive the termination of this Agreement.
Article 6 Governing Law and Disputes Resolution
6.1 The execution, effectiveness, interpretation, performance and the resolution of disputes hereunder shall be governed by and
construed in accordance with the PRC laws.
4
6.2 In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either Party is
entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration in Shanghai in
accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three arbitrators to be
appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one arbitrator, and the
third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai International
Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential manner.
The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal
or arbitrators may award compensation, injunctive relief in respect of both Parties’ equities, assets, property interest or land assets
(including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in the course of
forming the tribunal, both Parties shall have the right to file an application to any court with competent jurisdiction (including
courts in Hong Kong, Cayman Islands, places of incorporation of both Parties (namely Hefei China) and places where the principal
assets of either Party are located) for the grant of temporary reliefs.
6.3 During the arbitration, except for the matters under dispute and pending for arbitration, the Parties shall continue to exercise their
respective rights under this Agreement and perform their respective obligations under this Agreement.
Article 7 Breach of Agreement and Indemnification
7.1 If Party B materially breaches any provision under this Agreement, Party A is entitled to (1) terminate this Agreement and require
Party B to compensate all the losses; or (2) require specific performance of the obligations of Party B under this Agreement and
require Party B to compensate all the losses. This Article 7.1 shall not prejudice any other rights of Party A under this Agreement.
7.2 Unless otherwise required by the laws, Party B shall not unilaterally terminate this Agreement in any event.
7.3 Party B shall indemnify Party A and hold Party A harmless from any losses, damages, obligations or expenses caused by any
lawsuit, claims or other demands against Party A arising from or caused by the services provided by Party A to Party B pursuant
this Agreement, except where such losses, damages, obligations or expenses arise from the gross negligence or willful misconduct
of Party A.
Article 8 Force Majeure
8.1 In the case of any force majeure events (“Force Majeure”) such as earthquakes, typhoons, floods, fires, flu, wars, strikes or any
other events that cannot be predicted and are unpreventable and unavoidable by the affected Party, which causes the failure of either
Party to perform or completely perform this Agreement, the Party affected by such Force Majeure events shall not be liable for such
failure to perform or partial performance. However, the affected Party shall give the other Party written notices without any delay,
and shall provide details evidencing such Force Majeure events within 15 days after sending out such notice, explaining the reasons
for such failure to perform, partial or delay of performance.
8.2 If such Party claiming Force Majeure fails to notify the other Party and furnish it with proof pursuant to the above provision, such
Party shall not be excused from the non-performance of its obligations hereunder. The Party so affected by such Force Majeure
shall use reasonable efforts to minimize the consequences of such Force Majeure and to promptly resume performance hereunder
whenever the causes of such excuse are cured. Should the Party so affected by such Force Majeure fail to resume performance
hereunder when the causes of such excuse are cured, such Party shall be liable to the other Party.
5
8.3 In the event of Force Majeure, the Parties shall immediately consult with each other to find an equitable solution and shall use all
reasonable endeavors to minimize the consequences of such Force Majeure.
Article 9 Notices
9.1 All notices and other communications required or given pursuant to this Agreement shall be delivered personally or sent by
registered mail, postage prepaid or by commercial courier service or facsimile transmission to the address of such Party set forth
below. Each such notice shall also be resent by email. The dates on which such notices shall be deemed to have been effectively
served shall be determined as follows:
9.1.1
9.1.2
9.1.3
Notices given by personal delivery (including express mail service) shall be deemed effectively given on the day when an
acknowledgement of receipt thereof is signed.
Notices given by registered mail (postage prepaid) shall be deemed effectively given on the 15th day after the date of the
return receipt thereof.
Notices given by facsimile transmission shall be deemed effectively given on the date of transmission as shown on the
facsimile, provided that, if such facsimile is given after 5 p.m. or on a non-business day at the place of receipt, it shall be
deemed given on the business day immediately following the transmission date shown on such facsimile.
9.2 For the purpose of notices, the addresses of the Parties are as follows:
Party A:
Address:
Attn:
Party B:
Address:
Attn:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Juan Gan
Anhui NIO AI Technology Co., Ltd.
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Juan Gan
9.3 Any party may at any time change its address for receiving notices by a notice delivered to the other party in accordance with the
terms hereof.
Article 10 Assignment of Agreement
10.1 Without Party A’s prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.
10.2 Party B hereby agrees that Party A may assign its rights and obligations under this Agreement to any third party and in case of such
assignment, Party A is only required to give written notice to Party B and does not need any consent from Party B for such
assignment.
Article 11 Miscellaneous
11.1 In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect in
accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall
not be affected or compromised in any aspect. Both Parties shall negotiate in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of both
Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid,
illegal or unenforceable provisions.
6
11.2 Any amendment and supplement to this Agreement may be made in writing by both Parties. Any amendment agreement and
supplementary agreement duly executed by the Parties hereto with regard to this Agreement shall constitute an integral part of this
Agreement, and shall have equal legal validity as this Agreement.
11.3 This Agreement is written in two copies, each Party having one copy.
(Remainder of this page is intentionally left blank; signature page follows)
7
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation
Agreement as of the date first above written.
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/Lihong Qin
Lihong Qin
Legal Representative
Party B: Anhui NIO AI Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong Qin
Lihong Qin
Legal Representative
Exclusive Option Agreement
Exhibit 4.52
This Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of November 30, 2022, in
Shanghai, the People’s Republic of China (the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special Administrative
Region, Macao Special Administrative Region and Taiwan Region of the PRC):
Party A:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B:
Bin Li
Address:
********
Party C:
Anhui NIO AI Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
(Each of Party A, Party B and Party C shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.)
Whereas:
1. Party B is the shareholder of Party C and as of the date hereof hold 80% of the equity interests of Party C, representing RMB
8,000,000 in the registered capital of Party C.
2. Party A and Party B executed a Loan Agreement (“Loan Agreement”) on November 30, 2022, according to which Party A agreed
to provide to Party B a loan in the amount of RMB 8,000,000 for the purpose of Party B’s contribution to Party C.
Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:
1. Sale and Purchase of Equity Interest
1.1 Option Granted
Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons
(each, a “Designee”) to purchase the equity interests in Party C then held by Party B once or at multiple times at any time in
part or in whole at Party A’s sole and absolute discretion to the extent permitted by PRC laws and at the price described in
Section 1.3 herein (such right being the “Equity Purchase Option”). Except for Party A and the Designee(s), no other person
shall be entitled to the Equity Purchase Option or other rights with respect to the equity interests of Party B. Party C hereby
agrees to the grant by Party B of the Equity Purchase Option to Party A. The term “person” as used herein shall refer to
individuals, companies, joint ventures, partnerships, enterprises, trusts or non-corporate organizations.
1.2 Steps for Exercise of the Equity Purchase Option
Subject to the provisions of PRC laws and regulations, Party A may exercise the Equity Purchase Option by issuing a written
notice to Party B (the “Equity Purchase Notice”), specifying:(a) Party A or the Designee’s decision to exercise the Equity
Purchase Option; (b) the portion of equity interests to be purchased by Party A or the Designee from Party B (the “Purchased
Equity”); and (c) the date for purchasing the Purchased Equity or the date for the transfer of the Purchased Equity. Upon
receipt of the Equity Purchase Notice, Party B shall transfer all the Purchased Equity to Party A and/or the Designee as set
forth in Article 1.4 hereof.
1.3 Purchase Price
The total price for the purchase by Party A of all equity interests in Party C held by Party B upon exercise of the Equity
Purchase Option by Party A shall be RMB 8,000,000; if Party A exercises the Equity Purchase Option to purchase part of the
equity interests held by Party B in Party C, then the purchase price shall be calculated on a pro rata basis. If at the time when
Party A exercises the Equity Purchase Option, the minimum price permitted under PRC laws is higher than the aforementioned
price, then the purchase price shall be such minimum price permitted by PRC laws (collectively, the “Purchase Price”).
1.4 Transfer of Purchased Equity
For each exercise of the Equity Purchase Option by Party A:
1.4.1
1.4.2
1.4.3
1.4.4
Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted
approving Party B’s transfer of the Purchased Equity to Party A and/or the Designee(s);
Party B shall obtain written statements from the other shareholders of Party C giving consent to the transfer of the
Purchased Equity by Party B to Party A and/or the Designee(s) and waiving any right of first refusal with respect
thereto;
Party B shall execute an equity interest transfer contract with respect to each transfer with Party A and/or each
Designee (whichever is applicable), in accordance with the provisions of this Agreement and the Equity Purchase
Notice regarding the Purchased Equity, in the form and substance satisfactory to Party A and/or the Designee(s);
Party B shall, within thirty (30) days after receipt of the Equity Purchase Notice, execute all necessary contracts,
agreements or documents with relevant parties, obtain all necessary government approvals and permits, and take all
necessary actions, so as to transfer valid ownership of the Purchased Equity to Party A and/or the Designee(s),
unencumbered by any Security Interests, and cause Party A and/or the Designee(s) to become the registered owner(s)
of the Purchased Equity. For the purpose of this Section and this Agreement, “Security Interests” shall include
securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first refusal, right to
offset, ownership retention or other security arrangements, but, for the avoidance of doubt, shall be deemed to exclude
any security interest created by this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of Attorney;
“Party B’s Equity Pledge Agreement” as used in this Agreement shall refer to the Equity Pledge Agreement
executed by and among Party A, Party B and Party C on the date hereof and any modification, amendment and
restatement thereto.; “Party B’s Power of Attorney” as used in this Agreement shall refer to the Power of Attorney
executed by Party B on the date hereof granting Party A with a power of attorney and any modification, amendment
and restatement thereto.
1.5 Payment
The Parties have agreed in the Loan Agreement that any proceeds obtained by Party B through the transfer of its equity
interests in Party C shall be used for repayment of the loan provided by Party A (and any interest thereon) in accordance with
the Loan Agreement. Accordingly, upon exercise of the Equity Purchase Option, Party A may make the payment of the
Purchase Price by way of offset of the outstanding debts owed by Party B to Party A (including without limitation the
outstanding amount of the loan owed by Party B to Party A and any interest thereon) (such debts, the “Offset Debts”), in
which case Party A shall not be required to pay any additional purchase price to Party B, unless the Purchase Price set forth
herein is required to be adjusted in accordance with PRC laws. If PRC laws impose mandatory requirements on the Purchase
Price agreed under this Agreement, such that the minimum Purchase Price permitted under PRC laws exceeds the price already
offset by the Offset Debts, Party B hereby waives its right to receive the amount of price that exceeds the amount offset by the
Offset Debts.
2. Covenants
2.1 Covenants regarding Party C
Party B (as a shareholder of Party C) and Party C hereby covenant as follows:
2.1.1 Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the
constitutional documents of Party C, increase or decrease its registered capital, or change its structure of registered
capital in other manners;
2.1.2
They shall maintain Party C’s corporate existence in accordance with good financial and business standards and
practices, obtain and maintain all necessary government licenses and permits required for Party C’s business, and
prudently and effectively operate its business and handle its affairs;
2.1.3 Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer,
mortgage or dispose of in any manner any material assets of Party C or legal or beneficial interest in the material
business or revenues of Party C, or allow the encumbrance thereon of any Security Interest;
2.1.4 Without the prior written consent of Party A, they shall not incur, inherit, guarantee or assume any debt, except for
debts incurred in the ordinary course of business other than payables incurred by loans;
2.1.5
They shall always operate all of Party C’s businesses within the ordinary course of business to maintain the asset value
of Party C and refrain from any action/omission that may adversely affect Party C’s operating status and asset value;
2.1.6 Without the prior written consent of Party A, they shall not cause Party C to execute any material contract, except the
contracts in the ordinary course of business;
2.1.7 Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or
credit;
2.1.8
2.1.9
They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s
request;
If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an
insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate similar
businesses;
2.1.10 Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire
or invest in any person;
2.1.11 They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to Party C’s assets, business or revenue;
2.1.12 To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents,
take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary or
appropriate defenses against all claims;
2.1.13 Without the prior written consent of Party A, Party C shall not in any manner distribute dividends to its shareholders,
provided that upon Party A’s request, Party C shall immediately distribute all distributable profits to its shareholders;
2.1.14 At the request of Party A, they shall appoint any person designated by Party A as the director or senior management of
Party C.
2.1.15 Without Party A’s prior written consent, they shall not engage in any business in competition with Party A or its
affiliates;
2.1.16 Unless otherwise mandatorily required by PRC laws, Party C shall not be dissolved or liquated without prior written
consent by Party A;
2.1.17 Once PRC laws permit foreign investors to invest in the principal business of Party C in the PRC, with a controlling
stake and/or in the form of wholly foreign-owned enterprise, and the competent PRC government authorities begin to
approve such investments, upon Party A’s exercise of the Equity Purchase Option, Party B shall immediately transfer
to Party A or the Designee(s) the equity interests in Party C held by Party B, and Party C shall cooperate with the
equity transfer procedures; and
2.1.18 With respect to the covenants applicable to Party C under this Article 2.1, Party B and Party C shall cause Party C’s
subsidiaries to abide by such covenants where applicable, as if such subsidiaries were Party C under the corresponding
paragraphs.
2.2 Covenants of Party B
Party B hereby covenants as follows:
2.2.1 Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other
manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance
thereon of any Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge Agreement
and Party B’s Power of Attorney;
2.2.2 Without the prior written consent of Party A, Party B shall ensure the shareholders’ meeting and/or the directors (or
the executive director) of Party C not to approve any sale, transfer, mortgage or disposition in any other manner of any
legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any
Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge Agreement and Party B’s
Power of Attorney;
2.2.3 Without the prior written consent of Party A, Party B shall cause the shareholders’ meeting or the directors (or the
executive director) of Party C not to approve the merger or consolidation with any person, or the acquisition of or
investment in any person;
2.2.4
Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the equity interests in Party C held by Party B;
2.2.5
2.2.6
Party B shall ensure the shareholders’ meeting or the directors (or the executive director) of Party C to vote in favor of
the transfer of the Purchased Equity as set forth in this Agreement and to take any and all other actions that may be
requested by Party A;
To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary
or appropriate defenses against all claims;
2.2.7
Party B shall appoint any designee of Party A as the director or the senior management of Party C, at the request of
Party A;
2.2.8 With respect to the transfer of equity interests of Party C by any other shareholders of Party C to Party A, Party B
hereby waives all of its right of first refusal (if any); Party B gives consent to the execution by each other shareholder
of Party C with Party A and Party C of the exclusive option agreement, the Equity Pledge Agreement and the power of
attorney similar to this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of Attorney, and
undertakes not to take any action in conflict with such documents executed by such other shareholders (if any);
2.2.9
If Party B received any profit distribution, interest, dividend or proceeds of liquidation from Party C, Party B shall
promptly donate all such profit distribution, interest, dividend or proceeds of liquidation to Party A or any other
person designated by Party A in the manner permitted by the applicable PRC laws; and
2.2.10 Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by
and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any
action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any
remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Party B’s Equity
Pledge Agreement or under the Party B’s Power of Attorney, Party B shall not exercise such rights except in
accordance with the written instructions of Party A.
3. Representations and Warranties
Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of
the transfer of the Purchased Equity, that:
3.1 They have the power, capacity and authority to execute and deliver this Agreement and any equity transfer contract to which
they are parties concerning each transfer of the Purchased Equity as described thereunder (each, a “Transfer Contract”), and
to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer
Contracts substantially consistent with the terms of this Agreement upon Party A’s exercise of the Equity Purchase Option. This
Agreement and the Transfer Contracts to which they are parties, once executed, constitute or will constitute their legal, valid
and binding obligations and shall be enforceable against them in accordance with the provisions thereof;
3.2 Party B and Party C have obtained any and all approvals and consents from the third parties and competent government
authorities (if required) for the execution, delivery and performance of this Agreement;
3.3 The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any
Transfer Contracts shall not: (i) cause any violation of any applicable PRC laws; (ii) be inconsistent with the articles of
association or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they
are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party
or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any
licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions
to any licenses or permits issued to either of them;
3.4 Party B has good and marketable title to the equity interests held by it in Party C. Except for Party B’s Equity Pledge
Agreement and Party B’s Power of Attorney, Party B has not placed any Security Interest on such equity interests;
3.5 Party C has good and marketable title to all of its assets, and has not placed any Security Interest on the aforementioned assets;
3.6 Party C does not have any outstanding debts, except for (i) debt incurred during the ordinary course of business; and (ii) debts
disclosed to Party A for which Party A’s written consent has been obtained;
3.7 Party C will comply with all laws and regulations applicable to asset acquisition; and
3.8 There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party
C, assets of Party C or Party C.
4. Term
This Agreement shall become effective upon execution by the Parties, and remain effective until all equity interests held by Party B
in Party C have been transferred or assigned to Party A and/or any other person designated by Party A in accordance with this
Agreement.
5. Governing Law and Disputes Resolution
5.1 Governing Law
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the resolution of
disputes hereunder shall be governed by PRC laws.
5.2 Methods of Disputes Resolution
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either Party
is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration in
Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint
one arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by
Shanghai International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in
Chinese in a confidential manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate
circumstances, the arbitration tribunal or arbitrators may award compensation, injunctive relief in respect of all the Parties’
equities, assets, property interest or land assets (including restriction on conduct of business, restriction or prohibition of
transfer or sale of equities or assets), or propose the winding-up of the Parties in accordance with the dispute resolution clause
and/or applicable PRC laws. In addition, in the course of forming the tribunal, both Parties shall have the right to file an
application to any court with competent jurisdiction (including courts in Hong Kong, Cayman Islands, places of incorporation
of all the Parties (namely Hefei, China) and places where the principal assets of either Party are located) for the grant of
temporary reliefs. During the arbitration, except for the matters under dispute and pending for arbitration, all the Parties shall
continue to exercise their respective rights under this Agreement and perform their respective obligations under this
Agreement.
6. Taxes and Fees
Each Party shall pay any and all transfer and registration taxes, expenses and fees incurred thereby or levied thereon in accordance
with PRC laws in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the
consummation of the transactions contemplated under this Agreement and the Transfer Contracts.
7. Notices
7.1 All notices and other communications required to be given pursuant to this Agreement or otherwise given in connection with
this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, a commercial courier service,
facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be sent by email. The dates
on which notices shall be deemed to have been effectively given shall be determined as follows:
7.1.1
7.1.2
7.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date of
signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the date on
the registered letter receipt;
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 o’clock p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the date
indicated on the fax transmission record.
7.2 For the purpose of notice, the addresses of the Parties are as follows:
Party A:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Address: Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Attn:
Juan Gan
Party B:
Bin LI
Address:
********
Attn:
Bin Li
Anhui NIO AI Technology Co., Ltd.
Party C:
Address: Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Attn:
Juan Gan
7.3 Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of this
Section.
8. Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent
of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is or will be
in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed
pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or
(c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial advisors regarding
the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or financial advisors
shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any confidential information
by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure of such confidential
information by such Party and such Party shall be held liable for breach of this Agreement.
9. Further Warranties
The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the
provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the
implementation of the provisions and purposes of this Agreement.
10. Breach of Agreement
10.1 If Party B or Party C commits any material breach of any term of this Agreement, Party A shall have right to terminate this
Agreement and/or require Party B or Party C to indemnify all damages. This Article 10 shall not prejudice any other rights of
Party A hereunder.
10.2 Unless otherwise provided for by laws, Party B and Party C shall in no case be entitled to terminate or cancel this Agreement.
11. Miscellaneous
11.1 Amendments, changes and supplements
Any amendment, change or supplement to this Agreement shall be made in a written agreement signed by each Party.
11.2 Entire agreement
Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this Agreement
shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter hereof, and
shall supersede all prior oral and written consultations, representations and contracts reached with respect to the subject matter
of this Agreement.
11.3 Headings
The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the
meanings of the provisions of this Agreement.
11.4 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect
in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid,
illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the
intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic
effect of those invalid, illegal or unenforceable provisions.
11.5 Successors
This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the Parties.
11.6 Survival
11.6.1 Any obligations that occurred or that are due in connection with this Agreement before the expiration or early
termination of this Agreement shall survive the expiration or early termination thereof.
11.6.2 The provisions of Sections 5, 8, 10 and this Section 11.6 shall survive the termination of this Agreement.
11.7 Waivers
Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and
shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other
Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.
11.8 Language and Counterpart
This Agreement is written in Chinese in three copies, each Party having one copy.
[Remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong Qin
Lihong Qin
Legal Representative
Party B: Bin Li
By:
/s/ Bin Li
Party C: Anhui NIO AI Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong Qin
Lihong Qin
Legal Representative
Exclusive Option Agreement
This Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of November 30, 2022, in
Shanghai, the People’s Republic of China (the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special Administrative
Region, Macao Special Administrative Region and Taiwan Region of the PRC):
Party A:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B:
Lihong Qin
Address:
********
Party C:
Anhui NIO AI Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
(Each of Party A, Party B and Party C shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.)
Whereas:
1. Party B is the shareholder of Party C and as of the date hereof hold 2.24% of the equity interests of Party C, representing RMB
224,000 in the registered capital of Party C.
2. Party A and Party B executed a Loan Agreement (“Loan Agreement”) on November 30, 2022, according to which Party A agreed
to provide to Party B a loan in the amount of RMB 224,000 for the purpose of Party B’s contribution to Party C.
Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:
1. Sale and Purchase of Equity Interest
1.1 Option Granted
Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons
(each, a “Designee”) to purchase the equity interests in Party C then held by Party B once or at multiple times at any time in
part or in whole at Party A’s sole and absolute discretion to the extent permitted by PRC laws and at the price described in
Section 1.3 herein (such right being the “Equity Purchase Option”). Except for Party A and the Designee(s), no other person
shall be entitled to the Equity Purchase Option or other rights with respect to the equity interests of Party B. Party C hereby
agrees to the grant by Party B of the Equity Purchase Option to Party A. The term “person” as used herein shall refer to
individuals, companies, joint ventures, partnerships, enterprises, trusts or non-corporate organizations.
1.2 Steps for Exercise of the Equity Purchase Option
Subject to the provisions of PRC laws and regulations, Party A may exercise the Equity Purchase Option by issuing a written
notice to Party B (the “Equity Purchase Notice”), specifying:(a) Party A or the Designee’s decision to exercise the Equity
Purchase Option; (b) the portion of equity interests to be purchased by Party A or the Designee from Party B (the “Purchased
Equity”); and (c) the date for purchasing the Purchased Equity or the date for the transfer of the Purchased Equity. Upon
receipt of the Equity Purchase Notice, Party B shall transfer all the Purchased Equity to Party A and/or the Designee as set
forth in Article 1.4 hereof.
1.3 Purchase Price
The total price for the purchase by Party A of all equity interests in Party C held by Party B upon exercise of the Equity
Purchase Option by Party A shall be RMB 224,000; if Party A exercises the Equity Purchase Option to purchase part of the
equity interests held by Party B in Party C, then the purchase price shall be calculated on a pro rata basis. If at the time when
Party A exercises the Equity Purchase Option, the minimum price permitted under PRC laws is higher than the aforementioned
price, then the purchase price shall be such minimum price permitted by PRC laws (collectively, the “Purchase Price”).
1.4 Transfer of Purchased Equity
For each exercise of the Equity Purchase Option by Party A:
1.4.1
1.4.2
1.4.3
1.4.4
Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted
approving Party B’s transfer of the Purchased Equity to Party A and/or the Designee(s);
Party B shall obtain written statements from the other shareholders of Party C giving consent to the transfer of the
Purchased Equity by Party B to Party A and/or the Designee(s) and waiving any right of first refusal with respect
thereto;
Party B shall execute an equity interest transfer contract with respect to each transfer with Party A and/or each
Designee (whichever is applicable), in accordance with the provisions of this Agreement and the Equity Purchase
Notice regarding the Purchased Equity, in the form and substance satisfactory to Party A and/or the Designee(s);
Party B shall, within thirty (30) days after receipt of the Equity Purchase Notice, execute all necessary contracts,
agreements or documents with relevant parties, obtain all necessary government approvals and permits, and take all
necessary actions, so as to transfer valid ownership of the Purchased Equity to Party A and/or the Designee(s),
unencumbered by any Security Interests, and cause Party A and/or the Designee(s) to become the registered owner(s)
of the Purchased Equity. For the purpose of this Section and this Agreement, “Security Interests” shall include
securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first refusal, right to
offset, ownership retention or other security arrangements, but shall be deemed to exclude any security interest created
by this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of Attorney; “Party B’s Equity Pledge
Agreement” as used in this Agreement shall refer to the Equity Pledge Agreement executed by and among Party A,
Party B and Party C on the date hereof and any modification, amendment and restatement thereto.; “Party B’s Power
of Attorney” as used in this Agreement shall refer to the Power of Attorney executed by Party B on the date hereof
granting Party A with a power of attorney and any modification, amendment and restatement thereto.
1.5 Payment
The Parties have agreed in the Loan Agreement that any proceeds obtained by Party B through the transfer of its equity
interests in Party C shall be used for repayment of the loan provided by Party A (and any interest thereon) in accordance with
the Loan Agreement. Accordingly, upon exercise of the Equity Purchase Option, Party A may make the payment of the
Purchase Price by way of offset of the outstanding debts owed by Party B to Party A (including without limitation the
outstanding amount of the loan owed by Party B to Party A and any interest thereon) (such debts, the “Offset Debts”), in
which case Party A shall not be required to pay any additional purchase price to Party B, unless the Purchase Price set forth
herein is required to be adjusted in accordance with PRC laws. If PRC laws impose mandatory requirements on the Purchase
Price agreed under this Agreement, such that the minimum Purchase Price permitted under PRC laws exceeds the price already
offset by the Offset Debts, Party B hereby waives its right to receive the amount of price that exceeds the amount offset by the
Offset Debts.
2. Covenants
2.1 Covenants regarding Party C
Party B (as a shareholder of Party C) and Party C hereby covenant as follows:
2.1.1 Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the
constitutional documents of Party C, increase or decrease its registered capital, or change its structure of registered
capital in other manners;
2.1.2
They shall maintain Party C’s corporate existence in accordance with good financial and business standards and
practices, obtain and maintain all necessary government licenses and permits required for Party C’s business, and
prudently and effectively operate its business and handle its affairs;
2.1.3 Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer,
mortgage or dispose of in any manner any material assets of Party C or legal or beneficial interest in the material
business or revenues of Party C, or allow the encumbrance thereon of any Security Interest;
2.1.4 Without the prior written consent of Party A, they shall not incur, inherit, guarantee or assume any debt, except for
debts incurred in the ordinary course of business other than payables incurred by loans;
2.1.5
They shall always operate all of Party C’s businesses within the ordinary course of business to maintain the asset value
of Party C and refrain from any action/omission that may adversely affect Party C’s operating status and asset value;
2.1.6 Without the prior written consent of Party A, they shall not cause Party C to execute any material contract, except the
contracts in the ordinary course of business;
2.1.7 Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or
credit;
2.1.8
2.1.9
They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s
request;
If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an
insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate similar
businesses;
2.1.10 Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire
or invest in any person;
2.1.11 They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to Party C’s assets, business or revenue;
2.1.12 To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents,
take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary or
appropriate defenses against all claims;
2.1.13 Without the prior written consent of Party A, Party C shall not in any manner distribute dividends to its shareholders,
provided that upon Party A’s request, Party C shall immediately distribute all distributable profits to its shareholders;
2.1.14 At the request of Party A, they shall appoint any person designated by Party A as the director or senior management of
Party C.
2.1.15 Without Party A’s prior written consent, they shall not engage in any business in competition with Party A or its
affiliates;
2.1.16 Unless otherwise mandatorily required by PRC laws, Party C shall not be dissolved or liquated without prior written
consent by Party A;
2.1.17 Once PRC laws permit foreign investors to invest in the principal business of Party C in the PRC, with a controlling
stake and/or in the form of wholly foreign-owned enterprise, and the competent PRC government authorities begin to
approve such investments, upon Party A’s exercise of the Equity Purchase Option, Party B shall immediately transfer
to Party A or the Designee(s) the equity interests in Party C held by Party B, and Party C shall cooperate with the
equity transfer procedures; and
2.1.18 With respect to the covenants applicable to Party C under this Article 2.1, Party B and Party C shall cause Party C’s
subsidiaries to abide by such covenants where applicable, as if such subsidiaries were Party C under the corresponding
paragraphs.
2.2 Covenants of Party B
Party B hereby covenants as follows:
2.2.1 Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other
manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance
thereon of any Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge Agreement
and Party B’s Power of Attorney;
2.2.2 Without the prior written consent of Party A, Party B shall ensure the shareholders’ meeting and/or the directors (or
the executive director) of Party C not to approve any sale, transfer, mortgage or disposition in any other manner of any
legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any
Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge Agreement and Party B’s
Power of Attorney;
2.2.3 Without the prior written consent of Party A, Party B shall cause the shareholders’ meeting or the directors (or the
executive director) of Party C not to approve the merger or consolidation with any person, or the acquisition of or
investment in any person;
2.2.4
Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the equity interests in Party C held by Party B;
2.2.5
2.2.6
Party B shall ensure the shareholders’ meeting or the directors (or the executive director) of Party C to vote in favor of
the transfer of the Purchased Equity as set forth in this Agreement and to take any and all other actions that may be
requested by Party A;
To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary
or appropriate defenses against all claims;
2.2.7
Party B shall appoint any designee of Party A as the director or the senior management of Party C, at the request of
Party A;
2.2.8 With respect to the transfer of equity interests of Party C by any other shareholders of Party C to Party A, Party B
hereby waives all of its right of first refusal (if any); Party B gives consent to the execution by each other shareholder
of Party C with Party A and Party C of the exclusive option agreement, the Equity Pledge Agreement and the power of
attorney similar to this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of Attorney, and
undertakes not to take any action in conflict with such documents executed by such other shareholders (if any);
2.2.9
If Party B received any profit distribution, interest, dividend or proceeds of liquidation from Party C, Party B shall
promptly donate all such profit distribution, interest, dividend or proceeds of liquidation to Party A or any other
person designated by Party A in the manner permitted by the applicable PRC laws; and
2.2.10 Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by
and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any
action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any
remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Party B’s Equity
Pledge Agreement or under the Party B’s Power of Attorney, Party B shall not exercise such rights except in
accordance with the written instructions of Party A.
3. Representations and Warranties
Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of
the transfer of the Purchased Equity, that:
3.1 They have the power, capacity and authority to execute and deliver this Agreement and any equity transfer contract to which
they are parties concerning each transfer of the Purchased Equity as described thereunder (each, a “Transfer Contract”), and
to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer
Contracts substantially consistent with the terms of this Agreement upon Party A’s exercise of the Equity Purchase Option. This
Agreement and the Transfer Contracts to which they are parties, once executed, constitute or will constitute their legal, valid
and binding obligations and shall be enforceable against them in accordance with the provisions thereof;
3.2 Party B and Party C have obtained any and all approvals and consents from the third parties and competent government
authorities (if required) for the execution, delivery and performance of this Agreement;
3.3 The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any
Transfer Contracts shall not: (i) cause any violation of any applicable PRC laws; (ii) be inconsistent with the articles of
association or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they
are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party
or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any
licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions
to any licenses or permits issued to either of them;
3.4 Party B has good and marketable title to the equity interests held by it in Party C. Except for Party B’s Equity Pledge
Agreement and Party B’s Power of Attorney, Party B has not placed any Security Interest on such equity interests;
3.5 Party C has good and marketable title to all of its assets, and has not placed any Security Interest on the aforementioned assets;
3.6 Party C does not have any outstanding debts, except for (i) debt incurred during the ordinary course of business; and (ii) debts
disclosed to Party A for which Party A’s written consent has been obtained;
3.7 Party C will comply with all laws and regulations applicable to asset acquisition; and
3.8 There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party
C, assets of Party C or Party C.
4. Term
This Agreement shall become effective upon execution by the Parties, and remain effective until all equity interests held by Party B
in Party C have been transferred or assigned to Party A and/or any other person designated by Party A in accordance with this
Agreement.
5. Governing Law and Disputes Resolution
5.1 Governing Law
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the resolution of
disputes hereunder shall be governed by PRC laws.
5.2 Methods of Disputes Resolution
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either Party
is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration in
Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint
one arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by
Shanghai International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in
Chinese in a confidential manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate
circumstances, the arbitration tribunal or arbitrators may award compensation, injunctive relief in respect of all the Parties’
equities, assets, property interest or land assets (including restriction on conduct of business, restriction or prohibition of
transfer or sale of equities or assets), or propose the winding-up of the Parties in accordance with the dispute resolution clause
and/or applicable PRC laws. In addition, in the course of forming the tribunal, both Parties shall have the right to file an
application to any court with competent jurisdiction (including courts in Hong Kong, Cayman Islands, places of incorporation
of all the Parties (namely Hefei, China) and places where the principal assets of either Party are located) for the grant of
temporary reliefs. During the arbitration, except for the matters under dispute and pending for arbitration, all the Parties shall
continue to exercise their respective rights under this Agreement and perform their respective obligations under this
Agreement.
6.
Taxes and Fees
Each Party shall pay any and all transfer and registration taxes, expenses and fees incurred thereby or levied thereon in
accordance with PRC laws in connection with the preparation and execution of this Agreement and the Transfer Contracts, as
well as the consummation of the transactions contemplated under this Agreement and the Transfer Contracts.
7. Notices
7.1 All notices and other communications required to be given pursuant to this Agreement or otherwise given in connection with
this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, a commercial courier service,
facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be sent by email. The dates
on which notices shall be deemed to have been effectively given shall be determined as follows:
7.1.1
7.1.2
7.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date of
signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the date on
the registered letter receipt;
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 o’clock p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the date
indicated on the fax transmission record.
7.2 For the purpose of notice, the addresses of the Parties are as follows:
Party A:
Address:
Attn:
Party B:
Address:
Attn:
Party C:
Address:
Attn:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Juan Gan
Lihong Qin
********
Lihong Qin
Anhui NIO AI Technology Co., Ltd.
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Juan Gan
7.3 Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of this
Section.
8. Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent
of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is or will be
in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed
pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or
(c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial advisors regarding
the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or financial advisors
shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any confidential information
by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure of such confidential
information by such Party and such Party shall be held liable for breach of this Agreement.
9. Further Warranties
The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the
provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the
implementation of the provisions and purposes of this Agreement.
10. Breach of Agreement
10.1 If Party B or Party C commits any material breach of any term of this Agreement, Party A shall have right to terminate this
Agreement and/or require Party B or Party C to indemnify all damages. This Article 10 shall not prejudice any other rights of
Party A hereunder.
10.2 Unless otherwise provided for by laws, Party B and Party C shall in no case be entitled to terminate or cancel this Agreement.
11. Miscellaneous
11.1 Amendments, changes and supplements
Any amendment, change or supplement to this Agreement shall be made in a written agreement signed by each Party.
11.2 Entire agreement
Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this Agreement
shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter hereof, and
shall supersede all prior oral and written consultations, representations and contracts reached with respect to the subject matter
of this Agreement.
11.3 Headings
The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the
meanings of the provisions of this Agreement.
11.4 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect
in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid,
illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the
intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic
effect of those invalid, illegal or unenforceable provisions.
11.5 Successors
This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the Parties.
11.6 Survival
11.6.1 Any obligations that occurred or that are due in connection with this Agreement before the expiration or early
termination of this Agreement shall survive the expiration or early termination thereof.
11.6.2 The provisions of Sections 5, 8, 10 and this Section 11.6 shall survive the termination of this Agreement.
11.7 Waivers
Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and
shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other
Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.
11.8 Language and Counterpart
This Agreement is written in Chinese in three copies, each Party having one copy.
[Remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title:
Legal Representative
Party B: Lihong Qin
By:
/s/ Lihong Qin
Party C: Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong Qin
By:
Name: Lihong Qin
Title:
Legal Representative
Exclusive Option Agreement
This Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of November 30, 2022, in
Shanghai, the People’s Republic of China (the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special Administrative
Region, Macao Special Administrative Region and Taiwan Region of the PRC):
Party A:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B:
Shaoqing Ren
Address:
********
Party C:
Anhui NIO AI Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
(Each of Party A, Party B and Party C shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.)
Whereas:
1. Party B is the shareholder of Party C and as of the date hereof hold 17.76% of the equity interests of Party C, representing RMB
1,776,000 in the registered capital of Party C.
2. Party A and Party B executed a Loan Agreement (“Loan Agreement”) on November 30, 2022, according to which Party A agreed
to provide to Party B a loan in the amount of RMB 1,776,000 for the purpose of Party B’s contribution to Party C.
Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:
1. Sale and Purchase of Equity Interest
1.1 Option Granted
Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons
(each, a “Designee”) to purchase the equity interests in Party C then held by Party B once or at multiple times at any time in
part or in whole at Party A’s sole and absolute discretion to the extent permitted by PRC laws and at the price described in
Section 1.3 herein (such right being the “Equity Purchase Option”). Except for Party A and the Designee(s), no other person
shall be entitled to the Equity Purchase Option or other rights with respect to the equity interests of Party B. Party C hereby
agrees to the grant by Party B of the Equity Purchase Option to Party A. The term “person” as used herein shall refer to
individuals, companies, joint ventures, partnerships, enterprises, trusts or non-corporate organizations.
1.2 Steps for Exercise of the Equity Purchase Option
Subject to the provisions of PRC laws and regulations, Party A may exercise the Equity Purchase Option by issuing a written
notice to Party B (the “Equity Purchase Notice”), specifying:(a) Party A or the Designee’s decision to exercise the Equity
Purchase Option; (b) the portion of equity interests to be purchased by
Party A or the Designee from Party B (the “Purchased Equity”); and (c) the date for purchasing the Purchased Equity or the
date for the transfer of the Purchased Equity. Upon receipt of the Equity Purchase Notice, Party B shall transfer all the
Purchased Equity to Party A and/or the Designee as set forth in Article 1.4 hereof.
1.3 Purchase Price
The total price for the purchase by Party A of all equity interests in Party C held by Party B upon exercise of the Equity
Purchase Option by Party A shall be RMB 1,776,000; if Party A exercises the Equity Purchase Option to purchase part of the
equity interests held by Party B in Party C, then the purchase price shall be calculated on a pro rata basis. If at the time when
Party A exercises the Equity Purchase Option, the minimum price permitted under PRC laws is higher than the aforementioned
price, then the purchase price shall be such minimum price permitted by PRC laws (collectively, the “Purchase Price”).
1.4 Transfer of Purchased Equity
For each exercise of the Equity Purchase Option by Party A:
1.4.1
1.4.2
1.4.3
1.4.4
Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted
approving Party B’s transfer of the Purchased Equity to Party A and/or the Designee(s);
Party B shall obtain written statements from the other shareholders of Party C giving consent to the transfer of the
Purchased Equity by Party B to Party A and/or the Designee(s) and waiving any right of first refusal with respect
thereto;
Party B shall execute an equity interest transfer contract with respect to each transfer with Party A and/or each
Designee (whichever is applicable), in accordance with the provisions of this Agreement and the Equity Purchase
Notice regarding the Purchased Equity, in the form and substance satisfactory to Party A and/or the Designee(s);
Party B shall, within thirty (30) days after receipt of the Equity Purchase Notice, execute all necessary contracts,
agreements or documents with relevant parties, obtain all necessary government approvals and permits, and take all
necessary actions, so as to transfer valid ownership of the Purchased Equity to Party A and/or the Designee(s),
unencumbered by any Security Interests, and cause Party A and/or the Designee(s) to become the registered owner(s)
of the Purchased Equity. For the purpose of this Section and this Agreement, “Security Interests” shall include
securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first refusal, right to
offset, ownership retention or other security arrangements, but shall be deemed to exclude any security interest created
by this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of Attorney; “Party B’s Equity Pledge
Agreement” as used in this Agreement shall refer to the Equity Pledge Agreement executed by and among Party A,
Party B and Party C on the date hereof and any modification, amendment and restatement thereto.; “Party B’s Power
of Attorney” as used in this Agreement shall refer to the Power of Attorney executed by Party B on the date hereof
granting Party A with a power of attorney and any modification, amendment and restatement thereto.
1.5 Payment
The Parties have agreed in the Loan Agreement that any proceeds obtained by Party B through the transfer of its equity
interests in Party C shall be used for repayment of the loan provided by Party A (and any interest thereon) in accordance with
the Loan Agreement. Accordingly, upon exercise of the Equity Purchase Option, Party A may make the payment of the
Purchase Price by way of offset of the outstanding debts owed by Party B to Party A (including without limitation the
outstanding amount of the loan owed by Party B to Party A and any interest thereon) (such debts, the “Offset Debts”), in
which case Party A shall not be required to pay any additional purchase price to Party B, unless the Purchase Price set forth
herein is required to be adjusted in accordance with PRC laws. If PRC laws impose mandatory requirements on the Purchase
Price agreed under this Agreement, such that the minimum Purchase Price permitted under PRC laws exceeds the price already
offset with the Offset Debts, Party B hereby waives its right to receive the amount of price that exceeds the amount offset with
the Offset Debts.
2. Covenants
2.1 Covenants regarding Party C
Party B (as a shareholder of Party C) and Party C hereby covenant as follows:
2.1.1 Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the
constitutional documents of Party C, increase or decrease its registered capital, or change its structure of registered
capital in other manners;
2.1.2
They shall maintain Party C’s corporate existence in accordance with good financial and business standards and
practices, obtain and maintain all necessary government licenses and permits required for Party C’s business, and
prudently and effectively operate its business and handle its affairs;
2.1.3 Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer,
mortgage or dispose of in any manner any material assets of Party C or legal or beneficial interest in the material
business or revenues of Party C, or allow the encumbrance thereon of any Security Interest;
2.1.4 Without the prior written consent of Party A, they shall not incur, inherit, guarantee or assume any debt, except for
debts incurred in the ordinary course of business other than payables incurred by loans;
2.1.5
They shall always operate all of Party C’s businesses within the ordinary course of business to maintain the asset value
of Party C and refrain from any action/omission that may adversely affect Party C’s operating status and asset value;
2.1.6 Without the prior written consent of Party A, they shall not cause Party C to execute any material contract, except the
contracts in the ordinary course of business;
2.1.7 Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or
credit;
2.1.8
2.1.9
They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s
request;
If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an
insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate similar
businesses;
2.1.10 Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire
or invest in any person;
2.1.11 They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to Party C’s assets, business or revenue;
2.1.12 To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents,
take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary or
appropriate defenses against all claims;
2.1.13 Without the prior written consent of Party A, Party C shall not in any manner distribute dividends to its shareholders,
provided that upon Party A’s request, Party C shall immediately distribute all distributable profits to its shareholders;
2.1.14 At the request of Party A, they shall appoint any person designated by Party A as the director or senior management of
Party C.
2.1.15 Without Party A’s prior written consent, they shall not engage in any business in competition with Party A or its
affiliates;
2.1.16 Unless otherwise mandatorily required by PRC laws, Party C shall not be dissolved or liquated without prior written
consent by Party A;
2.1.17 Once PRC laws permit foreign investors to invest in the principal business of Party C in the PRC, with a controlling
stake and/or in the form of wholly foreign-owned enterprise, and the competent PRC government authorities begin to
approve such investments, upon Party A’s exercise of the Equity Purchase Option, Party B shall immediately transfer
to Party A or the Designee(s) the equity interests in Party C held by Party B, and Party C shall cooperate with the
equity transfer procedures; and
2.1.18 With respect to the covenants applicable to Party C under this Article 2.1, Party B and Party C shall cause Party C’s
subsidiaries to abide by such covenants where applicable, as if such subsidiaries were Party C under the corresponding
paragraphs.
2.2 Covenants of Party B
Party B hereby covenants as follows:
2.2.1 Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other
manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance
thereon of any Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge Agreement
and Party B’s Power of Attorney;
2.2.2 Without the prior written consent of Party A, Party B shall ensure the shareholders’ meeting and/or the directors (or
the executive director) of Party C not to approve any sale, transfer, mortgage or disposition in any other manner of any
legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any
Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge Agreement and Party B’s
Power of Attorney;
2.2.3 Without the prior written consent of Party A, Party B shall cause the shareholders’ meeting or the directors (or the
executive director) of Party C not to approve the merger or consolidation with any person, or the acquisition of or
investment in any person;
2.2.4
Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the equity interests in Party C held by Party B;
2.2.5
2.2.6
Party B shall ensure the shareholders’ meeting or the directors (or the executive director) of Party C to vote in favor of
the transfer of the Purchased Equity as set forth in this Agreement and to take any and all other actions that may be
requested by Party A;
To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary
or appropriate defenses against all claims;
2.2.7
Party B shall appoint any designee of Party A as the director or the senior management of Party C, at the request of
Party A;
2.2.8 With respect to the transfer of equity interests of Party C by any other shareholders of Party C to Party A, Party B
hereby waives all of its right of first refusal (if any); Party B gives consent to the execution by each other shareholder
of Party C with Party A and Party C of the exclusive option agreement, the Equity Pledge Agreement and the power of
attorney similar to this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of Attorney, and
undertakes not to take any action in conflict with such documents executed by such other shareholders (if any);
2.2.9
If Party B received any profit distribution, interest, dividend or proceeds of liquidation from Party C, Party B shall
promptly donate all such profit distribution, interest, dividend or proceeds of liquidation to Party A or any other
person designated by Party A in the manner permitted by the applicable PRC laws; and
2.2.10 Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by
and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any
action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any
remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Party B’s Equity
Pledge Agreement or under the Party B’s Power of Attorney, Party B shall not exercise such rights except in
accordance with the written instructions of Party A.
3. Representations and Warranties
Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of
the transfer of the Purchased Equity, that:
3.1 They have the power, capacity and authority to execute and deliver this Agreement and any equity transfer contract to which
they are parties concerning each transfer of the Purchased Equity as described thereunder (each, a “Transfer Contract”), and
to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer
Contracts substantially consistent with the terms of this Agreement upon Party A’s exercise of the Equity Purchase Option. This
Agreement and the Transfer Contracts to which they are parties, once executed, constitute or will constitute their legal, valid
and binding obligations and shall be enforceable against them in accordance with the provisions thereof;
3.2 Party B and Party C have obtained any and all approvals and consents from the third parties and competent government
authorities (if required) for the execution, delivery and performance of this Agreement;
3.3 The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any
Transfer Contracts shall not: (i) cause any violation of any applicable PRC laws; (ii) be inconsistent with the articles of
association or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they
are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party
or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any
licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions
to any licenses or permits issued to either of them;
3.4 Party B has good and marketable title to the equity interests held by it in Party C. Except for Party B’s Equity Pledge
Agreement and Party B’s Power of Attorney, Party B has not placed any Security Interest on such equity interests;
3.5 Party C has good and marketable title to all of its assets, and has not placed any Security Interest on the aforementioned assets;
3.6 Party C does not have any outstanding debts, except for (i) debt incurred during the ordinary course of business; and (ii) debts
disclosed to Party A for which Party A’s written consent has been obtained;
3.7 Party C will comply with all laws and regulations applicable to asset acquisition; and
3.8 There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party
C, assets of Party C or Party C.
4. Term
This Agreement shall become effective upon execution by the Parties, and remain effective until all equity interests held by Party B
in Party C have been transferred or assigned to Party A and/or any other person designated by Party A in accordance with this
Agreement.
5. Governing Law and Disputes Resolution
5.1 Governing Law
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the resolution of
disputes hereunder shall be governed by PRC laws.
5.2 Methods of Disputes Resolution
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either Party
is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration in
Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint
one arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by
Shanghai International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in
Chinese in a confidential manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate
circumstances, the arbitration tribunal or arbitrators may award compensation, injunctive relief in respect of all the Parties’
equities, assets, property interest or land assets (including restriction on conduct of business, restriction or prohibition of
transfer or sale of equities or assets), or propose the winding-up of the Parties in accordance with the dispute resolution clause
and/or applicable PRC laws. In addition, in the course of forming the tribunal, both Parties shall have the right to file an
application to any court with competent jurisdiction (including courts in Hong Kong, Cayman Islands, places of incorporation
of all the Parties (namely Hefei, China) and places where the principal assets of either Party are located) for the grant of
temporary reliefs. During the arbitration, except for the matters under dispute and pending for arbitration, all the Parties shall
continue to exercise their respective rights under this Agreement and perform their respective obligations under this
Agreement.
6. Taxes and Fees
Each Party shall pay any and all transfer and registration taxes, expenses and fees incurred thereby or levied thereon in
accordance with PRC laws in connection with the preparation and execution of this Agreement and the Transfer Contracts, as
well as the consummation of the transactions contemplated under this Agreement and the Transfer Contracts.
7. Notices
7.1 All notices and other communications required to be given pursuant to this Agreement or otherwise given in connection with
this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, a commercial courier service,
facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be sent by email. The dates
on which notices shall be deemed to have been effectively given shall be determined as follows:
7.1.1
7.1.2
7.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date of
signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the date on
the registered letter receipt;
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 o’clock p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the date
indicated on the fax transmission record.
7.2 For the purpose of notice, the addresses of the Parties are as follows:
Party A:
Address:
Attn:
Party B:
Address:
Attn:
Party C:
Address:
Attn:
Anhui NIO Autonomous Driving Technology Co., Ltd.
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Juan Gan
Shaoqing Ren
********
Shaoqing Ren
Anhui NIO AI Technology Co., Ltd.
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Juan Gan
7.3 Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of this
Section.
8. Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent
of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is or will be
in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed
pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or
(c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial advisors regarding
the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or financial advisors
shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any confidential information
by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure of such confidential
information by such Party and such Party shall be held liable for breach of this Agreement.
9. Further Warranties
The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the
provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the
implementation of the provisions and purposes of this Agreement.
10. Breach of Agreement
10.1 If Party B or Party C commits any material breach of any term of this Agreement, Party A shall have right to terminate this
Agreement and/or require Party B or Party C to indemnify all damages. This Article 10 shall not prejudice any other rights of
Party A hereunder.
10.2 Unless otherwise provided for by laws, Party B and Party C shall in no case be entitled to terminate or cancel this Agreement.
11. Miscellaneous
11.1 Amendments, changes and supplements
Any amendment, change or supplement to this Agreement shall be made in a written agreement signed by each Party.
11.2 Entire agreement
Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this Agreement
shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter hereof, and
shall supersede all prior oral and written consultations, representations and contracts reached with respect to the subject matter
of this Agreement.
11.3 Headings
The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the
meanings of the provisions of this Agreement.
11.4 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect
in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid,
illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the
intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic
effect of those invalid, illegal or unenforceable provisions.
11.5 Successors
This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the Parties.
11.6 Survival
11.6.1 Any obligations that occurred or that are due in connection with this Agreement before the expiration or early
termination of this Agreement shall survive the expiration or early termination thereof.
11.6.2 The provisions of Sections 5, 8, 10 and this Section 11.6 shall survive the termination of this Agreement.
11.7 Waivers
Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and
shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other
Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.
11.8 Language and Counterpart
This Agreement is written in Chinese in three copies, each Party having one copy.
[Remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong Qin
Lihong Qin
Legal Representative
Party B: Shaoqing Ren
By:
/s/ Shaoqing Ren
Party C: Anhui NIO AI Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong Qin
Lihong Qin
Legal Representative
Exhibit 4.53
To:
Board of Directors of NIO Inc.;
Board of Directors of Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”); and
Board of Directors of Anhui NIO AI Technology Co., Ltd (“NIO AI”)
Confirmation and Undertaking Letter
The undersigned, Bin Li, a citizen of the People’s Republic of China (the “PRC”) with ID Card No.: ********, as a shareholder of NIO
AI, hereby confirms, undertakes and warrants that in the event of the death, incapacity, divorce or the occurrence of any circumstances
which may affect the exercise of equity interest in NIO AI held by me, I shall ensure my heirs, guardians, creditors, spouse or any other
persons who are entitled to claim rights or benefits in respect of the equity interest in NIO AI held by me and any interests attached
thereto, will not take any action, at any time and in any way, that may affect or interfere with the performance of my obligations under
the Control Documents (including the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Equity Pledge
Agreement, the Loan Agreement and the Power of Attorney entered into by me on November 30, 2022, as well as any modification,
alteration and/or supplementary agreements entered into by the relevant parties from time to time, collectively, the “Control
Documents”).
The undersigned confirms that: (1) the equity interest in NIO AI held by me and any interests attached thereto are not jointly owned by
myself and my spouse, and my spouse does not own and has no control over such property or interests; (2) the daily operation
management and voting matters of me in respect of NIO AI are not affected by my spouse; and (3) in the event of that my spouse and I
are divorced, I will take all actions deemed necessary by NIO Autonomous Driving to ensure the performance of the Control Documents.
The undersigned further confirms that, when the law of the PRC allow NIO Autonomous Driving to operate the relevant business
operated by NIO AI or to invest in NIO AI without the use of Control Documents, I will transfer all of the equity interest in NIO AI to
NIO Autonomous Driving and/or its designated third party and terminate the Control Documents upon the request of NIO Autonomous
Driving. Subject to the law of the PRC, upon the termination of the Control Documents, I will return any consideration received from
NIO Autonomous Driving in acquiring the equity interest in NIO AI to NIO Autonomous Driving or its designated entities in the manner
as requested by NIO Autonomous Driving.
The undersigned undertakes that during the term of the Control Documents, (i) unless with the written consent of NIO Autonomous
Driving, I will not directly or indirectly, whether through myself or any other natural person or legal entity, participate in, or engage in,
acquire or hold (in any case, whether as a shareholder, partner, agent, employee or otherwise) any business that is or may be in
competition with NIO Autonomous Driving, NIO AI and their affiliates; (ii) no action or omission of action by me will result in any
conflict of interests between me and NIO Autonomous Driving (including but not limited to the shareholders of NIO Autonomous
Driving); and (iii) in the event of such conflict of interest (occurrence of which is subject to the decision of NIO Autonomous Driving in
its sole discretion), I will, subject to the law of the PRC, take any action as directed by NIO Autonomous Driving to eliminate such
conflict of interest.
For all disputes arising from the implementation of or in connection with this letter, myself and any interested party may submit such
disputes to arbitration by Shanghai International Economic and Trade Arbitration Commission in Shanghai in accordance with its
arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three arbitrators appointed in accordance with
arbitration rules. The claimant shall appoint one arbitrator, the respondent shall appoint one arbitrator, and the third arbitrator shall be
appointed by the above two arbitrators through consultation or by Shanghai International Economic and Trade Arbitration Commission.
The arbitration shall be conducted confidentially, and the language of the arbitration shall be Chinese. The arbitration award shall be final
and binding upon the parties. Where appropriate, the arbitration tribunal or the arbitrators may award compensation, injunctive relief in
respect of all the parties’ equities, assets, property interest or land assets (including restrictions on conduct of business, restrictions or
prohibitions on transfer or sale of equities or assets), or propose the winding up of the relevant parties in accordance with the dispute
resolution provisions and/or applicable laws of the PRC. In addition, any interested party and myself may apply to any court having
jurisdiction (including Hong Kong, the Cayman Islands, the place of incorporation of either party (namely Hefei, China) or the place
where the principal assets of any interested party or myself are located) for interim relief. During the arbitration, this letter shall remain
effective except for the matters under dispute and pending for arbitration.
(Signature Page to Confirmation and Undertaking Letter)
By:
/s/ Bin Li
Name: Bin Li
November 30, 2022
To:
Board of Directors of NIO Inc.;
Board of Directors of Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”); and
Board of Directors of Anhui NIO AI Technology Co., Ltd. (“NIO AI”)
Confirmation and Undertaking Letter
The undersigned, Lihong Qin, a citizen of the People’s Republic of China (the “PRC”) with ID Card No.: ********, as a shareholder of
NIO AI, hereby confirms, undertakes and warrants that in the event of the death, incapacity, divorce or the occurrence of any
circumstances which may affect the exercise of equity interest in NIO AI held by me, I shall ensure my heirs, guardians, creditors, spouse
or any other persons who are entitled to claim rights or benefits in respect of the equity interest in NIO AI held by me and any interests
attached thereto, will not take any action, at any time and in any way, that may affect or interfere with the performance of my obligations
under the Control Documents (including the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Equity
Pledge Agreement, the Loan Agreement and the Power of Attorney entered into by me on November 30, 2022, as well as any
modification, alteration and/or supplementary agreements entered into by the relevant parties from time to time, collectively, the
“Control Documents”).
The undersigned confirms that: (1) the equity interest in NIO AI held by me and any interests attached thereto are not jointly owned by
myself and my spouse, and my spouse does not own and has no control over such property or interests; (2) the daily operation
management and voting matters of me in respect of NIO AI are not affected by my spouse; and (3) in the event that my spouse and I are
divorced, I will take all actions deemed necessary by NIO Autonomous Driving to ensure the performance of the Control Documents.
The undersigned further confirms that, when the law of the PRC allow NIO Autonomous Driving to operate the relevant business
operated by NIO AI or to invest in NIO AI without the use of Control Documents, I will transfer all of the equity interest in NIO AI to
NIO Autonomous Driving and/or its designated third party and terminate the Control Documents upon the request of NIO Autonomous
Driving. Subject to the law of the PRC, upon the termination of the Control Documents, I will return any consideration received from
NIO Autonomous Driving in acquiring the equity interest in NIO AI to NIO Autonomous Driving or its designated entities in the manner
as requested by NIO Autonomous Driving.
The undersigned undertakes that during the term of the Control Documents, (i) unless with the written consent of NIO Autonomous
Driving, I will not directly or indirectly, whether through myself or any other natural person or legal entity, participate in, or engage in,
acquire or hold (in any case, whether as a shareholder, partner, agent, employee or otherwise), any business that is or may be in
competition with NIO Autonomous Driving, NIO AI and their affiliates; (ii) no action or omission of action by me will result in any
conflict of interests between me and NIO Autonomous Driving (including but not limited to the shareholders of NIO Autonomous
Driving); and (iii) in the event of such conflict of interest (occurrence of which is subject to the decision of NIO Autonomous Driving in
its sole discretion), I will, subject to the law of the PRC, take any action as directed by NIO Autonomous Driving to eliminate such
conflict of interest.
For all disputes arising from the implementation of or in connection with this letter, myself and any interested party may submit such
disputes to arbitration by Shanghai International Economic and Trade Arbitration Commission in Shanghai in accordance with its
arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three arbitrators appointed in accordance with
arbitration rules. The claimant shall appoint one arbitrator, the respondent shall appoint one arbitrator, and the third arbitrator shall be
appointed by the above two arbitrators through consultation or by Shanghai International Economic and Trade Arbitration Commission.
The arbitration shall be conducted confidentially, and the language of the arbitration shall be Chinese. The arbitration award shall be final
and binding upon the parties. Where appropriate, the arbitration tribunal or the arbitrators may award compensation, injunctive relief in
respect of all the parties’ equities, assets, property interest or land assets (including restrictions on conduct of business, restrictions or
prohibitions on any transfer or sale of equities or assets), or propose the winding up of the relevant parties in accordance with the dispute
resolution provisions and/or applicable laws of the PRC. In addition, any interested party and myself may apply to any court having
jurisdiction (including Hong Kong, the Cayman Islands, the place of incorporation of either party (namely Hefei, China) or the place
where the principal assets of any interested party or myself are located) for interim relief. During the arbitration, this letter shall remain
effective except for the matters under dispute and pending for arbitration.
(Signature Page to Confirmation and Undertaking Letter)
By:
/s/ Lihong Qin
Name: Lihong Qin
November 30, 2022
To:
Board of Directors of NIO Inc.;
Board of Directors of Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”); and
Board of Directors of Anhui NIO AI Technology Co., Ltd. (“NIO AI”)
Confirmation and Undertaking Letter
The undersigned, Shaoqing Ren, a citizen of the People’s Republic of China (the “PRC”) with ID Card No.: ********, as a shareholder
of NIO AI, hereby confirms, undertakes and warrants that in the event of the death, incapacity, divorce or the occurrence of any
circumstances which may affect the exercise of equity interest in NIO AI held by me, I shall ensure my heirs, guardians, creditors, spouse
or any other persons who are entitled to claim rights or benefits in respect of the equity interest in NIO AI held by me and any interests
attached thereto, will not take any action, at any time and in any way, that may affect or interfere with the performance of my obligations
under the Control Documents (including the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Equity
Pledge Agreement, the Loan Agreement and the Power of Attorney entered into by me on November 30, 2022, as well as any
modification, alteration and/or supplementary agreements entered into by the relevant parties from time to time, collectively, the
“Control Documents”).
The undersigned confirms that: (1) my equity interest in NIO AI and any interests attached thereto are not jointly owned by myself and
my spouse, and my spouse does not own and has no control over such property or interests; (2) the daily operation management and
voting matters of me in respect of NIO AI are not affected by my spouse; and (3) in the event of that my spouse and I are divorced, I will
take all actions deemed necessary by NIO Autonomous Driving to ensure the performance of the Control Documents.
The undersigned further confirms that, when the law of PRC allow NIO Autonomous Driving to operate the relevant business operated
by NIO AI or to invest in NIO AI without the use of Control Documents upon the request of NIO Autonomous Driving, I will transfer all
of the equity interest in NIO AI to NIO Autonomous Driving and/or its designated third party and terminate the Control Documents.
Subject to the law of the PRC, upon the termination of the Control Documents, I will return any consideration received from NIO
Autonomous Driving in acquiring the equity interest in NIO AI to NIO Autonomous Driving or its designated entities in the manner as
requested by NIO Autonomous Driving.
The undersigned undertakes that during the term of the Control Documents, (i) unless with the written consent of NIO Autonomous
Driving, I will not directly or indirectly, whether through myself or any other natural person or legal entity, participate in, or engage in,
acquire or hold (in any case, whether as a shareholder, partner, agent, employee or otherwise), any business that is or may be in
competition with NIO Autonomous Driving, NIO AI and their affiliates; (ii) no action or omission of action by me will result in any
conflict of interests between me and NIO Autonomous Driving (including but not limited to the shareholders of NIO Autonomous
Driving); and (iii) in the event of such conflict of interest (occurrence of which is subject to the decision of NIO Autonomous Driving in
its sole discretion), I will, subject to the law of the PRC, take any action as directed by NIO Autonomous Driving to eliminate such
conflict of interest.
In all disputes arising from the implementation of or in connection with this letter, myself and any interested party may submit such
disputes to arbitration by Shanghai International Economic and Trade Arbitration Commission in Shanghai in accordance with its
arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three arbitrators appointed in accordance with
arbitration rules. The claimant shall appoint one arbitrator, the respondent shall appoint one arbitrator, and the third arbitrator shall be
appointed by the above two arbitrators through consultation or by Shanghai International Economic and Trade Arbitration Commission.
The arbitration shall be conducted confidentially, and the language of the arbitration shall be Chinese. The arbitration award shall be final
and binding upon the parties. Where appropriate, the arbitration tribunal or the arbitrators may award compensation, injunctive relief in
respect of all the parties’ equities, assets, property rights or land assets (including restrictions on conduct of business, restrictions or
prohibitions on any transfer or sale of equities or assets), or propose the winding up of the relevant parties in accordance with the dispute
resolution provisions and/or applicable laws of the PRC. In addition, any interested party and myself may apply to any court having
jurisdiction (including Hong Kong, the Cayman Islands, the place of incorporation of either party (namely Hefei, China) or the place
where the principal assets of either interested party or myself are located) for interim relief. During the arbitration, this letter shall remain
effective except for the matters under dispute and pending for arbitration.
(Signature Page to Confirmation and Undertaking Letter)
By:
/s/ Shaoqing Ren
Name: Shaoqing Ren
November 30, 2022
Exhibit 4.54
To:
Board of Directors of NIO Inc.;
Board of Directors of Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”); and
Board of Directors of Anhui NIO AI Technology Co., Ltd (“NIO AI”)
CONSENT LETTER
The undersigned, Yizhi WANG, a citizen of the People’s Republic of China (the “PRC”) (PRC Identification No.: ********), am the
legitimate spouse of Bin LI (a PRC citizen with PRC Identification No.: ********, and hereinafter referred to as “my spouse”). I hereby
acknowledge that I am aware of, and unconditionally and irrevocably consent to, the execution of the following documents by my spouse
and/or NIO AI in which my spouse directly owns equity interest, and agree that my spouse may dispose of the equities in NIO AI owned
by my spouse and any interests attached thereto in accordance with the provisions of the Controlling Agreements:
1.
2.
3.
4.
5.
6.
7.
the Exclusive Business Cooperation Agreement executed by and between NIO AI and NIO Autonomous Driving on November 30,
2022;
the Exclusive Option Agreement executed by and among Bin LI, NIO Autonomous Driving and NIO AI on November 30, 2022;
the Equity Pledge Agreement executed by and among Bin LI, NIO Autonomous Driving and NIO AI on November 30, 2022;
the Loan Agreement executed by and between Bin LI and NIO Autonomous Driving on November 30, 2022;
the Power of Attorney issued by Bin LI to NIO Autonomous Driving on November 30, 2022;
the Confirmation and Undertaking Letter signed by Bin LI on November 30, 2022; and
any modification, amendment and/or supplementary agreement to be subsequently executed by the relevant parties from time to time
in connection with the documents set forth in above sections 1 to 6 (the documents described in above sections 1 to 7 are collectively
referred to as the “Controlling Agreements”).
I hereby acknowledge and confirm that the equity interests held by my spouse in NIO AI now and in the future and any interests attached
thereto are my spouse’s personal property and do not constitute property jointly owned by me and my spouse, and that my spouse has the
right to dispose of such equities and any interests attached thereto at his sole discretion. I hereby unconditionally and irrevocably waive
any rights or interests to/in such equities and corresponding assets thereof which may be granted to me under any applicable laws,
undertake that I will not make any claim in respect of such equities and their corresponding assets (including a claim that such equities
and assets corresponding thereto constitute the property jointly owned by me and my spouse, and a claim, on basis of the foresaid claim,
for participation in the daily operation, management and voting affairs of NIO AI, or other form of influence on my spouse’s decisions in
relation to such equities and attached interests). I hereby further acknowledge that my spouse is entitled to own his rights and perform his
obligations under the Controlling Agreements at his sole discretion, and that neither my spouse’s performance, further amendment or
termination of the Controlling Agreements nor his execution of any other documents in substitution for any of the Controlling
Agreements shall require my further authorization or consent.
I hereby undertake that I will execute all necessary documents and take all necessary actions to ensure the due performance of the
Controlling Agreements (as amended from time to time).
I hereby agree and undertake that I will not conduct any act that conflicts with the arrangements under the Controlling Agreements
or this Consent Letter at any time. In the event that I obtain any equities of NIO AI and any interests attached thereto for any reason, I
shall be bound by the Controlling Agreements (as amended from time to time) and comply with my obligations as a shareholder of NIO
AI under the Controlling Agreements (as amended from time to time); and, for such purpose, I shall, upon NIO Autonomous Driving’s
request, execute a series of written documents in substantially the same form and substance as that of the Controlling Agreements (as
amended from time to time).
I hereby further acknowledge, undertake and warrant that my spouse shall, in any circumstances (including but not limited to a
divorce between me and my spouse), have the right to dispose of the equity interests which he owns in NIO AI and the assets
corresponding thereto at his sole discretion, and that I will not take any action that may affect or interfere with my spouse’s performance
of his obligations under the Controlling Agreements (including but not limited to a claim for any equities of NIO AI or any rights which
are obtained through controlling contractual arrangement).
In the event of any dispute arising from the performance of this Consent Letter or in connection with this Consent Letter, either I or
any interested party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of each party’s equities, assets, property interest or land assets
(including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the winding-up
of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in the course of forming
the tribunal, either I or the interested party shall have the right to file an application to any court with competent jurisdiction (including
courts in Hong Kong, Cayman Islands and places of incorporation of the interested party (namely Hefei, China) and places where either
my or the interested party’s main assets are located) for the grant of temporary reliefs. During the arbitration proceeding, this Consent
Letter shall continue to be valid except for the part which is disputed by either the interested party or me and pending for arbitration.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
(Signature Page of the Consent Letter)
By:
Name:
/s/ Yizhi WANG
Yizhi WANG
November 30, 2022
Bin LI hereby agrees and accepts this Consent Letter:
By:
Name:
/s/ Bin LI
Bin LI
NIO Inc.
By:
Name:
Title:
/s/ Bin LI
Bin LI
Chairman
Anhui NIO Autonomous Driving Technology Co., Ltd. and Anhui NIO AI Technology Co., Ltd. hereby agree and acknowledge this
Consent Letter:
Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong QIN
Lihong QIN
Legal Representative
Anhui NIO AI Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong QIN
Lihong QIN
Legal Representative
To:
Board of Directors of NIO Inc.;
Board of Directors of Anhui NIO Autonomous Driving Technology Co., Ltd. (the “NIO Autonomous Driving”); and
Board of Directors of Anhui NIO AI Technology Co., Ltd. (the “NIO AI”)
CONSENT LETTER
The undersigned, Zhen CHANG, a citizen of the People’s Republic of China (the “PRC”) (PRC Identification No.: ********), am the
legitimate spouse of Lihong QIN (a PRC citizen with PRC Identification No.: ********, and hereinafter referred to as “my spouse”). I
hereby acknowledge that I am aware of, and unconditionally and irrevocably consent to, the execution of the following documents by my
spouse and/or NIO AI in which my spouse directly owns equity interest, and agree that my spouse may dispose of the equities in NIO AI
owned by my spouse and any interests attached thereto in accordance with the provisions of the Controlling Agreements:
1.
the Exclusive Business Cooperation Agreement executed by and between NIO AI and NIO Autonomous Driving on November 30,
2022;
2.
3.
4.
5.
6.
7.
the Exclusive Option Agreement executed by and among Lihong QIN, NIO Autonomous Driving and NIO AI on November 30,
2022;
the Equity Pledge Agreement executed by and among Lihong QIN, NIO Autonomous Driving and NIO AI on November 30, 2022;
the Loan Agreement executed by and between Lihong QIN and NIO Autonomous Driving on November 30, 2022;
the Power of Attorney issued by Lihong QIN to NIO Autonomous Driving on November 30, 2022;
the Confirmation and Undertaking Letter signed by Lihong QIN on November 30, 2022; and
any modification, amendment and/or supplementary agreement to be subsequently executed by the relevant parties from time to time
in connection with the documents set forth in above sections 1 to 6 (the documents described in above sections 1 to 7 are collectively
referred to as the “Controlling Agreements”).
I hereby acknowledge and confirm that the equity interests held by my spouse in NIO AI now and in the future and any interests
attached thereto are my spouse’s personal property and do not constitute property jointly owned by me and my spouse, and that my
spouse has the right to dispose of such equities and any interests attached thereto at his sole discretion. I hereby unconditionally and
irrevocably waive any rights or interests to/in such equities and corresponding assets thereof which may be granted to me under any
applicable laws, undertake that I will not make any claim in respect of such equities and their corresponding assets (including a claim
that such equities and assets corresponding thereto constitute the property jointly owned by me and my spouse, and a claim, on basis of
the foresaid claim, for participation in the daily operation, management and voting affairs of NIO AI, or other form of influence on my
spouse’s decisions in relation to such equities and attached interests). I hereby further acknowledge that my spouse is entitled to own and
perform his rights and obligations under the Controlling Agreements at his sole discretion, and that neither my spouse’s performance,
further amendment or termination of the Controlling Agreements nor his execution of any other documents in substitution for any of the
Controlling Agreements shall require my further authorization or consent.
I hereby undertake that I will execute all necessary documents and take all necessary actions to ensure the due performance of the
Controlling Agreements (as amended from time to time).
I hereby agree and undertake that I will not conduct any act that conflicts with the arrangements under the Controlling Agreements
or this Consent Letter at any time. In the event that I obtain any equities of NIO AI and any interests attached thereto for any reason, I
shall be bound by the Controlling Agreements (as amended from time to time) and comply with my obligations as a shareholder of NIO
AI under the Controlling Agreements (as amended from time to time); and, for such purpose, I shall, upon NIO Autonomous Driving’s
request, execute a series of written documents in substantially the same form and substance as that of the Controlling Agreements (as
amended from time to time).
I hereby further acknowledge, undertake and warrant that my spouse shall, in any circumstances (including but not limited to a
divorce between me and my spouse), have the right to dispose of the equity interests which he owns in NIO AI and the assets
corresponding thereto at his sole discretion, and that I will not take any action that may affect or interfere with my spouse’s performance
of his obligations under the Controlling Agreements (including but not limited to a claim for any equities of NIO AI or any rights which
are obtained through controlling contractual arrangement).
In the event of any dispute arising from the performance of this Consent Letter or in connection with this Consent Letter, either I or
any interested party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of each party’s equities, assets, property interest or land assets
(including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the winding-up
of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in the course of forming
the tribunal, either I or the interested party shall have the right to file an application to any court with competent jurisdiction (including
courts in Hong Kong, Cayman Islands and places of incorporation of the interested party (namely Hefei, China) and places where either
my or the interested party’s main assets are located) for the grant of temporary reliefs. During the arbitration proceeding, this Consent
Letter shall continue to be valid except for the part which is disputed by either the interested party or me and pending for arbitration.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
(Signature Page of the Consent Letter)
By:
Name:
/s/ Zhen CHANG
Zhen CHANG
November 30, 2022
Lihong QIN hereby agrees and accepts this Consent Letter:
By:
Name:
/s/ Lihong QIN
Lihong QIN
NIO Inc.
By:
Name:
Title:
/s/ Bin LI
Bin LI
Chairman
Anhui NIO Autonomous Driving Technology Co., Ltd. and Anhui NIO AI Technology Co., Ltd. hereby agree and acknowledge this
Consent Letter:
Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong QIN
Lihong QIN
Legal Representative
Anhui NIO AI Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Lihong QIN
Lihong QIN
Legal Representative
To:
Board of Directors of NIO Inc.;
Board of Directors of Anhui NIO Autonomous Driving Technology Co., Ltd. (“NIO Autonomous Driving”); and
Board of Directors of Anhui NIO AI Technology Co., Ltd (“NIO AI”)
CONSENT LETTER
The undersigned, Weiyan PENG, a citizen of the People’s Republic of China (the “PRC”) (PRC Identification No.: ********), am the
legitimate spouse of Shaoqing REN (a PRC citizen with PRC Identification No.: ********, and hereinafter referred to as “my spouse”). I
hereby acknowledge that I am aware of, and unconditionally and irrevocably consent to, the execution of the following documents by my
spouse and/or NIO AI in which my spouse directly owns equity interest, and agree that my spouse may dispose of the equities in NIO AI
owned by my spouse and any interests attached thereto in accordance with the provisions of the Controlling Agreements:
1.
2.
3.
4.
5.
6.
7.
the Exclusive Business Cooperation Agreement executed by and between NIO AI and NIO Autonomous Driving on November 30,
2022;
the Exclusive Option Agreement executed by and among Shaoqing REN, NIO Autonomous Driving and NIO AI on November 30,
2022;
the Equity Pledge Agreement executed by and among Shaoqing REN, NIO Autonomous Driving and NIO AI on November 30,
2022;
the Loan Agreement executed by and between Shaoqing REN and NIO Autonomous Driving on November 30, 2022;
the Power of Attorney issued by Shaoqing REN to NIO Autonomous Driving on November 30, 2022;
the Confirmation and Undertaking Letter signed by Shaoqing REN on November 30, 2022; and
any modification, amendment and/or supplementary agreement to be subsequently executed by the relevant parties from time to time
in connection with the documents set forth in above sections 1 to 6 (the documents described in above sections 1 to 7 are collectively
referred to as the “Controlling Agreements”).
I hereby acknowledge and confirm that the equity interests held by my spouse in NIO AI now and in the future and any interests
attached thereto are my spouse’s personal property and do not constitute property jointly owned by me and my spouse, and that my
spouse has the right to dispose of such equities and any interests attached thereto at his sole discretion. I hereby unconditionally and
irrevocably waive any rights or interests to/in such equities and corresponding assets thereof which may be granted to me under any
applicable laws, undertake that I will not make any claim in respect of such equities and their corresponding assets (including a claim
that such equities and assets corresponding thereto constitute the property jointly owned by me and my spouse, and a claim, on basis of
the foresaid claim, for participation in the daily operation, management and voting affairs of NIO AI, or other form of influence on my
spouse’s decisions in relation to such equities and attached interests). I hereby further acknowledge that my spouse is entitled to own and
perform his rights and obligations under the Controlling Agreements at his sole discretion, and that neither my spouse’s performance,
further amendment or termination of the Controlling Agreements nor his execution of any other documents in substitution for any of the
Controlling Agreements shall require my further authorization or consent.
I hereby undertake that I will execute all necessary documents and take all necessary actions to ensure the due performance of the
Controlling Agreements (as amended from time to time).
I hereby agree and undertake that I will not conduct any act that conflicts with the arrangements under the Controlling Agreements
or this Consent Letter at any time. In the event that I obtain any equities of NIO AI and any interests attached thereto for any reason,
then: I shall be bound by the Controlling Agreements (as amended from time to time) and comply with my obligations as a shareholder
of NIO AI under the Controlling Agreements (as amended from time to time); and, for such purpose, I shall, upon NIO Autonomous
Driving’s request, execute a series of written documents in substantially the same form and substance as that of the Controlling
Agreements (as amended from time to time).
I hereby further acknowledge, undertake and warrant that my spouse shall, in any circumstances (including but not limited to a
divorce between me and my spouse), have the right to dispose of the equity interests which he owns in NIO AI and the assets
corresponding thereto at his sole discretion, and that I will not take any action that may affect or interfere with my spouse’s performance
of his obligations under the Controlling Agreements (including but not limited to a claim for any equities of NIO AI or any rights which
are obtained through controlling contractual arrangement).
In the event of any dispute arising from the performance of this Consent Letter or in connection with this Consent Letter, either I or
any party having interest herein is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission
for arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of
three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of each party’s equities, assets, property interest or land assets
(including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the winding-up
of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in the course of forming
the tribunal, either I or the interested party shall have the right to file an application to any court with competent jurisdiction (including
courts in Hong Kong, Cayman Islands and places of incorporation of the interested party (namely Hefei, China) and places where either
my or the interested party’s main assets are located) for the grant of temporary reliefs. During the arbitration proceeding, this Consent
Letter shall continue to be valid except for the part which is disputed by either the interested party or me and pending for arbitration.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
(Signature Page of the Consent Letter)
By:
Name:
/s/ Weiyan PENG
Weiyan PENG
November 30, 2022
Shaoqing REN hereby agrees and accepts this Consent Letter:
/s/ Shaoqing REN
By:
Name: Shaoqing REN
NIO Inc.
/s/ Bin LI
By:
Name: Bin LI
Title:
Chairman
Anhui NIO Autonomous Driving Technology Co., Ltd. and Anhui NIO AI Technology Co., Ltd. hereby agree and acknowledge this
Consent Letter:
Anhui NIO Autonomous Driving Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title:
Legal Representative
Anhui NIO AI Technology Co., Ltd. (seal)
/s/ Lihong QIN
By:
Name: Lihong QIN
Title:
Legal Representative
Power of Attorney
Exhibit 4.55
The undersigned, Bin Li, a citizen of the People’s Republic of China (“China” or the “PRC”) whose Identification Card No. is
********, and a holder of 80% of the equity interests in Anhui NIO Data Technology Co., Ltd. (“Anhui NIO Data”) as of the date of
this Power of Attorney, hereby irrevocably authorize NIO Holding Co., Ltd. (NIO Holding) to exercise the following rights with respect
to all equity interests held by me now and in the future in Anhui NIO Data (“My Equity Interests”), during the term of this Power of
Attorney:
NIO Holding or the persons(s) designated by NIO Holding (including without limitation to the directors of NIO Holding and their
successors and any liquidator in replacement of such directors, but excluding any non-independent person or person that may cause
conflicts of interest) (the “Attorney-In-Fact ”) is hereby authorized, as my sole and exclusive agent with full authority, to act on behalf
of myself with respect to all matters concerning My Equity Interests, including without limitation to: 1) convening and attending
shareholders’ meetings of Anhui NIO Data; 2) filing all necessary documents with relevant company registry; 3) exercising all of the
shareholder’s rights and shareholder’s voting rights that I am entitled to under the laws of the PRC and the articles of association of
Anhui NIO Data, including without limitation to the right to receive dividends, sell or transfer or pledge or dispose of My Equity
Interests (in part or in whole); 4) representing myself in executing any resolutions and minutes and approving the amendments to the
articles of association as a shareholder of Anhui NIO Data on my behalf; and 5) nominating, appointing or removing on behalf of myself
the legal representative, directors, supervisors, general managers and other senior management members of Anhui NIO Data and filing a
lawsuit or taking other legal actions against such legal representative, directors, supervisors, general managers and other senior
management members of Anhui NIO Data when their actions harm the interests of Anhui NIO Data or its shareholders. Without written
consent by NIO Holding, I have no right to increase, decrease, transfer, re-pledge, or by any other manner to dispose of or change My
Equity Interests.
For the purpose of entrusting the rights under this Power of Attorney, NIO Holding or the person(s) designated by NIO Holding have the
right to know all kinds of relevant information including but not limited to the information about the corporate operation, business,
customers, finance, and employees of Anhui NIO Data, for which I shall provide appropriate assistance at request.
I, without the prior written consent of NIO Holding, will not directly or indirectly participate in, engage in, involve or own, or use any
information obtained from NIO Holding and Anhui NIO Data to participate in, engage in, involve or own any business that may compete
with NIO Holding, Anhui NIO Data or its affiliated companies or main businesses, nor will I hold any interests or gain benefits from any
business that may compete with NIO Holding, Anhui NIO Data or its affiliated companies or main businesses. For the avoidance of
doubt, this Power of Attorney shall not be considered an authorization for me or other non-independent persons or persons that may
cause conflicts of interest to exercise the rights conferred by this Power of Attorney.
If I become a person with no capacity for civil conduct or a person with limited capacity for civil conduct for any reason, all my
guardians shall continue to perform their duties and have their rights, provided that they shall covenant to continue to comply with the
terms of this Power of Attorney.
The Attorney-In-Fact shall have the right to, on behalf of myself, execute the Exclusive Option Agreement entered into by and among
NIO Holding, Anhui NIO Data and myself on December 12, 2022 and the Equity Pledge Agreement entered into by and among NIO
Holding, Anhui NIO Data and myself on December 12, 2022 (including any modification, amendment and restatement thereto,
collectively the “Transaction Documents”) and all the documents I shall sign as stipulated in the Transaction Documents, and to
perform the terms of the Transaction Documents as scheduled. The exercise of such right shall not constitute any restriction or limit on
the authority granted hereunder.
All the actions in terms of My Equity Interests conducted by the Attorney-In-Fact shall be deemed as my own actions, and all the
documents in terms of My Equity Interests executed by the Attorney-In-Fact shall be deemed to be executed by me, which I shall
acknowledge and ratify accordingly.
The Attorney-In-Fact have the right to re-authorize and may, at its own discretion, delegate its rights hereunder to other person or entity
in respect of the aforesaid matters without giving prior notice to me or obtaining my consent. The Attorney-In-Fact shall designate a PRC
citizen to exercise the aforementioned rights if so required by PRC laws.
Unless otherwise specified in this Power of Attorney, the Attorney-In-Fact has the right to allocate, use or otherwise dispose of cash
dividends and other non-cash proceeds generated from My Equity Interests in accordance with my oral or written instructions.
During the entire period when I am a shareholder of Anhui NIO Data, this Power of Attorney shall be irrevocable and continuously
effective and valid from the date of execution of this Power of Attorney.
In the event of any dispute arising from the performance of this Power of Attorney or in connection with this Power of Attorney, either
myself or the Attorney-In-Fact is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission
for arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of
three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of either my or the Attorney-In-Fact’s equities, assets,
property interest or land assets (including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or
assets), or propose the winding-up of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws.
In addition, in the course of forming the tribunal, either I or the Attorney-In-Fact shall have the right to file an application to any court
with competent jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of any party of the Attorney-In-
Fact (namely Hefei, China) and places where either my or the Attorney-In-Fact’s main assets are located) for the grant of temporary
reliefs. During the arbitration proceeding, this Power of Attorney shall continue to be valid except for the part which is disputed by either
the Attorney-In-Fact or me and pending for arbitration.
During the term of this Power of Attorney, I hereby waive all the rights associated with My Equity Interests, which have been authorized
to the Attorney-In-Fact through this Power of Attorney, and shall not exercise such rights by myself.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the Parties have caused their respective authorized representatives to execute this Power of Attorney on
December 12, 2022 with immediate effect.
Principal:
Bin LI
By:
/s/ Bin LI
Accepted by:
NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
/s/ Bin LI
Bin LI
Legal Representative
Acknowledged by:
Anhui NIO Data Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Yu QU
Yu QU
Legal Representative
Power of Attorney
The undersigned, Lihong Qin, a citizen of the People’s Republic of China (“China” or the “PRC”) whose Identification Card No. is
********, and a holder of 20% of the equity interests in Anhui NIO Data Technology Co., Ltd. (“Anhui NIO Data”) as of the date of
this Power of Attorney, hereby irrevocably authorize NIO Holding Co., Ltd. (NIO Holding) to exercise the following rights with respect
to all equity interests held by me now and in the future in Anhui NIO Data (“My Equity Interests”), during the term of this Power of
Attorney:
NIO Holding or the persons(s) designated by NIO Holding (including without limitation to the directors of NIO Holding, and their
successors and any liquidator in replacement of such directors, but excluding any non-independent person or person that may cause
conflicts of interest) (the “Attorney-In-Fact ”) is hereby authorized, as my sole and exclusive agent with full authority, to act on behalf
of myself with respect to all matters concerning My Equity Interests, including without limitation to: 1) convening and attending
shareholders’ meetings of Anhui NIO Data; 2) filing all necessary documents with relevant company registry; 3) exercising all of the
shareholder’s rights and shareholder’s voting rights that I am entitled to under the laws of the PRC and the articles of association of
Anhui NIO Data, including without limitation to the right to receive dividends, sell or transfer or pledge or dispose of My Equity
Interests (in part or in whole); 4) representing myself in executing any resolutions and minutes and approving the amendments to the
articles of association as a shareholder of Anhui NIO Data on my behalf; and 5) nominating, appointing or removing on behalf of myself
the legal representative, directors, supervisors, general managers and other senior management members of Anhui NIO Data and filing a
lawsuit or taking other legal actions against such legal representative, directors, supervisors, general managers and other senior
management members of Anhui NIO Data when their actions harm the interests of Anhui NIO Data or its shareholders. Without written
consent by NIO Holding, I have no right to increase, decrease, transfer, re-pledge, or by any other manner to dispose of or change My
Equity Interests.
For the purpose of entrusting the rights under this Power of Attorney, NIO Holding or the person(s) designated by NIO Holding have the
right to know all kinds of relevant information including but not limited to the information about the corporate operation, business,
customers, finance, and employees of Anhui NIO Data and have access to relevant information, for which I shall provide appropriate
assistance at request.
I, without the prior written consent of NIO Holding, will not directly or indirectly participate in, engage in, involve or own, or use any
information obtained from NIO Holding and Anhui NIO Data to participate in, engage in, involve or own any business that may compete
with NIO Holding, Anhui NIO Data or its affiliated companies or main businesses, nor will I hold any interests or gain benefits from any
business that may compete with NIO Holding, Anhui NIO Data or its affiliated companies or main businesses. For the avoidance of
doubt, this Power of Attorney shall not be considered an authorization for me or other non-independent persons or persons that may
cause conflicts of interest to exercise the rights conferred by this Power of Attorney.
If I become a person with no capacity for civil conduct or a person with limited capacity for civil conduct for any reason, all my
guardians shall continue to perform their duties and have their rights, provided that they shall covenant to continue to comply with the
terms of this Power of Attorney.
The Attorney-In-Fact shall have the right to, on behalf of myself, execute the Exclusive Option Agreement entered into by and among
NIO Holding, Anhui NIO Data and myself on December 12, 2022 and the Equity Pledge Agreement entered into by and among NIO
Holding, Anhui NIO Data and myself on December 12, 2022 (including any modification, amendment and restatement thereto,
collectively the “Transaction Documents”) and all the documents I shall sign as stipulated in the Transaction Documents, and to
perform the terms of the Transaction Documents as scheduled. The exercise of such right shall not constitute any restriction or limit on
the authority granted hereunder.
All the actions in terms of My Equity Interests conducted by the Attorney-In-Fact shall be deemed as my own actions, and all the
documents in terms of My Equity Interests executed by the Attorney-In-Fact shall be deemed to be executed by me, which I shall
acknowledge and ratify accordingly.
The Attorney-In-Fact have the right to re-authorize and may, at its own discretion, delegate its rights hereunder to other person or entity
in respect of the aforesaid matters without giving prior notice to me or obtaining my consent. The Attorney-In-Fact shall designate a PRC
citizen to exercise the aforementioned rights if so required by PRC laws.
Unless otherwise specified in this Power of Attorney, the Attorney-In-Fact has the right to allocate, use or otherwise dispose of cash
dividends and other non-cash proceeds generated from My Equity Interests in accordance with my oral or written instructions.
During the entire period when I am a shareholder of Anhui NIO Data, this Power of Attorney shall be irrevocable and continuously
effective and valid from the date of execution of this Power of Attorney.
In the event of any dispute arising from the performance of this Power of Attorney or in connection with this Power of Attorney, either
myself or the Attorney-In-Fact may submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of either my or the Attorney-In-Fact’s equities, assets,
property interests or land assets (including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or
assets), or propose the winding-up of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws.
In addition, in the course of forming the tribunal, either I or the Attorney-In-Fact shall have the right to file an application to any court
with competent jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of any party of the Attorney-In-
Fact (namely Hefei, China) and places where either my or the Attorney-In-Fact’s main assets are located) for the grant of temporary
reliefs. During the arbitration proceeding, this Power of Attorney shall continue to be valid except for the part which is disputed by either
the Attorney-In-Fact or me and pending for arbitration.
During the term of this Power of Attorney, I hereby waive all the rights associated with My Equity Interests, which have been authorized
to the Attorney-In-Fact through this Power of Attorney, and shall not exercise such rights by myself.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the Parties have caused their respective authorized representatives to execute this Power of Attorney on
December 12, 2022 with immediate effect.
Principal:
Lihong Qin
By:
/s/ Lihong Qin
Accepted by:
NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
/s/ Bin LI
Bin LI
Legal Representative
Acknowledged by:
Anhui NIO Data Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Yu QU
Yu QU
Legal Representative
Loan Agreement
Exhibit 4.56
This Loan Agreement (this “Agreement”) is made and entered into by and between the following parties on December 12, 2022
in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
NIO Holding Co., Ltd. (the “Lender”), a foreign-invested enterprise, organized and existing under the laws of the PRC, with its
registered address at West of Susong Road, North of Shenzhen Road, Economic and Technological Development Zone, Hefei, Anhui
Province; and
Lihong Qin (the “Borrower”), a citizen of China with ID card No.: ********.
In this Agreement, each of the Lender and the Borrower shall be hereinafter referred to as a “Party” respectively, and as the “Parties”
collectively.
Whereas:
A. Anhui NIO Data Technology Co., Ltd., (the “Borrower Company”) is a limited liability company established in accordance with
the PRC laws and effectively continued with the registered capital of RMB 100,000,000. The Borrower is a shareholder of the
Borrower Company and holds 20% of the equity interests, representing RMB 20,000,000 in the registered capital of the Borrower
Company. All of the equity interest now and hereafter held by the Borrower in the Borrower Company shall be referred to as the
“Borrower Equity Interest”; and
B. The Lender acknowledges that it agrees to provide the Borrower with a loan in the aggregate amount of RMB 20,000,000 to be used
for the purposes set forth in this Agreement.
Accordingly, through friendly consultation, the Parties agree as follows:
1
Loan
1.1
In accordance with the terms of this Agreement, the Lender agrees to provide to the Borrower a loan in the aggregate
amount of RMB 20,000,000 (the “Loan”). The term of the Loan shall be from the effective date hereof until the
Lender exercises its exclusive right to purchase pursuant to the Exclusive Option Agreement (as defined below). Upon
the occurrence of any of the following circumstances, the term of the Loan shall accelerate and the Borrower shall
immediately repay the Loan:
1.1.1
Thirty (30) days elapsed after a written notice from the Lender requesting repayment of the Loan;
1.1.2
The Borrower’s death, lack, or limitation of civil capacity;
1.1.3
The Borrower ceases (for any reason) to be a shareholder of the Borrower Company or its affiliates, and the
Borrower is not an employee of the Lender, the Borrower Company or their affiliates;
1.1.4
The Borrower engages in criminal act or is involved in criminal activities;
1.1.5
According to the applicable laws of China, foreign investors are permitted to invest in the core business that is
currently conducted by the Borrower Company in China, with a controlling stake or in the form of wholly
foreign-owned enterprises, the competent government authorities of China begin to approve such investments,
and the Lender decides to exercise the exclusive option under the Exclusive Option Agreement (the
“Exclusive Option Agreement”) entered into by the Lender, the Borrower and the Borrower Company on
December 12, 2022; or the Borrower or the Borrower Company has violated or committed a breach of its
representations, warranties, covenants or other obligations under the Exclusive Option Agreement;
1.1.6
The Borrower Company failed to obtain or renew any governmental approval or license necessary for the
operation of its core business.
Without the Lender’s prior written consent, the Borrower shall not transfer the rights and obligations under this
Agreement to any other persons.
The Borrower agrees to accept the aforementioned Loan provided by the Lender, and hereby agrees and undertakes to
use the Loan for the contribution of the registered capital of the Borrower Company. Without the Lender’s prior written
consent, the Borrower shall not use the Loan for any purpose other than as set forth herein.
The Lender and the Borrower hereby agree and confirm that the Borrower shall repay the Loan only through the
following means (or other means approved by the Lender): by transferring the Borrower Equity Interest in whole to the
Lender or the Lender’s designated person (legal person or natural person) pursuant to the Lender’s exercise of its right
to acquire the Borrower Equity Interest under the Exclusive Option Agreement, and any proceeds from the transfer of
the Borrower Equity Interest (to the extent permitted by the applicable laws) shall be used by the Borrower to repay the
Loan (principal and any interest thereon) to the Lender or the Lender’s designated person in accordance with this
Agreement and the Exclusive Option Agreement and in the manner designated by the Lender.
The Lender and the Borrower hereby agree and confirm that to the extent permitted by the applicable laws, the Lender
shall have the right (but not the obligation) to purchase or designate any other person (legal person or natural person) to
purchase the Borrower Equity Interest in part or in whole at any time, at the price stipulated in the Exclusive Option
Agreement.
1.2
1.3
1.4
1.5
1.6
When the Borrower transfers the Borrower Equity Interest to the Lender or the Lender’s designated person, in the
event that the transfer price of such Borrower Equity Interest equals to or is lower than the principal of the Loan under
this Agreement, the Loan under this Agreement shall be deemed an interest-free loan; in the event that the transfer
price of such Borrower Equity Interest exceeds the principal of the Loan under this Agreement, the excess over the
principal shall be deemed the interest of the Loan under this Agreement, and all of such interest shall be repaid by the
Borrower to the Lender. When the Lender or the Lender’s designated person obtains all the Borrower Equity Interest
(subject to the AMR registration) and/or the Borrower repays the Loan principal and any interest thereon (if applicable)
to the Lender according to this Agreement and the Exclusive Option Agreement, the Borrower is deemed to have fully
performed its repayment obligations under this Agreement.
2
Representations and Warranties
2.1
The Lender hereby makes the following representations and warranties to the Borrower at the execution date of this
Agreement:
2.1.1
The Lender is a company legally organized and effectively existing in accordance with the laws of China;
2.1.2
The Lender has the legal capacity to execute this Agreement. The execution and performance by the Lender of
this Agreement do not violate the Lender’s business scope and the Lender’s articles of association or other
organizational documents, and the Lender has obtained all necessary and proper approvals and authorizations
for the execution and performance of this Agreement; and
2.1.3
This Agreement, once signed, constitutes the Lender’s legal, valid, and binding obligations enforceable in
accordance with its terms.
2.2
The Borrower hereby makes the following representations and warranties to the Lender at the execution date of this
Agreement:
2.2.1
The Borrower is a natural person with full civil capacity.
2.2.2
The Borrower has the legal capacity to execute and perform this Agreement. The execution and performance
by the Borrower of this Agreement do not violate the Borrower’s business scope and the Borrower’s articles
of association or other organizational documents, and the Borrower has obtained all necessary and proper
approvals and authorizations for the execution and performance of this Agreement;
2.2.3
This Agreement, once signed, constitutes the Borrower’s legal, valid, and binding obligations enforceable in
accordance with its terms; and
2.2.4
There are no disputes, litigations, arbitrations, administrative proceedings, or any other legal proceedings
relating to the Borrower, nor are there any potential disputes, litigations, arbitrations, administrative
proceedings, or any other legal proceedings relating to the Borrower.
3
Borrower’s Covenants
3.1
As a shareholder of the Borrower Company, the Borrower irrevocably covenants that during the term of this
Agreement, the Borrower shall cause the Borrower Company:
3.1.1
3.1.2
3.1.3
3.1.4
to strictly abide by the provisions of the Exclusive Option Agreement to which the Borrower Company is a
party, and to refrain from any action or omission that may affect the effectiveness and enforceability of the
Exclusive Option Agreement;
at the request of the Lender (or any other person designated by the Lender), to execute the
contracts/agreements on business cooperation with the Lender (or any other person designated by the Lender),
and to strictly abide by such contracts/agreements;
to provide the Lender with all of the information on the Borrower Company’s business operations and
financial condition at the Lender’s request;
to immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration, or
administrative proceedings relating to the Borrower Company’s assets, business, or income; and
3.1.5
to appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender.
3.2
The Borrower covenants that during the term of this Agreement, he/she shall:
3.2.1
3.2.2
endeavor to keep the Borrower Company to be engaged in its core business and the specific business scope is
subject to that provided in its business license;
abide by the provisions of this Agreement, the Equity Pledge Agreement attached herein as Exhibit I (the
“Equity Pledge Agreement”) and the Exclusive Option Agreement to which the Borrower is a party,
practically perform the obligations under this Agreement, the Equity Pledge Agreement and the Exclusive
Option Agreement, and refrain from any action/omission that may affect the effectiveness and enforceability
of this Agreement, the Equity Pledge Agreement and the Exclusive Option Agreement;
3.2.3
not sell, transfer, mortgage or dispose of in any other manner the legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, except in accordance with the
Equity Pledge Agreement;
3.2.4
3.2.5
3.2.6
3.2.7
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, without the prior written consent of
the Lender, except to the Lender or the Lender’s designated person;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
merger or consolidation of the Borrower Company with any person, or its acquisition of or investment in any
person, without the prior written consent of the Lender;
immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the Borrower Equity Interest;
to the extent necessary to maintain the ownership of the Borrower Equity Interest, execute all necessary or
appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate
complaints or raise necessary and appropriate defense against all claims;
3.2.8
without the prior written consent of the Lender, refrain from any action/omission that may have a material
impact on the assets, business and liabilities of the Borrower Company;
3.2.9
appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender;
3.2.10
3.2.11
to the extent permitted by the laws of China, at the request of the Lender at any time, promptly and
unconditionally transfer all of the Borrower Equity Interest to the Lender or the Lender’s designated person at
any time, and ensure the other shareholders of the Borrower Company to waive their right of first refusal with
respect to the share transfer described in this Article;
to the extent permitted by the laws of China, at the request of the Lender at any time, ensure that the other
shareholders of the Borrower Company shall promptly and unconditionally transfer all of their equity interests
in the Borrower Company to the Lender or the Lender’s designated person at any time, and the Borrower
hereby waives his right of first refusal (if any) with respect to the equity transfer by such other shareholders
described in this Article;
3.2.12
in the event that the Lender purchases the Borrower Equity Interest from the Borrower in accordance with the
provisions of the Exclusive Option Agreement, use such purchase price obtained thereby to repay the Loan to
the Lender; and
3.2.13 without the prior written consent of the Lender, not cause the Borrower Company to supplement, change, or
amend its articles of association in any manner, increase or decrease its registered capital or change its share
capital structure in any manner.
4
Liability for Default
4.1
4.2
4.3
If the Borrower materially breaches any provision under this Agreement, the Lender is entitled to terminate this
Agreement immediately after delivering a written notice to the Borrower and the Borrower shall compensate all the
losses suffered by the Lender as a result of the Borrower’s default or early termination of this Agreement. The
remedies set out in this Article 4.1 are not exclusive remedies and shall not prejudice any other remedies of the Lender
under this Agreement or the applicable laws.
The Borrower shall not have any right to terminate this Agreement unilaterally in any event unless otherwise required
by the applicable laws.
In the event that the Borrower fails to perform the repayment obligations set forth in this Agreement, the Borrower
shall pay an overdue interest of 0.01% per day for the outstanding payment, until the day the Borrower repays all the
amounts (including overdue interests).
5
Notices
5.1
All notices and other communications required to be given pursuant to this Agreement or otherwise given in
connection with this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, commercial
courier service, facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be
sent by email. The dates on which notices shall be deemed to have been effectively served shall be determined as
follows:
5.1.1
5.1.2
5.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date
of signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the
date on the registered letter receipt; or
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the
date indicated on the fax transmission record.
5.2
For the purpose of notice, the addresses of the Parties are as follows:
Lender:
Address:
Attn:
Borrower:
Address:
Attn:
NIO Holding Co., Ltd.
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Lei Liu
Lihong Qin
********
Lihong Qin
Borrower Company:
Address:
Attn:
Anhui NIO Data Technology Co., Ltd.
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Aiyong Cai
5.3
Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of
this Section.
6
Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are confidential
information. Both Parties shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that:
(a) is in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels
or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed
disclosure of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
7
Governing Law and Disputes Resolution
7.1
7.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the laws of the PRC.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of all the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of all the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition,
in the course of forming the tribunal, both Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of all the Parties (namely
Hefei, China)) and places where the principal assets of either Party are located) for the grant of temporary reliefs.
7.3
During the arbitration, except for the matters under dispute and pending for arbitration, the parties shall continue to
exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
8
Miscellaneous
8.1
8.2
8.3
8.4
8.5
8.6
This Agreement shall become effective upon execution by the Parties, and shall expire upon the date of full
performance by the Parties of their respective obligations under this Agreement.
This Agreement shall be written in Chinese in two copies. The Lender and the Borrower shall hold one copy
respectively and each shall have equal legal validity as this Agreement.
Any amendment and supplement to this Agreement shall be made in writing by the Parties to this Agreement. Any
amendment agreement and supplementary agreement duly executed by the Parties hereto with regard to this Agreement
shall constitute an integral part of this Agreement, and shall have equal legal validity as this Agreement.
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in
any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good
faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the
greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions
shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.
Attachments of this Agreement (if any) shall constitute an integral part of this Agreement, and shall have equal legal
validity as this Agreement.
Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this
Agreement shall survive the expiration or early termination thereof. The provisions under Articles 4, 6, 7 and 8.6
herein of this Agreement shall survive the expiration or termination of this Agreement.
(The remainder of this page is intentionally left blank, signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Loan Agreement as of the date first
written above, which will take effect in accordance with the provisions of this Agreement.
Lender: NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/Bin Li
Bin Li
Legal Representative
December 12, 2022
Borrower: Lihong Qin
By:
Date:
/s/ Lihong Qin
December 12, 2022
Exhibit I – Equity Pledge Agreement
Loan Agreement
This Loan Agreement (this “Agreement”) is made and entered into by and between the following parties on December 12, 2022
in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
NIO Holding Co., Ltd. (the “Lender”), a foreign-invested enterprise, organized and existing under the laws of the PRC, with its
registered address at West of Susong Road, North of Shenzhen Road, Economic and Technological Development Zone, Hefei, Anhui
Province; and
Bin Li (the “Borrower”), a citizen of China with ID card No.: ********.
In this Agreement, each of the Lender and the Borrower shall be hereinafter referred to as a “Party” respectively, and as the “Parties”
collectively.
Whereas:
A. Anhui NIO Data Technology Co., Ltd., (the “Borrower Company”) is a limited liability company established in accordance with
the PRC laws and effectively continued with the registered capital of RMB 100,000,000. The Borrower is a shareholder of the
Borrower Company and holds 80% of the equity interests, representing RMB 80,000,000 in the registered capital of the Borrower
Company. All of the equity interest now and hereafter held by the Borrower in the Borrower Company shall be referred to as the
“Borrower Equity Interest”; and
B. The Lender acknowledges that it agrees to provide the Borrower with a loan in the aggregate amount of RMB 80,000,000 to be used
for the purposes set forth in this Agreement.
Accordingly, through friendly consultation, the Parties agree as follows:
1
Loan
1.1
In accordance with the terms of this Agreement, the Lender agrees to provide to the Borrower a loan in the aggregate
amount of RMB 80,000,000 (the “Loan”). The term of the Loan shall be from the effective date hereof until the
Lender exercises its exclusive right to purchase pursuant to the Exclusive Option Agreement (as defined below). Once
the occurrence of any of the following circumstances, the term of the Loan shall accelerate and the Borrower shall
immediately repay the Loan:
1.1.1
Thirty (30) days elapsed after a written notice from the Lender requesting repayment of the Loan;
1.1.2
The Borrower’s death, lack, or limitation of civil capacity;
1.1.3
The Borrower ceases (for any reason) to be a shareholder of the Borrower Company or its affiliates, and the
Borrower is not an employee of the Lender, the Borrower Company or their affiliates;
1.1.4
The Borrower engages in criminal act or is involved in criminal activities;
1.1.5
According to the applicable laws of China, foreign investors are permitted to invest in the core business that is
currently conducted by the Borrower Company in China, with a controlling stake or in the form of wholly
foreign-owned enterprises, the competent government authorities of China begin to approve such investments,
and the Lender decides to exercise the exclusive option under the Exclusive Option Agreement (the
“Exclusive Option Agreement”) entered into by the Lender, the Borrower and the Borrower Company on
December 12, 2022; or the Borrower or the Borrower Company has violated or committed a breach of its
representations, warranties, covenants or other obligations under the Exclusive Option Agreement;
1.1.6
The Borrower Company failed to obtain or renew any governmental approval or license necessary for the
operation of its core business.
Without the Lender’s prior written consent, the Borrower shall not transfer the rights and obligations under this
Agreement to any other persons.
The Borrower agrees to accept the aforementioned Loan provided by the Lender, and hereby agrees and undertakes to
use the Loan for the contribution of the registered capital of the Borrower Company. Without the Lender’s prior written
consent, the Borrower shall not use the Loan for any purpose other than as set forth herein.
The Lender and the Borrower hereby agree and confirm that the Borrower shall repay the Loan only through the
following means (or other means approved by the Lender): by transferring the Borrower Equity Interest in whole to the
Lender or the Lender’s designated person (legal person or natural person) pursuant to the Lender’s exercise of its right
to acquire the Borrower Equity Interest under the Exclusive Option Agreement, and any proceeds from the transfer of
the Borrower Equity Interest (to the extent permitted by the applicable laws) shall be used by the Borrower to repay the
Loan (principal and any interest thereon) to the Lender or the Lender’s designated person in accordance with this
Agreement and the Exclusive Option Agreement and in the manner designated by the Lender.
The Lender and the Borrower hereby agree and confirm that to the extent permitted by the applicable laws, the Lender
shall have the right (but not the obligation) to purchase or designate any other person (legal person or natural person) to
purchase the Borrower Equity Interest in part or in whole at any time, at the price stipulated in the Exclusive Option
Agreement.
1.2
1.3
1.4
1.5
1.6
When the Borrower transfers the Borrower Equity Interest to the Lender or the Lender’s designated person, in the
event that the transfer price of such Borrower Equity Interest equals to or is lower than the principal of the Loan under
this Agreement, the Loan under this Agreement shall be deemed an interest-free loan; in the event that the transfer
price of such Borrower Equity Interest exceeds the principal of the Loan under this Agreement, the excess over the
principal shall be deemed the interest of the Loan under this Agreement, and all of such interest shall be repaid by the
Borrower to the Lender. When the Lender or the Lender’s designated person obtains all the Borrower Equity Interest
(subject to the AMR registration) and/or the Borrower repays the Loan principal and any interest thereon (if applicable)
to the Lender according to this Agreement and the Exclusive Option Agreement, the Borrower is deemed to have fully
performed its repayment obligations under this Agreement.
2
Representations and Warranties
2.1
The Lender hereby makes the following representations and warranties to the Borrower at the execution date of this
Agreement:
2.1.1
The Lender is a company legally organized and effectively existing in accordance with the laws of China;
2.1.2
The Lender has the legal capacity to execute this Agreement. The execution and performance by the Lender of
this Agreement do not violate the Lender’s business scope and the Lender’s articles of association or other
organizational documents, and the Lender has obtained all necessary and proper approvals and authorizations
for the execution and performance of this Agreement; and
2.1.3
This Agreement, once signed, constitutes the Lender’s legal, valid, and binding obligations enforceable in
accordance with its terms.
2.2
The Borrower hereby makes the following representations and warranties to the Lender at the execution date of this
Agreement:
2.2.1
The Borrower is a natural person with full civil capacity.
2.2.2
2.2.3
2.2.4
The Borrower has the legal capacity to execute and perform this Agreement. The execution and performance
by the Borrower of this Agreement do not violate the Borrower’s business scope and the Borrower’s articles
of association or other organizational documents, and the Borrower has obtained all necessary and proper
approvals and authorizations for the execution and performance of this Agreement;
This Agreement, once signed, constitutes the Borrower’s legal, valid, and binding obligations enforceable in
accordance with its terms; and
There are no disputes, litigations, arbitrations, administrative proceedings, or any other legal proceedings
relating to the Borrower, nor are there any potential disputes, litigations, arbitrations, administrative
proceedings, or any other legal proceedings relating to the Borrower.
3
Borrower’s Covenants
3.1
As a shareholder of the Borrower Company, the Borrower irrevocably covenants that during the term of this
Agreement, the Borrower shall cause the Borrower Company:
3.1.1
3.1.2
3.1.3
3.1.4
to strictly abide by the provisions of the Exclusive Option Agreement to which the Borrower Company is a
party, and to refrain from any action or omission that may affect the effectiveness and enforceability of the
Exclusive Option Agreement;
at the request of the Lender (or any other person designated by the Lender), to execute the
contracts/agreements on business cooperation with the Lender (or any other person designated by the Lender),
and to strictly abide by such contracts/agreements;
to provide the Lender with all of the information on the Borrower Company’s business operations and
financial condition at the Lender’s request;
to immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration, or
administrative proceedings relating to the Borrower Company’s assets, business, or income; and
3.1.5
to appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender.
3.2
The Borrower covenants that during the term of this Agreement, he/she shall:
3.2.1
3.2.2
3.2.3
3.2.4
endeavor to keep the Borrower Company to be engaged in its core business and the specific business scope is
subject to that provided in its business license;
abide by the provisions of this Agreement, the Equity Pledge Agreement attached herein as Exhibit I (the
“Equity Pledge Agreement”) and the Exclusive Option Agreement to which the Borrower is a party,
practically perform the obligations under this Agreement, the Equity Pledge Agreement and the Exclusive
Option Agreement, and refrain from any action/omission that may affect the effectiveness and enforceability
of this Agreement, the Equity Pledge Agreement and the Exclusive Option Agreement;
not sell, transfer, mortgage or dispose of in any other manner the legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, except in accordance with the
Equity Pledge Agreement;
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the Borrower
Equity Interest, or allow the encumbrance thereon of any security interest, without the prior written consent of
the Lender, except to the Lender or the Lender’s designated person;
3.2.5
3.2.6
3.2.7
ensure any shareholders’ meeting and/or the board of directors of the Borrower Company not to approve the
merger or consolidation of the Borrower Company with any person, or its acquisition of or investment in any
person, without the prior written consent of the Lender;
immediately notify the Lender of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the Borrower Equity Interest;
to the extent necessary to maintain the ownership of the Borrower Equity Interest, execute all necessary or
appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate
complaints or raise necessary and appropriate defense against all claims;
3.2.8
without the prior written consent of the Lender, refrain the Borrower from any action/omission that may have
a material impact on the assets, business and liabilities of the Borrower Company;
3.2.9
appoint any designee of the Lender as the director of the Borrower Company at the request of the Lender;
3.2.10
3.2.11
to the extent permitted by the laws of China, at the request of the Lender at any time, promptly and
unconditionally transfer all of the Borrower Equity Interest to the Lender or the Lender’s designated person at
any time, and ensure the other shareholders of the Borrower Company to waive their right of first refusal with
respect to the share transfer described in this Article;
to the extent permitted by the laws of China, at the request of the Lender at any time, ensure that the other
shareholders of the Borrower Company shall promptly and unconditionally transfer all of their equity interests
in the Borrower Company to the Lender or the Lender’s designated person at any time, and the Borrower
hereby waives his right of first refusal (if any) with respect to the equity transfer by such other shareholders
described in this Article;
3.2.12
in the event that the Lender purchases the Borrower Equity Interest from the Borrower in accordance with the
provisions of the Exclusive Option Agreement, use such purchase price obtained thereby to repay the Loan to
the Lender; and
3.2.13 without the prior written consent of the Lender, not cause the Borrower Company to supplement, change, or
amend its articles of association in any manner, increase or decrease its registered capital or change its share
capital structure in any manner.
4
Liability for Default
4.1
4.2
4.3
If the Borrower materially breaches any provision under this Agreement, the Lender is entitled to terminate this
Agreement immediately after delivering a written notice to the Borrower and the Borrower shall compensate all the
losses suffered by the Lender as a result of the Borrower’s default or early termination of this Agreement. The
remedies set out in this Article 4.1 are not exclusive remedies and shall not prejudice any other remedies of the Lender
under this Agreement or the applicable laws.
The Borrower shall not have any right to terminate this Agreement unilaterally in any event unless otherwise required
by the applicable laws.
In the event that the Borrower fails to perform the repayment obligations set forth in this Agreement, the Borrower
shall pay an overdue interest of 0.01% per day for the outstanding payment, until the day the Borrower repays all the
amounts (including overdue interests).
5
Notices
5.1
All notices and other communications required to be given pursuant to this Agreement or otherwise given in
connection with this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, commercial
courier service, facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be
sent by email. The dates on which notices shall be deemed to have been effectively served shall be determined as
follows:
5.1.1
5.1.2
5.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date
of signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the
date on the registered letter receipt; or
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the
date indicated on the fax transmission record.
5.2
For the purpose of notice, the addresses of the Parties are as follows:
Lender:
Address:
Attn:
Borrower:
Address:
Attn:
NIO Holding Co., Ltd.
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Lei Liu
Bin Li
********
Bin Li
Borrower Company:
Address:
Attn:
Anhui NIO Data Technology Co., Ltd.
Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Aiyong Cai
5.3
Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of
this Section.
6
Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are confidential
information. Both Parties shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that:
(a) is in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels
or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed
disclosure of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
7
Governing Law and Disputes Resolution
7.1
7.2
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the
resolution of disputes hereunder shall be governed by the laws of the PRC.
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement,
either Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal
shall consist of three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the
respondent shall respectively appoint one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators through negotiations or designated by Shanghai International Economic and Trade Arbitration Commission.
The arbitration proceedings shall be conducted in Chinese in a confidential manner. The arbitration award shall be final
and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal or arbitrators may award
compensation, injunctive relief in respect of all the Parties’ equities, assets, property interest or land assets (including
restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of all the Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition,
in the course of forming the tribunal, both Parties shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of all the Parties (namely
Hefei, China)) and places where the principal assets of either Party are located) for the grant of temporary reliefs.
7.3
During the arbitration, except for the matters under dispute and pending for arbitration, the parties shall continue to
exercise their respective rights under this Agreement and shall continue to perform their respective obligations under
this Agreement, except for those parts of the Agreement.
8
Miscellaneous
8.1
8.2
8.3
8.4
8.5
8.6
This Agreement shall become effective upon execution by the Parties, and shall expire upon the date of full
performance by the Parties of their respective obligations under this Agreement.
This Agreement shall be written in Chinese in two copies. The Lender and the Borrower shall hold one copy
respectively and each shall have equal legal validity as this Agreement.
Any amendment and supplement to this Agreement shall be made in writing by the Parties to this Agreement. Any
amendment agreement and supplementary agreement duly executed by the Parties hereto with regard to this Agreement
shall constitute an integral part of this Agreement, and shall have equal legal validity as this Agreement.
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in
any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good
faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the
greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions
shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.
Attachments of this Agreement (if any) shall constitute an integral part of this Agreement, and shall have equal legal
validity as this Agreement.
Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this
Agreement shall survive the expiration or early termination thereof. The provisions under Articles 4, 6, 7 and 8.6
herein of this Agreement shall survive the expiration or termination of this Agreement.
(The remainder of this page is intentionally left blank, signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Loan Agreement as of the date first
written above, which will take effect in accordance with the provisions of this Agreement.
Lender: NIO Holdings Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/Bin Li
Bin Li
Legal Representative
December 12, 2022
Borrower: Bin Li
By:
Date:
/s/Bin Li
December 12, 2022
Exhibit I – Equity Pledge Agreement
Equity Pledge Agreement
Exhibit 4.57
This Equity Pledge Agreement (this “Agreement”) is made and entered into by and between the following parties on December 12, 2022
in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Party A: NIO Holding Co., Ltd. (hereinafter the “Pledgee”)
Address: West of Susong Road, North of Shenzhen Road, Economic and Technological Development Zone, Hefei, Anhui Province
Party B: Bin Li (hereinafter the “Pledgor”)
Address: ********
Party C: Anhui NIO Data Technology Co., Ltd
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
In this Agreement, each of the Pledgee, the Pledgor and Party C shall be hereinafter referred to as a “Party” respectively, and as the
“Parties” collectively.
Whereas,
(1)
(2)
(3)
The Pledgor is a citizen of China with ID card No.:********, who as of the date hereof holds 80% of the equity interests of
Party C, representing RMB 80,000,000 in the registered capital of Party C. Party C is a limited liability company registered in
Hefei, China, and engaged in data technology business. Party C hereby acknowledges the respective rights and obligations of
the Pledgor and the Pledgee under this Agreement, and intends to provide any necessary assistance in registering the Pledge;
The Pledgee is a foreign-invested enterprise registered in China. The Pledgee and Party C have executed an Exclusive
Business Cooperation Agreement (as defined below); Party C, the Pledgee and the Pledgor have executed an Exclusive Option
Agreement (as defined below); the Pledgee and the Pledgor have executed a Loan Agreement (as defined below); and the
Pledgor has executed a Power of Attorney (as defined below) in favor of the Pledgee;
To ensure that Party C and the Pledgor fully perform their obligations under the Exclusive Business Cooperation Agreement,
the Exclusive Option Agreement, the Load Agreement and the Power of Attorney, the Pledgor hereby pledges to the Pledgee
all of the equity interest that the Pledgor holds in Party C as security for the performance by Party C and the Pledgor of their
obligations under the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Loan Agreement and
the Power of Attorney.
To perform the provisions of the Transaction Documents (as defined below), the Parties have mutually agreed to execute this Agreement
upon the following terms.
Article 1 Definitions
Unless otherwise provided in this Agreement, the terms below shall have the following meanings:
1.1
Pledge: shall refer to the security interest granted by the Pledgor to the Pledgee pursuant to Article 2 of this Agreement,
which means the right of the Pledgee to be paid in priority with the Pledged Equity Interest based on the monetary valuation
that such Pledged Equity Interest is converted into or from the proceeds from the auction or sale of the Pledged Equity
Interest pledged by the Pledgor to the Pledgee.
1.2
Pledged Equity Interest: shall refer to 80% equity interests in Party C currently held by the Pledgor, representing
RMB80,000,000 in the registered capital of Party C, and all of the equity interest hereafter held by the Pledgor in Party C.
1.3
Term of the Pledge: shall refer to the term set forth in Article 3 of this Agreement.
1.4
1.5
1.6
Transaction Documents: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and
the Pledgee on December 12, 2022 (the “Exclusive Business Cooperation Agreement”), the Loan Agreement executed by
and between the Pledgee and the Pledgor on December 12, 2022 (the “Loan Agreement”), the Exclusive Option Agreement
executed by and among Party C, the Pledgee and the Pledgor on December 12, 2022 (the “Exclusive Option Agreement”),
the Power of Attorney executed on December 12, 2022 by the Pledgor (the “Power of Attorney”) and any modification,
amendment and/or restatement to the aforementioned documents.
Contract Obligations: shall refer to all the obligations of the Pledgor under the Exclusive Option Agreement, the Loan
Agreement, the Power of Attorney and this Agreement; all the obligations of Party C under the Exclusive Business
Cooperation Agreement, the Exclusive Option Agreement and this Agreement.
Secured Debts: shall refer to all the direct, indirect and derivative losses and losses of anticipated profits, suffered by the
Pledgee, incurred as a result of any Event of Default on the part of the Pledgor and/or Party C. The amount of such losses
shall be calculated based on such factors as the reasonable business plan and profit forecast of the Pledgee, the service fees
payable by Party C under the Exclusive Business Cooperation Agreement, the amount of loans repayable by the Pledgor
under the Loan Agreement and all expenses occurred by the Pledgee in connection with enforcement of the Pledgor’s and/or
Party C’s Contract Obligations. The guaranteed amount is RMB 80,000,000.
1.7
Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.
1.8
Notice of Default: shall refer to the notice issued by the Pledgee in accordance with this Agreement declaring an Event of
Default.
Article 2 Pledge
2.1
2.2
2.3
2.4
The Pledgor hereby agrees to pledge all the Pledged Equity Interest as security for performance of the Contract Obligations
and payment of the Secured Debts under this Agreement. Party C hereby agrees that the Pledgor pledges the Pledged Equity
Interest to the Pledgee pursuant to this Agreement.
During the Term of the Pledge, the Pledgee is entitled to receive dividends distributed on the Pledged Equity Interest.
Without the prior written consent of the Pledgee, the Pledgor shall not receive dividends distributed on the Pledged Equity
Interest. Dividends received by the Pledgor on the Pledged Equity Interest after the deduction of individual income tax paid
by the Pledgor shall be, as required by the Pledgee, (1) deposited into an account designated and supervised by the Pledgee
and used to secure the Contract Obligations and pay the Secured Debts prior and in preference to making any other payment;
or (2) to the extent not prohibited by the applicable PRC laws, unconditionally donated to the Pledgee or any other person
designated by the Pledgee.
The Pledgor may subscribe for a capital increase in Party C only with prior written consent of the Pledgee. Any additional
equity interest obtained by the Pledgor as a result of the Pledgor’s subscription of the increased registered capital of Party C
shall also be deemed as Pledged Equity Interest, and the Parties shall enter into further equity pledge agreement for this
purpose and complete registration of the pledge of such additional equity interest.
In the event that Party C is required by the PRC law to be liquidated or dissolved, any interest distributed to the Pledgor
upon Party C’s dissolution or liquidation shall, upon the request of the Pledgee, be (1) deposited into an account designated
and supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured Debts prior and in preference
to make any other payment; or (2) to the extent not prohibited by the PRC laws, unconditionally donated to the Pledgee or
any other person designated by the Pledgee.
Article 3 Term of the Pledge
3.1
The Pledge shall become effective from the date that the Pledged Equity Interest under this Agreement has been registered
with the relevant administration for market regulation (“AMR”). The Pledge shall remain effective until (1) all Contract
Obligations have been fully performed and all Secured Debts has been fully paid, or (2) the Pledgee and/or the designated
person, subject to the PRC laws, decide to purchase the entire equity interests of Party C held by the Pledgor in accordance
with the Exclusive Option Agreement, and such equity interest of Party C has been transferred to the Pledgee and/or the
designated person in accordance with the laws, and the Pledgee and the designated person can legally engage in the business
of Party C. The Pledgor and Party C shall (i) register the Pledge in the shareholders’ register of Party C within 3 business
days following the execution of this Agreement, and (ii) submit an application to the relevant AMR for the registration of the
Pledge under this Agreement within 30 business days following the execution of this Agreement. The Parties covenant that
for the purpose of registration of the Pledge, the parties hereto and all other shareholders of Party C shall submit to AMR
this Agreement or an equity pledge agreement in the form required by the AMR at the location of Party C which shall truly
reflect the information of the Pledge hereunder (the “AMR Pledge Agreement”). For matters not specified in the AMR
Pledge Agreement, the Parties shall be bound by the provisions of this Agreement. The Pledgor and Party C shall submit all
necessary documents and complete all necessary procedures, as required by the relevant PRC laws and regulations and the
competent AMR, to ensure that the Pledge shall be registered with the AMR as soon as possible after submission for filing.
3.2
During the Term of the Pledge, in the event that the Pledgor and/or Party C fails to perform the Contract Obligations or pay
Secured Debts, the Pledgee shall have the right, but not the obligation, to exercise the Pledge in accordance with the
provisions of this Agreement.
Article 4 Custody of Pledge Certificates
4.1
During the Term of the Pledge set forth in this Agreement, the Pledgor shall deliver to the Pledgee for custody the certificate
of Pledgor’s capital contribution in Party C and the register of shareholders recording the Pledge within one week from the
execution of this Agreement. The Pledgee shall have custody of such documents during the entire Term of the Pledge set
forth in this Agreement.
Article 5 Representations and Warranties of the Pledgor and Party C
As of the execution date of this Agreement, the Pledgor and Party C hereby jointly and severally represent and warrant to the
Pledgee that:
5.1
The Pledgor is the sole legal and beneficial owner of the Pledged Equity Interest;
5.2
The Pledgee shall have the right to dispose of and transfer the Pledged Equity Interest in accordance with the provisions set
forth in this Agreement.
5.3
Except for the Pledge, the Pledgor has not placed any security interest or other encumbrance on the Pledged Equity Interest.
5.4
5.5
The Pledgor and Party C have obtained approvals and consents from the government authorities and third parties (if
required) for the execution, delivery and performance of this Agreement.
The execution, delivery and performance of this Agreement will not: (i) violate any relevant PRC laws; (ii) conflict with
Party C’s articles of association or other constitutional documents; (iii) result in any breach of or constitute any default under
any contract or document to which it is a party or by which it is otherwise bound; (iv) result in any violation of any condition
for the grant and/or maintenance of any permit or approval granted to any Party; or (v) cause any permit or approval granted
to any Party to be suspended, cancelled or attached with additional conditions.
Article 6 Covenants of the Pledgor and Party C
6.1
During the term of this Agreement, the Pledgor and Party C hereby jointly and severally covenant to the Pledgee:
6.1.1
6.1.2
The Pledgor shall not transfer the Pledged Equity Interest, place or permit the existence of any security interest or
other encumbrance on the Pledged Equity Interest or any portion thereof, without the prior written consent of the
Pledgee, except for the performance of the Transaction Documents;
The Pledgor and Party C shall comply with and carry out all requirements under applicable laws and regulations
relating to pledge, and within five (5) days of receipt of any notice, order or recommendation issued or made by the
competent authorities regarding the Pledge, shall present the aforementioned notice, order or recommendation to the
Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections and
representations with respect to the aforementioned matters upon the Pledgee’s reasonable request or upon consent of
the Pledgee;
6.1.3
Each of the Pledgor and Party C shall promptly notify the Pledgee of any event or notice received by it that may
have an impact on the Pledged Equity Interest (or any portion thereof,) as well as any event or notice received by it
that may have an impact on any guarantees and obligations of the Pledgor under this Agreement or the performance
of obligations of the Pledgor under this Agreement;
6.1.4
Party C shall complete the registration procedures for the extension of the operation term within three (3) months
prior to the expiration of such term to maintain the validity of this Agreement.
The Pledgor agrees that the rights acquired by the Pledgee in accordance with this Agreement with respect to the Pledge
shall not be interrupted or harmed by the Pledgor or any successors, heirs or representatives of the Pledgor or any other
persons through any legal proceedings.
To protect or perfect the security interest granted by this Agreement for the Contract Obligations and Secured Debts, the
Pledgor hereby undertakes to execute in good faith and to cause other parties who have an interest in the Pledge to execute
all certificates, deeds and/or covenants required by the Pledgee. The Pledgor also undertakes to perform and to cause other
parties who have an interest in the Pledge to perform actions required by the Pledgee, to facilitate the exercise by the Pledgee
of its rights and authority granted thereto by this Agreement, and to enter into all relevant documents regarding ownership of
the Pledged Equity Interest with the Pledgee or designee(s) of the Pledgee (natural persons/legal persons). The Pledgor
undertakes to provide the Pledgee within a reasonable time with all notices, the orders and decisions regarding the Pledge
that are required by the Pledgee.
6.2
6.3
6.4
The Pledgor hereby undertakes to comply with and perform all guarantees, promises, agreements, representations and
conditions under this Agreement. In the event of failure or partial performance of its guarantees, promises, agreements,
representations and conditions, the Pledgor shall indemnify the Pledgee for all losses resulting therefrom.
Article 7 Event of Breach
7.1
The following circumstances shall be deemed an Event of Default:
7.1.1
The Pledgor’s any breach to any obligations under the Transaction Documents and/or this Agreement;
7.1.2
Party C’s any breach to any obligations under the Transaction Documents and/or this Agreement.
7.2
7.3
Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances
described in Article 7.1, the Pledgor and Party C shall immediately notify the Pledgee in writing accordingly.
Unless an Event of Default set forth in Article 7.1 has been successfully resolved to the Pledgee’s satisfaction within twenty
(20) days after the Pledgee delivers a notice to the Pledgor and/or Party C requesting ratification of such Event of Default,
the Pledgee may issue a Notice of Default to the Pledgor in writing at any time thereafter, demanding to immediately
exercise the Pledge in accordance with the provisions of Article 8 of this Agreement.
Article 8 Exercise of the Pledge
8.1
The Pledgee shall issue a written Notice of Default to the Pledgor when it exercises the Pledge.
8.2
8.3
8.4
Subject to Article 7.3, the Pledgee may exercise the right to enforce the Pledge at any time after the issuance of the Notice of
Default in accordance with Article 8.1. The Pledgor shall cease to own any rights or interests related to the Pledged Equity
Interest once the Pledgee decides to exercise the right to enforce the Pledge.
After the Pledgee issues a Notice of Default to the Pledgor in accordance with Article 8.1, the Pledgee may exercise any
remedial measure under the applicable PRC laws, the Transaction Documents and this Agreement, including but not limited
to being paid in priority with the Pledged Equity Interest based on the monetary valuation that such Pledged Equity Interest
is converted into or from the proceeds from the auction or sale of the Pledged Equity Interest. The Pledgee shall not be liable
for any loss incurred by its duly exercise of such rights and powers.
The proceeds from the exercise of the Pledge by the Pledgee shall be used to pay for the taxes and expenses incurred as a
result of disposing the Pledged Equity Interest and to perform the Contract Obligations and pay the Secured Debts to the
Pledgee prior and in preference to any other payment. After the payment of the aforementioned amounts, the remaining
balance (if any) shall be returned to the Pledgor or any other person who have rights to such balance under relevant laws and
regulations or be deposited to the local notary public office where the Pledgor resides, with all expenses incurred being
borne by the Pledgor. To the extent permitted by the applicable PRC laws, the Pledgor shall unconditionally donate the
aforementioned proceeds to the Pledgee or any other person designated by the Pledgee.
8.5
The Pledgee may exercise any remedy measure available to it simultaneously or in any order. The Pledgee may exercise the
priority right in compensation based on the monetary valuation that such Pledged Equity Interest is converted into or with
the proceeds from the auction or sale of the Pledged Equity Interest under this Agreement, without being required to exercise
any other remedy measure first.
8.6
The Pledgee is entitled to designate an attorney or other representatives to exercise the Pledge on its behalf, and the Pledgor
or Party C shall not raise any objection to such exercise.
8.7 When the Pledgee disposes of the Pledge in accordance with this Agreement, the Pledgor and Party C shall provide the
necessary assistance to enable the Pledgee to enforce the Pledge.
Article 9 Breach of Agreement
9.1
9.2
If the Pledgor or Party C materially breaches any provision under this Agreement, the Pledgee is entitled to terminate this
Agreement and/or require the Pledgor or Party C to compensate the losses. This Article shall not prejudice any other rights
of the Pledgee under this Agreement.
The Pledgor or Party C shall not have any right to terminate this Agreement unilaterally in any event unless otherwise
required by the applicable laws.
Article 10 Assignment
10.1 Without the Pledgee’s prior written consent, neither the Pledgor nor Party C shall grant or assign its/his rights and
obligations under this Agreement.
10.2 This Agreement shall be binding on the Pledgor and his/her successors and permitted assignees, and shall be valid with
respect to the Pledgee and each of its successors and assignees.
10.3 At any time, the Pledgee may assign any and all of its rights and obligations under the Transaction Documents and this
Agreement to its designee(s), in which case the assignees shall have the rights and obligations of the Pledgee under the
Transaction Documents and this Agreement, as if it were the original party to the Transaction Documents and this
Agreement.
10.4
In the event of change of the Pledgee due to assignment, the Pledgor and/or Party C shall, at the request of the Pledgee,
execute a new equity pledge agreement with the new pledgee on the same terms and conditions as this Agreement, and
register the same with the competent AMR.
10.5 The Pledgor and Party C shall strictly abide by the provisions of this Agreement and other contracts jointly or separately
executed by the Parties hereto or any of them, including the Transaction Documents, perform the obligations hereunder and
thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. Any remaining
rights of the Pledgor with respect to the Pledged Equity Interest hereunder shall not be exercised by the Pledgor except in
accordance with the written instructions of the Pledgee.
Article 11 Termination
11.1 Upon the fulfillment of all Contract Obligations and the full payment of all Secured Debts by the Pledgor and Party C, the
Pledgee shall release the Pledge under this Agreement upon the Pledgor’s request as soon as reasonably practicable and shall
assist the Pledgor in de-registering the Pledge from the register of shareholders of Party C and with the competent AMR.
11.2 The provisions under Articles 9, 13, 14 and 11.2 herein of this Agreement shall survive the expiration or termination of this
Agreement.
Article 12 Handling Fees and Other Expenses
All fees and actual expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and
any other taxes and fees, shall be borne by Party C.
Article 13 Confidentiality
The Parties acknowledge and confirm that the existence and the content of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is
or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or
financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure
of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
Article 14 Governing Law and Disputes Resolution
14.1 The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the resolution
of disputes hereunder shall be governed by the PRC laws.
14.2
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either
Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration
in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of
three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively
appoint one arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or
designated by Shanghai International Economic and Trade Arbitration Commission. The arbitration proceedings shall be
conducted in Chinese in a confidential manner. The arbitration award shall be final and binding upon the parties thereto.
Under appropriate circumstances, the arbitration tribunal or arbitrators may award compensation, injunctive relief in respect
of the Parties’ equities, assets, property interest or land assets (including restriction on conduct of business, restriction or
prohibition of transfer or sale of equities or assets), or propose the winding-up of the Parties in accordance with the dispute
resolution clause and/or applicable PRC laws. In addition, in the course of forming the tribunal, the Parties shall have the
right to file an application to any court with competent jurisdiction (including courts in Hong Kong, Cayman Islands and
places of incorporation of the Parties (namely Hefei, China)) and places where the principal assets of either Party are
located) for the grant of temporary reliefs.
14.3 During the arbitration, except for the matters under dispute and pending for arbitration, the Parties shall continue to exercise
their respective rights under this Agreement and perform their respective obligations under this Agreement.
Article 15 Notices
15.1 All notices and other communications required or given pursuant to this Agreement shall be delivered personally or sent by
registered mail, postage prepaid or by commercial courier service or facsimile transmission to the address of such Party set
forth below. Each such notice shall also be resent by email. The date on which such notices shall be deemed to have been
effectively served shall be determined as follows:
15.1.1 Notices given by personal delivery (including express mail service) shall be deemed effectively given on the day
when an acknowledgement of receipt thereof is signed;
15.1.2 Notices given by registered mail (postage prepaid) shall be deemed effectively given on the 15th day after the date
of the return receipt thereof.
15.1.3 Notices given by facsimile transmission shall be deemed effectively given on the date of transmission as shown on
the facsimile, provided that, if such facsimile is given after 5pm or on a non-business day at the place of receipt, it
shall be deemed given on the business day immediately following the transmission date shown on such facsimile.
15.2 For the purpose of notices, the addresses of the parties are as follows:
Party A:
Address:
Attn:
Party B:
Address:
Attn:
Party C:
Address:
Attn:
NIO Holdings Co., Ltd.
NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Lei LIU
Bin LI
********
Bin LI
Anhui NIO Data Technology Co., Ltd
NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Aiyong CAI
15.3 Any party may at any time change its address for receiving notices by a notice delivered to the other party in accordance
with the terms hereof.
Article 16 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect in
accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall
not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the
Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid,
illegal or unenforceable provisions.
Article 17 Attachments
The attachments set forth herein shall be an integral part of this Agreement.
Article 18 Effectiveness
18.1 This Agreement shall become effective upon execution by the Parties.
18.2 Any amendment, supplement and change to this Agreement shall be made in writing by all of the Parties and take effects
after they are executed or stamped by all Parties hereunder and governmental registration procedures (if necessary) are
completed.
Article 19 Counterparts
This Agreement is written in Chinese in four copies. The Pledgor, the Pledgee and Party C shall hold one copy respectively and the
other copy shall be used for registration.
(The remainder of this page is intentionally left blank. signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Pledge Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/Bin Li
Bin Li
Legal Representative
December 12, 2022
Party B: Bin Li
By:
Date:
/s/Bin Li
December 12, 2022
Party C: Anhui NIO Data Technology Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/ Yu QU
Yu QU
Legal Representative
December 12, 2022
Exhibits:
1. Register of Shareholders of Party C;
2. Capital Contribution Certificate of Party C;
3. Exclusive Business Cooperation Agreement;
4. Exclusive Option Agreement;
5. Loan Agreement;
6. Power of Attorney
Equity Pledge Agreement
This Equity Pledge Agreement (this “Agreement”) is made and entered into by and between the following parties on December 12, 2022
in Shanghai, the People’s Republic of China (“China” or the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan Region of the People’s Republic of China).
Party A: NIO Holding Co., Ltd. (hereinafter the “Pledgee”)
Address: West of Susong Road, North of Shenzhen Road, Economic and Technological Development Zone, Hefei, Anhui Province
Party B: Lihong Qin (hereinafter the “Pledgor”)
Address: ********
Party C: Anhui NIO Data Technology Co., Ltd
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
In this Agreement, each of the Pledgee, the Pledgor and Party C shall be hereinafter referred to as a “Party” respectively, and as the
“Parties” collectively.
Whereas,
(1)
(2)
(3)
The Pledgor is a citizen of China with ID card No.:********, who as of the date hereof holds 20% of the equity interests of
Party C, representing RMB 20,000,000 in the registered capital of Party C. Party C is a limited liability company registered in
Hefei, China, and engaged in data technology business. Party C hereby acknowledges the respective rights and obligations of
the Pledgor and the Pledgee under this Agreement, and intends to provide any necessary assistance in registering the Pledge;
The Pledgee is a foreign-invested enterprise registered in China. The Pledgee and Party C have executed an Exclusive
Business Cooperation Agreement (as defined below); Party C, the Pledgee and the Pledgor have executed an Exclusive Option
Agreement (as defined below); the Pledgee and the Pledgor have executed a Loan Agreement (as defined below); and the
Pledgor has executed a Power of Attorney (as defined below) in favor of the Pledgee;
To ensure that Party C and the Pledgor fully perform their obligations under the Exclusive Business Cooperation Agreement,
the Exclusive Option Agreement, the Load Agreement and the Power of Attorney, the Pledgor hereby pledges to the Pledgee
all of the equity interest that the Pledgor holds in Party C as security for the performance by Party C and the Pledgor of their
obligations under the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Loan Agreement and
the Power of Attorney. To perform the provisions of the Transaction Documents (as defined below), the Parties have mutually
agreed to execute this Agreement upon the following terms.
Article 1 Definitions
Unless otherwise provided in this Agreement, the terms below shall have the following meanings:
1.1
Pledge: shall refer to the security interest granted by the Pledgor to the Pledgee pursuant to Article 2 of this Agreement,
which means the right of the Pledgee to be paid in priority with the Pledged Equity Interest based on the monetary valuation
that such Pledged Equity Interest is converted into or from the proceeds from the auction or sale of the Pledged Equity
Interest pledged by the Pledgor to the Pledgee.
1.2
Pledged Equity Interest: shall refer to 20% equity interests in Party C currently held by the Pledgor, representing RMB
20,000,000 in the registered capital of Party C, and all of the equity interest hereafter held by the Pledgor in Party C.
1.3
Term of the Pledge: shall refer to the term set forth in Article 3 of this Agreement.
1.4
1.5
1.6
Transaction Documents: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and
the Pledgee on December 12, 2022 (the “Exclusive Business Cooperation Agreement”), the Loan Agreement executed by
and between the Pledgee and the Pledgor on December 12, 2022 (the “Loan Agreement”), the Exclusive Option Agreement
executed by and among Party C, the Pledgee and the Pledgor on December 12, 2022 (the “Exclusive Option Agreement”),
the Power of Attorney executed on December 12, 2022 by the Pledgor (the “Power of Attorney”) and any modification,
amendment and/or restatement to the aforementioned documents.
Contract Obligations: shall refer to all the obligations of the Pledgor under the Exclusive Option Agreement, the Loan
Agreement, the Power of Attorney and this Agreement; all the obligations of Party C under the Exclusive Business
Cooperation Agreement, the Exclusive Option Agreement and this Agreement.
Secured Debts: shall refer to all the direct, indirect and derivative losses and losses of anticipated profits, suffered by the
Pledgee, incurred as a result of any Event of Default on the part of the Pledgor and/or Party C. The amount of such losses
shall be calculated based on such factors as the reasonable business plan and profit forecast of the Pledgee, the service fees
payable by Party C under the Exclusive Business Cooperation Agreement, the amount of loans repayable by the Pledgor
under the Loan Agreement and all expenses occurred by the Pledgee in connection with enforcement of the Pledgor’s and/or
Party C’s Contract Obligations. The guaranteed amount is RMB 20,000,000.
1.7
Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.
1.8
Notice of Default: shall refer to the notice issued by the Pledgee in accordance with this Agreement declaring an Event of
Default.
Article 2 Pledge
2.1
2.2
2.3
2.4
The Pledgor hereby agrees to pledge all the Pledged Equity Interest as security for performance of the Contract Obligations
and payment of the Secured Debts under this Agreement. Party C hereby agrees that the Pledgor pledges the Pledged Equity
Interest to the Pledgee pursuant to this Agreement.
During the Term of the Pledge, the Pledgee is entitled to receive dividends distributed on the Pledged Equity Interest.
Without the prior written consent of the Pledgee, the Pledgor shall not receive dividends distributed on the Pledged Equity
Interest. Dividends received by the Pledgor on the Pledged Equity Interest after the deduction of individual income tax paid
by the Pledgor shall be, as required by the Pledgee, (1) deposited into an account designated and supervised by the Pledgee
and used to secure the Contract Obligations and pay the Secured Debts prior and in preference to making any other payment;
or (2) to the extent not prohibited by the applicable PRC laws, unconditionally donated to the Pledgee or any other person
designated by the Pledgee.
The Pledgor may subscribe for a capital increase in Party C only with prior written consent of the Pledgee. Any additional
equity interest obtained by the Pledgor as a result of the Pledgor’s subscription of the increased registered capital of Party C
shall also be deemed as Pledged Equity Interest, and the Parties shall enter into further equity pledge agreement for this
purpose and complete registration of the pledge of such additional equity interest.
In the event that Party C is required by the PRC law to be liquidated or dissolved, any interest distributed to the Pledgor
upon Party C’s dissolution or liquidation shall, upon the request of the Pledgee, be (1) deposited into an account designated
and supervised by the Pledgee and used to secure the Contract Obligations and pay the Secured Debts prior and in preference
to make any other payment; or (2) to the extent not prohibited by the PRC laws, unconditionally donated to the Pledgee or
any other person designated by the Pledgee.
Article 3 Term of the Pledge
3.1
The Pledge shall become effective from the date that the Pledged Equity Interest under this Agreement has been registered
with the relevant administration for market regulation (“AMR”). The Pledge shall remain effective until (1) all Contract
Obligations have been fully performed and all Secured Debts has been fully paid, or (2) the Pledgee and/or the designated
person shall, subject to the PRC laws, decide to purchase the entire equity interests of Party C held by the Pledgors in
accordance with the Exclusive Option Agreement, and such equity interests of Party C has been transferred to the Pledgee
and/or the designated person in accordance with the laws, and the Pledgee and the designated person can legally engage in
the business of Party C. The Pledgor and Party C shall (i) register the Pledge in the shareholders’ register of Party C within 3
business days following the execution of this Agreement, and (ii) submit an application to the relevant AMR for the
registration of the Pledge under this Agreement within 30 business days following the execution of this Agreement. The
Parties covenant that for the purpose of registration of the Pledge, the parties hereto and all other shareholders of Party C
shall submit to AMR this Agreement or an equity pledge agreement in the form required by the AMR at the location of Party
C which shall truly reflect the information of the Pledge hereunder (the “AMR Pledge Agreement”). For matters not
specified in the AMR Pledge Agreement, the Parties shall be bound by the provisions of this Agreement. The Pledgor and
Party C shall submit all necessary documents and complete all necessary procedures, as required by the relevant PRC laws
and regulations and the competent AMR, to ensure that the Pledge shall be registered with the AMR as soon as possible after
submission for filing.
3.2
During the Term of the Pledge, in the event that the Pledgor and/or Party C fails to perform the Contract Obligations or pay
Secured Debts, the Pledgee shall have the right, but not the obligation, to exercise the Pledge in accordance with the
provisions of this Agreement.
Article 4 Custody of Pledge Certificates
4.1 During the Term of the Pledge set forth in this Agreement, the Pledgor shall deliver to the Pledgee for custody the certificate
of Pledgor’s capital contribution in Party C and the register of shareholders recording the Pledge within one week from the
execution of this Agreement. The Pledgee shall have custody of such documents during the entire Term of the Pledge set
forth in this Agreement.
Article 5 Representations and Warranties of the Pledgor and Party C
As of the execution date of this Agreement, the Pledgor and Party C hereby jointly and severally represent and warrant to the
Pledgee that:
5.1
The Pledgor is the sole legal and beneficial owner of the Pledged Equity Interest;
5.2
The Pledgee shall have the right to dispose of and transfer the Pledged Equity Interest in accordance with the provisions set
forth in this Agreement.
5.3
Except for the Pledge, the Pledgor has not placed any security interest or other encumbrance on the Pledged Equity Interest.
5.4
5.5
The Pledgor and Party C have obtained approvals and consents from the government authorities and third parties (if
required) for the execution, delivery and performance of this Agreement.
The execution, delivery and performance of this Agreement will not: (i) violate any relevant PRC laws; (ii) conflict with
Party C’s articles of association or other constitutional documents; (iii) result in any breach of or constitute any default under
any contract or document to which it is a party or by which it is otherwise bound; (iv) result in any violation of any condition
for the grant and/or maintenance of any permit or approval granted to any Party; or (v) cause any permit or approval granted
to any Party to be suspended, cancelled or attached with additional conditions.
Article 6 Covenants of the Pledgor and Party C
6.1 During the term of this Agreement, the Pledgor and Party C hereby jointly and severally covenant to the Pledgee:
6.1.1
6.1.2
The Pledgor shall not transfer the Pledged Equity Interest, place or permit the existence of any security interest or
other encumbrance on the Pledged Equity Interest or any portion thereof, without the prior written consent of the
Pledgee, except for the performance of the Transaction Documents;
The Pledgor and Party C shall comply with and carry out all requirements under applicable laws and regulations
relating to pledge, and within five (5) days of receipt of any notice, order or recommendation issued or made by the
competent authorities regarding the Pledge, shall present the aforementioned notice, order or recommendation to the
Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections and
representations with respect to the aforementioned matters upon the Pledgee’s reasonable request or upon consent of
the Pledgee;
6.1.3
Each of the Pledgor and Party C shall promptly notify the Pledgee of any event or notice received by it that may
have an impact on the Pledged Equity Interest (or any portion thereof,) as well as any event or notice received by it
that may have an impact on any guarantees and obligations of the Pledgor under this Agreement or the performance
of obligations of the Pledgor under this Agreement;
6.1.4
Party C shall complete the registration procedures for the extension of the operation term within three (3) months
prior to the expiration of such term to maintain the validity of this Agreement.
The Pledgor agrees that the rights acquired by the Pledgee in accordance with this Agreement with respect to the Pledge
shall not be interrupted or harmed by the Pledgor or any successors, heirs or representatives of the Pledgor or any other
persons through any legal proceedings.
To protect or perfect the security interest granted by this Agreement for the Contract Obligations and Secured Debts, the
Pledgor hereby undertakes to execute in good faith and to cause other parties who have an interest in the Pledge to execute
all certificates, deeds and/or covenants required by the Pledgee. The Pledgor also undertakes to perform and to cause other
parties who have an interest in the Pledge to perform actions required by the Pledgee, to facilitate the exercise by the Pledgee
of its rights and authority granted thereto by this Agreement, and to enter into all relevant documents regarding ownership of
the Pledged Equity Interest with the Pledgee or designee(s) of the Pledgee (natural persons/legal persons). The Pledgor
undertakes to provide the Pledgee within a reasonable time with all notices, the orders and decisions regarding the Pledge
that are required by the Pledgee.
6.2
6.3
6.4
The Pledgor hereby undertakes to comply with and perform all guarantees, promises, agreements, representations and
conditions under this Agreement. In the event of failure or partial performance of its guarantees, promises, agreements,
representations and conditions, the Pledgor shall indemnify the Pledgee for all losses resulting therefrom.
Article 7 Event of Breach
7.1
The following circumstances shall be deemed an Event of Default:
7.1.1
The Pledgor’s any breach to any obligations under the Transaction Documents and/or this Agreement;
7.1.2
Party C’s any breach to any obligations under the Transaction Documents and/or this Agreement.
7.2 Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances
described in Article 7.1, the Pledgor and Party C shall immediately notify the Pledgee in writing accordingly.
7.3 Unless an Event of Default set forth in Article 7.1 has been successfully resolved to the Pledgee’s satisfaction within twenty
(20) days after the Pledgee delivers a notice to the Pledgor and/or Party C requesting ratification of such Event of Default,
the Pledgee may issue a Notice of Default to the Pledgor in writing at any time thereafter, demanding to immediately
exercise the Pledge in accordance with the provisions of Article 8 of this Agreement.
Article 8 Exercise of the Pledge
8.1
The Pledgee shall issue a written Notice of Default to the Pledgor when it exercises the Pledge.
8.2
Subject to Article 7.3, the Pledgee may exercise the right to enforce the Pledge at any time after the issuance of the Notice of
Default in accordance with Article 8.1. The Pledgor shall cease to own any rights or interests related to the Pledged Equity
Interest once the Pledgee decides to exercise the right to enforce the Pledge.
8.3 After the Pledgee issues a Notice of Default to the Pledgor in accordance with Article 8.1, the Pledgee may exercise any
remedial measure under the applicable PRC laws, the Transaction Documents and this Agreement, including but not limited
to being paid in priority with the Pledged Equity Interest based on the monetary valuation that such Pledged Equity Interest
is converted into or from the proceeds from the auction or sale of the Pledged Equity Interest. The Pledgee shall not be liable
for any loss incurred by its duly exercise of such rights and powers.
8.4
The proceeds from the exercise of the Pledge by the Pledgee shall be used to pay for the taxes and expenses incurred as a
result of disposing the Pledged Equity Interest and to perform the Contract Obligations and pay the Secured Debts to the
Pledgee prior and in preference to any other payment. After the payment of the aforementioned amounts, the remaining
balance (if any) shall be returned to the Pledgor or any other person who have rights to such balance under relevant laws and
regulations or be deposited to the local notary public office where the Pledgor resides, with all expenses incurred being
borne by the Pledgor. To the extent permitted by the applicable PRC laws, the Pledgor shall unconditionally donate the
aforementioned proceeds to the Pledgee or any other person designated by the Pledgee.
8.5 The Pledgee may exercise any remedy measure available to it simultaneously or in any order. The Pledgee may exercise the
priority right in compensation based on the monetary valuation that such Pledged Equity Interest is converted into or with the
proceeds from the auction or sale of the Pledged Equity Interest under this Agreement, without being required to exercise any
other remedy measure first.
8.6
The Pledgee is entitled to designate an attorney or other representatives to exercise the Pledge on its behalf, and the Pledgor
or Party C shall not raise any objection to such exercise.
8.7 When the Pledgee disposes of the Pledge in accordance with this Agreement, the Pledgor and Party C shall provide the
necessary assistance to enable the Pledgee to enforce the Pledge.
Article 9 Breach of Agreement
9.1
If the Pledgor or Party C materially breaches any provision under this Agreement, the Pledgee is entitled to terminate this
Agreement and/or require the Pledgor or Party C to compensate the losses. This Article shall not prejudice any other rights
of the Pledgee under this Agreement.
9.2
The Pledgor or Party C shall not have any right to terminate this Agreement unilaterally in any event unless otherwise
required by the applicable laws.
Article 10 Assignment
10.1 Without the Pledgee’s prior written consent, neither the Pledgor nor Party C shall grant or assign its/his rights and
obligations under this Agreement.
10.2 This Agreement shall be binding on the Pledgor and his/her successors and permitted assignees, and shall be valid with
respect to the Pledgee and each of his/her successors and assignees.
10.3 At any time, the Pledgee may assign any and all of its rights and obligations under the Transaction Documents and this
Agreement to its designee(s), in which case the assignees shall have the rights and obligations of the Pledgee under the
Transaction Documents and this Agreement, as if it were the original party to the Transaction Documents and this
Agreement.
10.4 In the event of change of the Pledgee due to assignment, the Pledgor and/or Party C shall, at the request of the Pledgee,
execute a new equity pledge agreement with the new pledgee on the same terms and conditions as this Agreement, and
register the same with the competent AMR.
10.5 The Pledgor and Party C shall strictly abide by the provisions of this Agreement and other contracts jointly or separately
executed by the Parties hereto or any of them, including the Transaction Documents, perform the obligations hereunder and
thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. Any remaining
rights of the Pledgor with respect to the Pledged Equity Interest hereunder shall not be exercised by the Pledgor except in
accordance with the written instructions of the Pledgee.
Article 11 Termination
11.1 Upon the fulfillment of all Contract Obligations and the full payment of all Secured Debts by the Pledgor and Party C, the
Pledgee shall release the Pledge under this Agreement upon the Pledgor’s request as soon as reasonably practicable and shall
assist the Pledgor in de-registering the Pledge from the register of shareholders of Party C and with the competent AMR.
11.2 The provisions under Articles 9, 13, 14 and 11.2 herein of this Agreement shall survive the expiration or termination of this
Agreement.
Article 12 Handling Fees and Other Expenses
All fees and actual expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and
any other taxes and fees, shall be borne by Party C.
Article 13 Confidentiality
The Parties acknowledge and confirm that the existence and the content of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is
or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or
financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure
of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
Article 14 Governing Law and Disputes Resolution
14.1 The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the resolution
of disputes hereunder shall be governed by the PRC laws.
14.2
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either
Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration
in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of
three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively
appoint one arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or
designated by Shanghai International Economic and Trade Arbitration Commission. The arbitration proceedings shall be
conducted in Chinese in a confidential manner. The arbitration award shall be final and binding upon the parties thereto.
Under appropriate circumstances, the arbitration tribunal or arbitrators may award compensation, injunctive relief in respect
of the Parties’ equities, assets, property interest or land assets (including restriction on conduct of business, restriction or
prohibition of transfer or sale of equities or assets), or propose the winding-up of the Parties in accordance with the dispute
resolution clause and/or applicable PRC laws. In addition, in the course of forming the tribunal, the Parties shall have the
right to file an application to any court with competent jurisdiction (including courts in Hong Kong, Cayman Islands and
places of incorporation of the Parties (namely Hefei, China)) and places where the principal assets of either Party are
located) for the grant of temporary reliefs.
14.3 During the arbitration, except for the matters under dispute and pending for arbitration, the Parties shall continue to exercise
their respective rights under this Agreement and perform their respective obligations under this Agreement.
Article 15 Notices
15.1 All notices and other communications required or given pursuant to this Agreement shall be delivered personally or sent by
registered mail, postage prepaid or by commercial courier service or facsimile transmission to the address of such Party set
forth below. Each such notice shall also be resent by email. The date on which such notices shall be deemed to have been
effectively served shall be determined as follows:
15.1.1 Notices given by personal delivery (including express mail service) shall be deemed effectively given on the day
when an acknowledgement of receipt thereof is signed;
15.1.2 Notices given by registered mail (postage prepaid) shall be deemed effectively given on the 15th day after the date
of the return receipt thereof.
15.1.3 Notices given by facsimile transmission shall be deemed effectively given on the date of transmission as shown on
the facsimile, provided that, if such facsimile is given after 5pm or on a non-business day at the place of receipt, it
shall be deemed given on the business day immediately following the transmission date shown on such facsimile.
15.2 For the purpose of notices, the addresses of the Parties are as follows:
Party A:
Address:
Attn:
Party B:
Address:
Attn:
Party C:
Address:
Attn:
NIO Holding Co., Ltd.
NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Lei LIU
Lihong Qin
********
Lihong Qin
Anhui NIO Data Technology Co., Ltd
NIO Inc., Building 20, No. 56 Antuo Road, Jiading District, Shanghai
Aiyong CAI
15.3 Any party may at any time change its address for receiving notices by a notice delivered to the other party in accordance
with the terms hereof.
Article 16 Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect in
accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall
not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the
Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid,
illegal or unenforceable provisions.
Article 17 Attachments
The attachments set forth herein shall be an integral part of this Agreement.
Article 18 Effectiveness
18.1 This Agreement shall become effective upon execution by the Parties.
18.2 Any amendment, supplement and change to this Agreement shall be made in writing by all of the Parties and take effects
after they are executed or stamped by all Parties hereunder and governmental registration procedures (if necessary) are
completed.
Article 19 Counterparts
This Agreement is written in Chinese in four copies. The Pledgor, the Pledgee and Party C shall hold one copy respectively and the
other copy shall be used for registration.
(The remainder of this page is intentionally left blank. signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Pledge Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/ Bin Li
Bin Li
Legal Representative
December 12, 2022
Party B: Lihong Qin
By:
Date:
/s/ Lihong Qin
December 12, 2022
Party C: Anhui NIO Data Technology Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/ Yu QU
Yu QU
Legal Representative
December 12, 2022
Exhibits:
1. Register of Shareholders of Party C;
2. Capital Contribution Certificate of Party C;
3. Exclusive Business Cooperation Agreement;
4. Exclusive Option Agreement;
5. Loan Agreement;
6. Power of Attorney
Exclusive Business Cooperation Agreement
Exhibit 4.58
This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on
December 12, 2022, in Shanghai, the People’s Republic of China (the “PRC”, for the purpose of this Agreement, excluding Hong Kong
Special Administrative Region, Macao Special Administrative Region and Taiwan Region of the PRC).
Party A: NIO Holding Co., Ltd.
Address: West of Susong Road, North of Shenzhen Road, Economic and Technological Development Zone, Hefei, Anhui Province
Party B: Anhui NIO Data Technology Co., Ltd
Address: Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
(Each of Party A and Party B shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.)
Whereas,
(1) Party A is a foreign-invested enterprise established in China with the capability, experience and resources to provide investment and
management consulting services, as well as technology development, technical services and consultation in relation to new energy
automobile;
(2) Party B is a domestic company established in the PRC and is engaged in data technology activities. The businesses conducted by
Party B currently and at any time during the term of this Agreement are collectively referred to as the “Principal Business”;
(3) Party A is willing to provide Party B with technical support, consultation and other related services on an exclusive basis in relation
to the Principal Business during the term of this Agreement, utilizing its advantages in technology, personnel and information, and
Party B is willing to accept such services provided by Party A or Party A’s designee(s), each pursuant to the terms set forth herein.
Now, therefore, through mutual discussion, the Parties have reached the following agreements:
Article 1 Service Provision
1.1 Party B hereby appoints Party A and its affiliates as Party B’s exclusive services providers to provide Party B with comprehensive
technical support, consulting services and other related services during the term of this Agreement, in accordance with the terms
and conditions of this Agreement, including but not limited to the following services:
(1) Licensing Party B to use the relevant software legally owned by Party A and its affiliates;
(2) Development, maintenance and updating of the relevant application software necessary for Party B’s business;
(3) Design, installation, daily management, maintenance and updating of computer network system, hardware equipment and
database;
(4) Technical support and staff training for relevant employees of Party B;
(5) Assisting Party B in consulting, collection and research of relevant technology and market information (excluding market
research business that foreign-invested enterprises are restricted from conducting under PRC laws);
(6) Providing business management consultation for Party B;
(7) Providing marketing and promotional services for Party B;
(8) Developing and testing new products for party B;
(9) Leasing of equipment or properties; and
(10) Other related services requested by Party B from time to time to the extent permitted under PRC laws.
1.2 Party B agrees to accept all the services provided by Party A and its affiliates. Party B further agrees that unless with Party A’s prior
written consent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar services
provided by any third party and shall not establish any similar corporation relationship with any third party regarding the matters
contemplated by this Agreement. The Parties agree that Party A may designate other parties to provide Party B with the services
under this Agreement (the parties designated by Party A may enter into certain agreements described in Section 1.5 with Party B).
1.3 Party A is entitled to check Party B’s accounts periodically and at any time, and Party B shall keep its accounts accurately and in
due course, and provide the accounts to Party A upon its request. During the term of this agreement and without in violation of
applicable laws, Party B agrees to cooperate with Party A and Party A’s shareholders (directly or indirectly) over auditing
(including but not limited to related party transaction auditing and other various auditing) and provide related information and
materials about Party B’s and its subsidiaries’ operation, business, customers, finance and employees to Party A, Party A’s
shareholders and/or auditor engaged by them, and also agrees that Party A’s shareholders can disclose such information and
materials to satisfy the requirements of the securities regulation.
1.4 In case of liquidation or dissolution of Party B for various reasons, Party B shall, within the scope permitted by PRC laws, appoint
the persons recommended by Party A to form a liquidation team, which takes charge of managing the property of Party B and its
subsidiaries. Party B acknowledges that in case of liquidation or dissolution of Party B, Party B agrees to deliver all the remaining
property obtained from the liquidation of Party B conducted according to PRC laws and regulations to Party A, no matter whether
the provisions specified in this agreement have been implemented.
1.5 Service Providing Method
1.5.1
1.5.2
1.5.3
Party A and Party B agree that during the term of this Agreement, where necessary, Party B may enter into further service
agreements with Party A and its affiliates or any other party designated by Party A, which shall provide the specific
contents, methods, personnel, and fees for the specific services.
To better fulfill this Agreement, Party A and Party B agree that during the term of this Agreement, where necessary, Party B
may enter into equipment or property lease agreements with Party A and its affiliates or any other party designated by Party
A at any time which shall permit Party A and its affiliates or any other party designated by Party A to provide Party B with
relevant equipment or property based on the business needs of Party B.
Party B hereby grants to Party A and its affiliates an irrevocable and exclusive option to purchase from Party B, at Party A
and its affiliates’ sole discretion, any or all of the assets and business of Party B, to the extent permitted under the PRC laws,
and at the lowest purchase price permitted by the PRC laws. Both Parties shall then enter into a separate assets or business
transfer agreement, specifying the terms and conditions of the transfer of the assets.
Article 2 Price and Payment Method of the Service
2.1 The service fee hereunder shall consist of 100% of the total consolidated profits of Party B in any fiscal year, setting off the
accumulated deficit (if any) of Party B and its subsidiaries in the previous fiscal year and net of the working capital, expenses, taxes
and other statutory contributions required in any fiscal year. Notwithstanding the foregoing, Party A and its affiliates may, at its sole
discretion, adjust the coverage and amount of the service fee in accordance with the tax regulations and tax practices of the PRC
and by reference to Party B’s needs for working capitals, and Party B shall accept such adjustment.
2.2 Party A and its affiliates will provide invoice and calculate the service fee on a monthly basis. Party B shall pay the service fees to
the bank account designated by Party A within ten (10) business days upon the receipt of the invoice, and send the copy of the
payment voucher to Party A and its affiliates by fax or email within ten (10) business days after the payment. Party A and its
affiliates shall issue receipt within ten (10) business days upon receipt of the service fees. Notwithstanding the foregoing, Party A
and its affiliates may, at its discretion, adjust the time and method for payment of the service fee. Party B shall accept such
adjustment.
2.3 The Parties agree that, during the term of this Agreement, Party A or its affiliates will bear all economic losses (if any) arising from
Party B’s business. In the event that Party B encounters operating losses or serious operational difficulties, Party A or its affiliates
may provide any form of financial support to Party B to the extent permitted by law at that time; furthermore, Party A shall have the
right to decide at its sole discretion on whether Party B shall continue to operate, and Party B shall unconditionally recognize and
agree to Party A’s decision.
Article 3 Intellectual Property Rights and Confidentiality Clauses
3.1 Party A shall have sole and exclusive ownership, rights and interests in any and all intellectual properties or intangible assets arising
out of or created or developed during the performance of this Agreement by both Parties, including but not limited to copyrights,
patents, patent applications, software, technical secrets, trade secrets and others (to the extent not prohibited by PRC laws). Unless
expressly authorized by Party A, Party B is not entitled to any rights or interests in any intellectual property rights of Party A and its
affiliates which are used by Party A and its affiliates in providing the services pursuant to this Agreement. Party B shall execute all
appropriate documents, take all appropriate actions, submit all filings and/or applications, render all appropriate assistance and
otherwise conduct whatever is necessary as deemed by Party A at its sole discretion, for the purposes of vesting the ownership, right
or interest of any such intellectual property rights and intangible assets in Party A and its affiliates, and/or perfecting the protections
of any such intellectual property rights and intangible assets for Party A and its affiliates (including but not limited to registering
such intellectual property rights and intangible assets under Party A and its affiliates’ name).
3.2 The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is
or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or
financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure of
such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
4.1 Party A hereby represents, warrants and covenants as follows:
Article 4 Representations and Warranties
4.1.1
4.1.2
Party A is a foreign-invested enterprise legally established and validly existing in accordance with the PRC laws; Party A
or the service providers designated by Party A will obtain all government permits and licenses necessary for providing the
service under this Agreement before providing such services.
Party A has taken all necessary corporate actions, obtained all necessary authorizations as well as all consents and
approvals from third parties and government agencies (if required) for the execution, delivery and performance of this
Agreement; Party A’s execution, delivery and performance of this Agreement do not violate any explicit requirements
under any law or regulation.
4.1.3
This Agreement constitutes Party A’s legal, valid and binding obligations, enforceable against it in accordance with its
terms.
4.2 Party B hereby represents, warrants and covenants as follows:
4.2.1. Party B is a company legally established and validly existing in accordance with the PRC laws and has obtained and will
maintain all government permits and licenses necessary for engaging in the Principal Business.
4.2.2. Party B has taken all necessary corporate actions, obtained all necessary authorizations as well as all consents and
approvals from third parties and government agencies (if required) for the execution, delivery and performance of this
Agreement. Party B’s execution, delivery and performance of this Agreement do not violate any explicit requirements
under any law or regulation.
4.2.3. This Agreement constitutes Party B’s legal, valid and binding obligations, enforceable against it in accordance with its
terms.
Article 5 Term of Agreement
5.1 This Agreement shall become effective upon execution by the Parties. Unless terminated in accordance with the provisions of this
Agreement or terminated in writing by Party A, this Agreement shall remain effective permanently.
5.2 During the term of this Agreement, each Party shall timely renew its operation term prior to the expiration thereof, so as to enable
this Agreement to remain effective and enforceable. This Agreement shall be terminated upon the expiration of the operation term
of a Party if the application for the renewal of its operation term is not approved or agreed by the competent authorities.
5.3 The rights and obligations of the Parties under Articles 3, 6, 7 and this Article 5.3 shall survive the termination of this Agreement.
Article 6 Governing Law and Disputes Resolution
6.1 The execution, effectiveness, interpretation, performance and the resolution of disputes hereunder shall be governed by and
construed in accordance with the PRC laws.
6.2 In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either Party is
entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration in Shanghai in
accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three arbitrators to be
appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one arbitrator, and the
third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai International
Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential manner.
The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration tribunal
or arbitrators may award compensation, injunctive relief in respect of both Parties’ equities, assets, property interest or land assets
(including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of both Parties in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in the course
of forming the tribunal, both Parties shall have the right to file an application to any court with competent jurisdiction (including
courts in Hong Kong, Cayman Islands, places of incorporation of both Parties (namely Hefei, China) and places where the principal
assets of either party are located) for the grant of temporary reliefs.
6.3 During the arbitration, except for the matters under dispute and pending for arbitration, the Parties shall continue to exercise their
respective rights under this Agreement and perform their respective obligations under this Agreement.
Article 7 Breach of Agreement and Indemnification
7.1 If Party B materially breaches any provision under this Agreement, Party A is entitled to (1) terminate this Agreement and require
Party B to compensate all the losses; or (2) require specific performance of the obligations of Party B under this Agreement and
require Party B to compensate all the losses. This Article 7.1 shall not prejudice any other rights of Party A under this Agreement.
7.2 Unless otherwise required by the laws, Party B shall not unilaterally terminate this Agreement in any event.
7.3 Party B shall indemnify Party A and hold Party A harmless from any losses, damages, obligations or expenses caused by any
lawsuit, claims or other demands against Party A arising from or caused by the services provided by Party A to Party B pursuant
this Agreement, except where such losses, damages, obligations or expenses arise from the gross negligence or willful misconduct
of Party A.
Article 8 Force Majeure
8.1 In the case of any force majeure events (“Force Majeure”) such as earthquakes, typhoons, floods, fires, flu, wars, strikes or any
other events that cannot be predicted and are unpreventable and unavoidable by the affected Party, which causes the failure of either
Party to perform or completely perform this Agreement, the Party affected by such Force Majeure events shall not be liable for such
failure to perform or partial performance. However, the affected Party shall give the other Party written notices immediately without
any delay, and shall provide details evidencing such Force Majeure events within 15 days after sending out such notice, explaining
the reasons for such failure of, partial or delay of performance.
8.2 If such Party claiming Force Majeure fails to notify the other Party and furnish it with proof pursuant to the above provision, such
Party shall not be excused from the non-performance of its obligations hereunder. The Party so affected by such Force Majeure
shall use reasonable efforts to minimize the consequences of such Force Majeure and to promptly resume performance hereunder
whenever the causes of such excuse are cured. Should the Party so affected by such Force Majeure fail to resume performance
hereunder when the causes of such excuse are cured, such Party shall be liable to the other Party.
8.3 In the event of Force Majeure, the Parties shall immediately consult with each other to find an equitable solution and shall use all
reasonable endeavors to minimize the consequences of such Force Majeure.
Article 9 Notices
9.1 All notices and other communications required or given pursuant to this Agreement shall be delivered personally or sent by
registered mail, postage prepaid or by commercial courier service or facsimile transmission to the address of such Party set forth
below. Each such notice shall also be resent by email. The dates on which such notices shall be deemed to have been effectively
served shall be determined as follows:
9.1.1
9.1.2
9.1.3
Notices given by personal delivery (including express mail service) shall be deemed effectively given on the day when an
acknowledgement of receipt thereof is signed.
Notices given by registered mail (postage prepaid) shall be deemed effectively given on the 15th day after the date of the
return receipt thereof.
Notices given by facsimile transmission shall be deemed effectively given on the date of transmission as shown on the
facsimile, provided that, if such facsimile is given after 5 p.m. or on a non-business day at the place of receipt, it shall be
deemed given on the business day immediately following the transmission date shown on such facsimile.
9.2
For the purpose of notices, the addresses of the Parties are as follows:
Party A:
Address:
Attn:
NIO Holding Co., Ltd
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Lei Liu
Party B:
Anhui NIO Data Technology Co., Ltd
Address:
Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Attn:
Aiyong Cai
9.3
Any party may at any time change its address for receiving notices by a notice delivered to the other party in accordance with the
terms hereof.
Article 10 Assignment of Agreement
10.1 Without Party A’s prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.
10.2 Party B hereby agrees that Party A may assign its rights and obligations under this Agreement to any third party and in case of such
assignment, Party A is only required to give written notice to Party B and does not need any consent from Party B for such
assignment.
Article 11 Miscellaneous
11.1 In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any aspect in
accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall
not be affected or compromised in any aspect. Both Parties shall negotiate in good faith to replace such invalid, illegal or
unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of both
Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid,
illegal or unenforceable provisions.
11.2 Any amendment and supplement to this Agreement may be made in writing by both Parties. Any amendment agreement and
supplementary agreement duly executed by the Parties hereto with regard to this Agreement shall constitute an integral part of this
Agreement, and shall have equal legal validity as this Agreement.
11.3 This Agreement is written in two copies, each Party having one copy.
(Remainder of this page is intentionally left blank; signature page follows)
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation
Agreement as of the date first above written.
Party A: NIO Holding Co., Ltd. (seal)
/s/Bin Li
By:
Name: Bin Li
Title: Legal Representative
Date: December 12, 2022
Party B: Anhui NIO Data Technology Co., Ltd (seal)
/s/ Yu Qu
By:
Name: Yu Qu
Title: Legal Representative
Date: December 12, 2022
Exclusive Option Agreement
Exhibit 4.59
This Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of December 12, 2022, in
Shanghai, the People’s Republic of China (the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special Administrative
Region, Macao Special Administrative Region and Taiwan Region of the PRC):
Party A: NIO Holding Co., Ltd.
Address: West of Susong Road, North of Shenzhen Road, Economic and Technological Development Zone, Hefei, Anhui Province
Party B: Bin Li
Address:
********
Party C: Anhui NIO Data Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and Technological Development
Zone, Hefei, Anhui Province
(Each of Party A, Party B and Party C shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.)
Whereas:
1.
2.
Party B is the shareholder of Party C and as of the date hereof hold 80% of the equity interests of Party C, representing RMB
80,000,000 in the registered capital of Party C.
Party A and Party B executed a Loan Agreement (“Loan Agreement”) on December 12, 2022, according to which Party A agreed
to provide to Party B a loan in the amount of RMB 80,000,000 for the purpose of Party B’s contribution to Party C.
Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:
1.
Sale and Purchase of Equity Interest
1.1
Option Granted
Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more
persons (each, a “Designee”) to purchase the equity interests in Party C then held by Party B once or at multiple times
at any time in part or in whole at Party A’s sole and absolute discretion to the extent permitted by PRC laws and at the
price described in Section 1.3 herein (such right being the “Equity Purchase Option”). Except for Party A and the
Designee(s), no other person shall be entitled to the Equity Purchase Option or other rights with respect to the equity
interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Purchase Option to Party A. The term
“person” as used herein shall refer to individuals, companies, joint ventures, partnerships, enterprises, trusts or non-
corporate organizations.
1.2
Steps for Exercise of the Equity Purchase Option
Subject to the provisions of PRC laws and regulations, Party A may exercise the Equity Purchase Option by issuing a
written notice to Party B (the “Equity Purchase Notice”), specifying: (a) Party A or the Designee’s decision to
exercise the Equity Purchase Option; (b) the portion of equity interests to be purchased by Party A or the Designee
from Party B (the “Purchased Equity”); and (c) the date for purchasing the Purchased Equity or the date for the
transfer of the Purchased Equity. Upon receipt of the Equity Purchase Notice, Party B shall transfer all the Purchased
Equity to Party A and/or the Designee as set forth in Article 1.4 hereof.
1.3
Purchase Price
The total price for the purchase by Party A of all equity interests in Party C held by Party B upon exercise of the Equity
Purchase Option by Party A shall be RMB 80,000,000; if Party A exercises the Equity Purchase Option to purchase
part of the equity interests held by Party B in Party C, then the purchase price shall be calculated on a pro rata basis. If
at the time when Party A exercises the Equity Purchase Option, the minimum price permitted under PRC laws is higher
than the aforementioned price, then the purchase price shall be such minimum price permitted by PRC laws
(collectively, the “Purchase Price”).
1.4
Transfer of Purchased Equity
For each exercise of the Equity Purchase Option by Party A:
1.4.1 Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted
approving Party B’s transfer of the Purchased Equity to Party A and/or the Designee(s);
1.4.2 Party B shall obtain written statements from the other shareholder(s) of Party C giving consent to the transfer of
the Purchased Equity by Party B to Party A and/or the Designee(s) and waiving any right of first refusal with
respect thereto;
1.4.3 Party B shall execute an equity interest transfer contract with respect to each transfer with Party A and/or each
Designee (whichever is applicable), in accordance with the provisions of this Agreement and the Equity
Purchase Notice regarding the Purchased Equity, in the form and substance satisfactory to Party A and/or the
Designee(s);
1.4.4 Party B shall, within thirty (30) days after receipt of the Equity Purchase Notice, execute all necessary contracts,
agreements or documents with relevant parties, obtain all necessary government approvals and permits, and take
all necessary actions, so as to transfer valid ownership of the Purchased Equity to Party A and/or the
Designee(s), unencumbered by any Security Interests, and cause Party A and/or the Designee(s) to become the
registered owner(s) of the Purchased Equity. For the purpose of this Section and this Agreement, “Security
Interests” shall include securities, mortgages, third party’s rights or interests, any stock options, acquisition
right, right of first refusal, right to offset, ownership retention or other security arrangements, but, for the
avoidance of doubt, shall be deemed to exclude any security interest created by this Agreement, Party B’s
Equity Pledge Agreement and Party B’s Power of Attorney; “Party B’s Equity Pledge Agreement” as used in
this Agreement shall refer to the Equity Pledge Agreement executed by and among Party A, Party B and Party C
on the date hereof and any modification, amendment and restatement thereto.; “Party B’s Power of Attorney”
as used in this Agreement shall refer to the Power of Attorney executed by Party B on the date hereof granting
Party A with a power of attorney and any modification, amendment and restatement thereto.
1.5
Payment
The Parties have agreed in the Loan Agreement that any proceeds obtained by Party B through the transfer of its equity
interests in Party C shall be used for repayment of the loan provided by Party A (and any interest thereon) in
accordance with the Loan Agreement. Accordingly, upon exercise of the Equity Purchase Option, Party A may make
the payment of the Purchase Price by way of offset of the outstanding debts owed by Party B to Party A (including
without limitation the outstanding amount of the loan owed by Party B to Party A and any interest thereon) (such debts,
the “Offset Debts”), in which case Party A shall not be required to pay any additional purchase price to Party B, unless
the Purchase Price set forth herein is required to be adjusted in accordance with PRC laws. If PRC laws impose
mandatory requirements on the Purchase Price agreed under this Agreement, such that the minimum Purchase Price
permitted under PRC laws exceeds the price already offset by the Offset Debts, Party B hereby waives its right to
receive the amount of price that exceeds the amount offset by the Offset Debts.
2. Covenants
2.1
Covenants regarding Party C
Party B (as a shareholder of Party C) and Party C hereby covenant as follows:
2.1.1 Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the
constitutional documents of Party C, increase or decrease its registered capital, or change its structure of
registered capital in other manners;
2.1.2 They shall maintain Party C’s corporate existence in accordance with good financial and business standards and
practices, obtain and maintain all necessary government licenses and permits required for Party C’s business,
and prudently and effectively operate its business and handle its affairs;
2.1.3 Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer,
mortgage or dispose of in any manner any material assets of Party C or legal or beneficial interest in the
material business or revenues of Party C, or allow the encumbrance thereon of any Security Interest;
2.1.4 Without the prior written consent of Party A, they shall not incur, inherit, guarantee or assume any debt, except
for debts incurred in the ordinary course of business other than payables incurred by loans;
2.1.5 They shall always operate all of Party C’s businesses within the ordinary course of business to maintain the
asset value of Party C and refrain from any action/omission that may adversely affect Party C’s operating status
and asset value;
2.1.6 Without the prior written consent of Party A, they shall not cause Party C to execute any material contract,
except the contracts in the ordinary course of business;
2.1.7 Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or
credit;
2.1.8 They shall provide Party A with information on Party C’s business operations and financial condition at Party
A’s request;
2.1.9 If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business
from an insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that
operate similar businesses;
2.1.10 Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with,
acquire or invest in any person;
2.1.11 They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to Party C’s assets, business or revenue;
2.1.12 To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise
necessary or appropriate defenses against all claims;
2.1.13 Without the prior written consent of Party A, Party C shall not in any manner distribute dividends to its
shareholders, provided that upon Party A’s request, Party C shall immediately distribute all distributable profits
to its shareholders;
2.1.14 At the request of Party A, they shall appoint any person designated by Party A as the director or senior
management of Party C.
2.1.15 Without Party A’s prior written consent, they shall not engage in any business in competition with Party A or its
affiliates;
2.1.16 Unless otherwise mandatorily required by PRC laws, Party C shall not be dissolved or liquated without prior
written consent by Party A;
2.1.17 Once PRC laws permit foreign investors to invest in the principal business of Party C in the PRC, with a
controlling stake and/or in the form of wholly foreign-owned enterprise, and the competent PRC government
authorities begin to approve such investments, upon Party A’s exercise of the Equity Purchase Option, Party B
shall immediately transfer to Party A or the Designee(s) the equity interests in Party C held by Party B, and
Party C shall cooperate with the equity transfer procedures; and
2.1.18 With respect to the covenants applicable to Party C under this Article 2.1, Party B and Party C shall cause Party
C’s subsidiaries to abide by such covenants where applicable, as if such subsidiaries were Party C under the
corresponding paragraphs.
2.2
Covenants of Party B
Party B hereby covenants as follows:
2.2.1 Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other
manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the
encumbrance thereon of any Security Interest, except for the interest placed in accordance with Party B’s Equity
Pledge Agreement and Party B’s Power of Attorney;
2.2.2 Without the prior written consent of Party A, Party B shall ensure the shareholders’ meeting and/or the directors
(or the executive director) of Party C not to approve any sale, transfer, mortgage or disposition in any other
manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the
encumbrance thereon of any Security Interest, except for the interest placed in accordance with Party B’s Equity
Pledge Agreement and Party B’s Power of Attorney;
2.2.3 Without the prior written consent of Party A, Party B shall cause the shareholders’ meeting or the directors (or
the executive director) of Party C not to approve the merger or consolidation with any person, or the acquisition
of or investment in any person;
2.2.4 Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration
or administrative proceedings relating to the equity interests in Party C held by Party B;
2.2.5 Party B shall ensure the shareholders’ meeting or the directors (or the executive director) of Party C to vote in
favor of the transfer of the Purchased Equity as set forth in this Agreement and to take any and all other actions
that may be requested by Party A;
2.2.6 To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or
appropriate documents, take all necessary or appropriate actions, file all necessary or appropriate complaints,
and raise necessary or appropriate defenses against all claims;
2.2.7 Party B shall appoint any designee of Party A as the director or the senior management of Party C, at the request
of Party A;
2.2.8 With respect to the transfer of equity interests of Party C by any other shareholder(s) of Party C to Party A,
Party B hereby waives all of its right of first refusal (if any); Party B gives consent to the execution by each
other shareholder of Party C with Party A and Party C of the exclusive option agreement, the Equity Pledge
Agreement and the power of attorney similar to this Agreement, Party B’s Equity Pledge Agreement and Party
B’s Power of Attorney, and undertakes not to take any action in conflict with such documents executed by such
other shareholder(s) (if any);
2.2.9 If Party B received any profit distribution, interest, dividend or proceeds of liquidation from Party C, Party B
shall promptly donate all such profit distribution, interest, dividend or proceeds of liquidation to Party A or any
other person designated by Party A in the manner permitted by the applicable PRC laws; and
2.2.10 Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately
executed by and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and
refrain from any action/omission that may affect the effectiveness and enforceability thereof. To the extent that
Party B has any remaining rights with respect to the equity interests subject to this Agreement hereunder or
under the Party B’s Equity Pledge Agreement or under the Party B’s Power of Attorney, Party B shall not
exercise such rights except in accordance with the written instructions of Party A.
3. Representations and Warranties
Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of
the transfer of the Purchased Equity, that:
3.1
3.2
3.3
3.4
3.5
3.6
They have the power, capacity and authority to execute and deliver this Agreement and any equity transfer contract to which
they are parties concerning each transfer of the Purchased Equity as described thereunder (each, a “Transfer Contract”),
and to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into
Transfer Contracts substantially consistent with the terms of this Agreement upon Party A’s exercise of the Equity Purchase
Option. This Agreement and the Transfer Contracts to which they are parties, once executed, constitute or will constitute
their legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;
Party B and Party C have obtained any and all approvals and consents from the third parties and competent government
authorities (if required) for the execution, delivery and performance of this Agreement;
The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any
Transfer Contracts shall not: (i) cause any violation of any applicable PRC laws; (ii) be inconsistent with the articles of
association or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which
they are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are
a party or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness
of any licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional
conditions to any licenses or permits issued to either of them;
Party B has good and marketable title to the equity interests held by it in Party C. Except for Party B’s Equity Pledge
Agreement and Party B’s Power of Attorney, Party B has not placed any Security Interest on such equity interests;
Party C has good and marketable title to all of its assets, and has not placed any Security Interest on the aforementioned
assets;
Party C does not have any outstanding debts, except for (i) debt incurred during the ordinary course of business; and (ii)
debts disclosed to Party A for which Party A’s written consent has been obtained;
3.7
Party C will comply with all laws and regulations applicable to asset acquisition; and
3.8
There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in
Party C, assets of Party C or Party C.
4. Term
This Agreement shall become effective upon execution by the Parties, and remain effective until all equity interests held by Party B
in Party C have been transferred or assigned to Party A and/or any other person designated by Party A in accordance with this
Agreement.
5. Governing Law and Disputes Resolution
5.1
Governing Law
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the resolution
of disputes hereunder shall be governed by PRC laws.
5.2 Methods of Disputes Resolution
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either
Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration
in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of
three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively
appoint one arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or
designated by Shanghai International Economic and Trade Arbitration Commission. The arbitration proceedings shall be
conducted in Chinese in a confidential manner. The arbitration award shall be final and binding upon the parties thereto.
Under appropriate circumstances, the arbitration tribunal or arbitrators may award compensation, injunctive relief in respect
of all the Parties’ equities, assets, property interest or land assets (including restriction on conduct of business, restriction or
prohibition of transfer or sale of equities or assets), or propose the winding-up of all the Parties in accordance with the
dispute resolution clause and/or applicable PRC laws. In addition, in the course of forming the tribunal, both Parties shall
have the right to file an application to any court with competent jurisdiction (including courts in Hong Kong, Cayman
Islands, places of incorporation of all the Parties (namely Hefei, China) and places where the principal assets of either Party
are located) for the grant of temporary reliefs. During the arbitration, except for the matters under dispute and pending for
arbitration, all the Parties shall continue to exercise their respective rights under this Agreement and perform their
respective obligations under this Agreement.
6. Taxes and Fees
Each Party shall pay any and all transfer and registration taxes, expenses and fees incurred thereby or levied thereon in accordance
with PRC laws in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the
consummation of the transactions contemplated under this Agreement and the Transfer Contracts.
7. Notices
7.1 All notices and other communications required to be given pursuant to this Agreement or otherwise given in connection with
this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, a commercial courier service,
facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be sent by email. The
dates on which notices shall be deemed to have been effectively given shall be determined as follows:
7.1.1
7.1.2
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date of
signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the date
on the registered letter receipt;
7.1.3 Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 o’clock p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the date
indicated on the fax transmission record.
7.2
For the purpose of notice, the addresses of the Parties are as follows:
Party A: NIO Holding Co., Ltd.
Address: NIO Inc., Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Attn:
Lei Liu
Party B: Bin LI
Address:
Attn:
********
Bin Li
Party C: Anhui NIO Data Technology Co., Ltd.
Address:
Attn:
NIO Inc., Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Lei Liu
7.3
Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of this
Section.
8. Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is
or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or
financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure
of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
9.
Further Warranties
The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the
provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the
implementation of the provisions and purposes of this Agreement.
10. Breach of Agreement
10.1
If Party B or Party C commits any material breach of any term of this Agreement, Party A shall have right to terminate this
Agreement and/or require Party B or Party C to indemnify all damages. This Article 10 shall not prejudice any other rights
of Party A hereunder.
10.2
Unless otherwise provided for by laws, Party B and Party C shall in no case be entitled to terminate or cancel this
Agreement.
11. Miscellaneous
11.1
Amendments, changes and supplements
Any amendment, change or supplement to this Agreement shall be made in a written agreement signed by each Party.
11.2
Entire agreement
Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this
Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter
hereof, and shall supersede all prior oral and written consultations, representations and contracts reached with respect to
the subject matter of this Agreement.
11.3
Headings
The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the
meanings of the provisions of this Agreement.
11.4
Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any
aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such
invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by
law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to
the economic effect of those invalid, illegal or unenforceable provisions.
11.5
Successors
This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the
Parties.
11.6
Survival
11.6.1 Any obligations that occurred or that are due in connection with this Agreement before the expiration or early
termination of this Agreement shall survive the expiration or early termination thereof.
11.6.2 The provisions of Sections 5, 8, 10 and this Section 11.6 shall survive the termination of this Agreement.
11.7 Waivers
Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing
and shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by
other Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.
11.8
Language and Counterpart
This Agreement is written in Chinese in three copies, each Party having one copy.
[Remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/ Bin Li
Bin Li
Legal Representative
December 12, 2022
Party B: Bin Li
By:
Date:
/s/ Bin Li
December 12, 2022
Party C: Anhui NIO Data Technology Co., Ltd. (seal)
By:
Name:
Title:
Date:
/s/ Yu Qu
Yu Qu
Legal Representative
December 12, 2022
Exclusive Option Agreement
This Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of December 12, 2022, in
Shanghai, the People’s Republic of China (the “PRC”, for the purpose of this Agreement, excluding Hong Kong Special Administrative
Region, Macao Special Administrative Region and Taiwan Region of the PRC):
Party A: NIO Holding Co., Ltd.
Address:
West of Susong Road, North of Shenzhen Road, Economic and Technological Development
Zone, Hefei, Anhui Province
Party B:
Address:
Lihong Qin
********
Party C: Anhui NIO Data Technology Co., Ltd.
Address:
Building F, Hengchuang Intelligent Technology Park, No. 3963, Susong Road, Economic and
Technological Development Zone, Hefei, Anhui Province
(Each of Party A, Party B and Party C shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.)
Whereas:
1.
2.
Party B is the shareholder of Party C and as of the date hereof hold 20% of the equity interests of Party C, representing RMB
20,000,000 in the registered capital of Party C.
Party A and Party B executed a Loan Agreement (“Loan Agreement”) on December 12, 2022, according to which Party A agreed
to provide to Party B a loan in the amount of RMB 20,000,000 for the purpose of Party B’s contribution to Party C.
Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:
1.
Sale and Purchase of Equity Interest
1.1
Option Granted
Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons
(each, a “Designee”) to purchase the equity interests in Party C then held by Party B once or at multiple times at any time in
part or in whole at Party A’s sole and absolute discretion to the extent permitted by PRC laws and at the price described in
Section 1.3 herein (such right being the “Equity Purchase Option”). Except for Party A and the Designee(s), no other
person shall be entitled to the Equity Purchase Option or other rights with respect to the equity interests of Party B. Party C
hereby agrees to the grant by Party B of the Equity Purchase Option to Party A. The term “person” as used herein shall refer
to individuals, companies, joint ventures, partnerships, enterprises, trusts or non-corporate organizations.
1.2
Steps for Exercise of the Equity Purchase Option
Subject to the provisions of PRC laws and regulations, Party A may exercise the Equity Purchase Option by issuing a
written notice to Party B (the “Equity Purchase Notice”), specifying:(a) Party A or the Designee’s decision to exercise the
Equity Purchase Option; (b) the portion of equity interests to be purchased by Party A or the Designee from Party B (the
“Purchased Equity”); and (c) the date for purchasing the Purchased Equity or the date for the transfer of the Purchased
Equity. Upon receipt of the Equity Purchase Notice, Party B shall transfer all the Purchased Equity to Party A and/or the
Designee as set forth in Article 1.4 hereof.
1.3
Purchase Price
The total price for the purchase by Party A of all equity interests in Party C held by Party B upon exercise of the Equity
Purchase Option by Party A shall be RMB 20,000,000; if Party A exercises the Equity Purchase Option to purchase part of
the equity interests held by Party B in Party C, then the purchase price shall be calculated on a pro rata basis. If at the time
when Party A exercises the Equity Purchase Option, the minimum price permitted under PRC laws is higher than the
aforementioned price, then the purchase price shall be such minimum price permitted by PRC laws (collectively, the
“Purchase Price”).
1.4
Transfer of Purchased Equity
For each exercise of the Equity Purchase Option by Party A:
1.4.1
1.4.2
1.4.3
1.4.4
Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted
approving Party B’s transfer of the Purchased Equity to Party A and/or the Designee(s);
Party B shall obtain written statements from the other shareholders of Party C giving consent to the transfer of the
Purchased Equity by Party B to Party A and/or the Designee(s) and waiving any right of first refusal with respect
thereto;
Party B shall execute an equity interest transfer contract with respect to each transfer with Party A and/or each
Designee (whichever is applicable), in accordance with the provisions of this Agreement and the Equity Purchase
Notice regarding the Purchased Equity, in the form and substance satisfactory to Party A and/or the Designee(s);
Party B shall, within thirty (30) days after receipt of the Equity Purchase Notice, execute all necessary contracts,
agreements or documents with relevant parties, obtain all necessary government approvals and permits, and take all
necessary actions, so as to transfer valid ownership of the Purchased Equity to Party A and/or the Designee(s),
unencumbered by any Security Interests, and cause Party A and/or the Designee(s) to become the registered
owner(s) of the Purchased Equity. For the purpose of this Section and this Agreement, “Security Interests” shall
include securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first
refusal, right to offset, ownership retention or other security arrangements, but shall be deemed to exclude any
security interest created by this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of Attorney;
“Party B’s Equity Pledge Agreement” as used in this Agreement shall refer to the Equity Pledge Agreement
executed by and among Party A, Party B and Party C on the date hereof and any modification, amendment and
restatement thereto.; “Party B’s Power of Attorney” as used in this Agreement shall refer to the Power of Attorney
executed by Party B on the date hereof granting Party A with a power of attorney and any modification, amendment
and restatement thereto.
1.5
Payment
The Parties have agreed in the Loan Agreement that any proceeds obtained by Party B through the transfer of its equity
interests in Party C shall be used for repayment of the loan provided by Party A (and any interest thereon) in accordance
with the Loan Agreement. Accordingly, upon exercise of the Equity Purchase Option, Party A may make the payment of the
Purchase Price by way of offset of the outstanding debts owed by Party B to Party A (including without limitation the
outstanding amount of the loan owed by Party B to Party A and any interest thereon) (such debts, the “Offset Debts”), in
which case Party A shall not be required to pay any additional purchase price to Party B, unless the Purchase Price set forth
herein is required to be adjusted in accordance with PRC laws. If PRC laws impose mandatory requirements on the Purchase
Price agreed under this Agreement, such that the minimum Purchase Price permitted under PRC laws exceeds the price
already offset by the Offset Debts, Party B hereby waives its right to receive the amount of price that exceeds the amount
offset by the Offset Debts.
2. Covenants
2.1
Covenants regarding Party C
Party B (as a shareholder of Party C) and Party C hereby covenant as follows:
2.1.1 Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the
constitutional documents of Party C, increase or decrease its registered capital, or change its structure of registered
capital in other manners;
2.1.2
They shall maintain Party C’s corporate existence in accordance with good financial and business standards and
practices, obtain and maintain all necessary government licenses and permits required for Party C’s business, and
prudently and effectively operate its business and handle its affairs;
2.1.3 Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer,
mortgage or dispose of in any manner any material assets of Party C or legal or beneficial interest in the material
business or revenues of Party C, or allow the encumbrance thereon of any Security Interest;
2.1.4 Without the prior written consent of Party A, they shall not incur, inherit, guarantee or assume any debt, except for
debts incurred in the ordinary course of business other than payables incurred by loans;
2.1.5
They shall always operate all of Party C’s businesses within the ordinary course of business to maintain the asset
value of Party C and refrain from any action/omission that may adversely affect Party C’s operating status and asset
value;
2.1.6 Without the prior written consent of Party A, they shall not cause Party C to execute any material contract, except
the contracts in the ordinary course of business;
2.1.7 Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or
credit;
2.1.8
2.1.9
They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s
request;
If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from
an insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate
similar businesses;
2.1.10 Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with,
acquire or invest in any person;
2.1.11 They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to Party C’s assets, business or revenue;
2.1.12 To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents,
take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary or
appropriate defenses against all claims;
2.1.13 Without the prior written consent of Party A, Party C shall not in any manner distribute dividends to its
shareholders, provided that upon Party A’s request, Party C shall immediately distribute all distributable profits to its
shareholders;
2.1.14 At the request of Party A, they shall appoint any person designated by Party A as the director or senior management
of Party C.
2.1.15 Without Party A’s prior written consent, they shall not engage in any business in competition with Party A or its
affiliates;
2.1.16 Unless otherwise mandatorily required by PRC laws, Party C shall not be dissolved or liquated without prior written
consent by Party A;
2.1.17 Once PRC laws permit foreign investors to invest in the principal business of Party C in the PRC, with a controlling
stake and/or in the form of wholly foreign-owned enterprise, and the competent PRC government authorities begin
to approve such investments, upon Party A’s exercise of the Equity Purchase Option, Party B shall immediately
transfer to Party A or the Designee(s) the equity interests in Party C held by Party B, and Party C shall cooperate
with the equity transfer procedures; and
2.1.18 With respect to the covenants applicable to Party C under this Article 2.1, Party B and Party C shall cause Party C’s
subsidiaries to abide by such covenants where applicable, as if such subsidiaries were Party C under the
corresponding paragraphs.
2.2
Covenants of Party B
Party B hereby covenants as follows:
2.2.1 Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other
manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance
thereon of any Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge
Agreement and Party B’s Power of Attorney;
2.2.2 Without the prior written consent of Party A, Party B shall ensure the shareholders’ meeting and/or the directors (or
the executive director) of Party C not to approve any sale, transfer, mortgage or disposition in any other manner of
any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon
of any Security Interest, except for the interest placed in accordance with Party B’s Equity Pledge Agreement and
Party B’s Power of Attorney;
2.2.3 Without the prior written consent of Party A, Party B shall cause the shareholders’ meeting or the directors (or the
executive director) of Party C not to approve the merger or consolidation with any person, or the acquisition of or
investment in any person;
2.2.4
2.2.5
2.2.6
Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or
administrative proceedings relating to the equity interests in Party C held by Party B;
Party B shall ensure the shareholders’ meeting or the directors (or the executive director) of Party C to vote in favor
of the transfer of the Purchased Equity as set forth in this Agreement and to take any and all other actions that may
be requested by Party A;
To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or
appropriate documents, take all necessary or appropriate actions, file all necessary or appropriate complaints, and
raise necessary or appropriate defenses against all claims;
2.2.7
Party B shall appoint any designee of Party A as the director or the senior management of Party C, at the request of
Party A;
2.2.8 With respect to the transfer of equity interests of Party C by any other shareholder(s) of Party C to Party A, Party B
hereby waives all of its right of first refusal (if any); Party B gives consent to the execution by each other
shareholder of Party C with Party A and Party C of the exclusive option agreement, the Equity Pledge Agreement
and the power of attorney similar to this Agreement, Party B’s Equity Pledge Agreement and Party B’s Power of
Attorney, and undertakes not to take any action in conflict with such documents executed by such other
shareholder(s) (if any);
2.2.9
If Party B received any profit distribution, interest, dividend or proceeds of liquidation from Party C, Party B shall
promptly donate all such profit distribution, interest, dividend or proceeds of liquidation to Party A or any other
person designated by Party A in the manner permitted by the applicable PRC laws; and
2.2.10 Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by
and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any
action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any
remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Party B’s
Equity Pledge Agreement or under the Party B’s Power of Attorney, Party B shall not exercise such rights except in
accordance with the written instructions of Party A.
3. Representations and Warranties
Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of
the transfer of the Purchased Equity, that:
3.1
3.2
3.3
3.4
3.5
3.6
They have the power, capacity and authority to execute and deliver this Agreement and any equity transfer contract to which
they are parties concerning each transfer of the Purchased Equity as described thereunder (each, a “Transfer Contract”),
and to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into
Transfer Contracts substantially consistent with the terms of this Agreement upon Party A’s exercise of the Equity Purchase
Option. This Agreement and the Transfer Contracts to which they are parties, once executed, constitute or will constitute
their legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;
Party B and Party C have obtained any and all approvals and consents from the third parties and competent government
authorities (if required) for the execution, delivery and performance of this Agreement;
The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any
Transfer Contracts shall not: (i) cause any violation of any applicable PRC laws; (ii) be inconsistent with the articles of
association or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which
they are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are
a party or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness
of any licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional
conditions to any licenses or permits issued to either of them;
Party B has good and marketable title to the equity interests held by it in Party C. Except for Party B’s Equity Pledge
Agreement and Party B’s Power of Attorney, Party B has not placed any Security Interest on such equity interests;
Party C has good and marketable title to all of its assets, and has not placed any Security Interest on the aforementioned
assets;
Party C does not have any outstanding debts, except for (i) debt incurred during the ordinary course of business; and (ii)
debts disclosed to Party A for which Party A’s written consent has been obtained;
3.7
Party C will comply with all laws and regulations applicable to asset acquisition; and
3.8
There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in
Party C, assets of Party C or Party C.
4. Term
This Agreement shall become effective upon execution by the Parties, and remain effective until all equity interests held by Party B
in Party C have been transferred or assigned to Party A and/or any other person designated by Party A in accordance with this
Agreement.
5. Governing Law and Disputes Resolution
5.1 Governing Law
The execution, effectiveness, interpretation, performance, amendment and termination of this Agreement and the resolution
of disputes hereunder shall be governed by PRC laws.
5.2 Methods of Disputes Resolution
In the event of any dispute arising from the performance of this Agreement or in connection with this Agreement, either
Party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration
in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of
three arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively
appoint one arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or
designated by Shanghai International Economic and Trade Arbitration Commission. The arbitration proceedings shall be
conducted in Chinese in a confidential manner. The arbitration award shall be final and binding upon the parties thereto.
Under appropriate circumstances, the arbitration tribunal or arbitrators may award compensation, injunctive relief in respect
of all the Parties’ equities, assets, property interest or land assets (including restriction on conduct of business, restriction or
prohibition of transfer or sale of equities or assets), or propose the winding-up of all the Parties in accordance with the
dispute resolution clause and/or applicable PRC laws. In addition, in the course of forming the tribunal, both Parties shall
have the right to file an application to any court with competent jurisdiction (including courts in Hong Kong, Cayman
Islands, places of incorporation of all the Parties (namely Hefei, China) and places where the principal assets of either Party
are located) for the grant of temporary reliefs. During the arbitration, except for the matters under dispute and pending for
arbitration, all the Parties shall continue to exercise their respective rights under this Agreement and perform their respective
obligations under this Agreement.
6.
Taxes and Fees
Each Party shall pay any and all transfer and registration taxes, expenses and fees incurred thereby or levied thereon in accordance
with PRC laws in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the
consummation of the transactions contemplated under this Agreement and the Transfer Contracts.
7. Notices
7.1
All notices and other communications required to be given pursuant to this Agreement or otherwise given in connection with
this Agreement shall be delivered personally, or sent by registered mail, prepaid postage, a commercial courier service,
facsimile transmission to the address of such Party set forth below. A copy of each notice shall also be sent by email. The
dates on which notices shall be deemed to have been effectively given shall be determined as follows:
7.1.1
7.1.2
7.1.3
Notices given by personal delivery (including courier service), shall be deemed effectively served on the date of
signature for receipt;
Notices given by registered mail, postage prepaid, shall be deemed effectively served on the 15th day after the date
on the registered letter receipt;
Notices given by facsimile transmission, shall be deemed effectively served on the date indicated on the fax
transmission record, unless it is delivered after 5 o’clock p.m. or on a non-business day per the local time of the
recipient, in which case, it shall be deemed effectively served on the business day immediately following the date
indicated on the fax transmission record.
7.2
For the purpose of notice, the addresses of the Parties are as follows:
Party A:
Address:
Attn:
Party B:
Address:
Attn:
Party C:
Address:
Attn:
NIO Holding Co., Ltd.
NIO Inc., Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Lei Liu
Lihong Qin
********
Lihong Qin
Anhui NIO Data Technology Co., Ltd.
NIO Inc., Building 20, No. 56 AnTuo Road, Jiading District, Shanghai
Lei Liu
7.3
Any Party may change its address for notices by a notice delivered to the other Parties in accordance with the terms of this
Section.
8. Confidentiality
The Parties acknowledge and confirm that the existence and the terms of this Agreement and any oral or written information
exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential
information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any confidential information to any third party, except for the information that: (a) is
or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government
authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial
advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or
financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Article. Disclosure of any
confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure
of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
9.
Further Warranties
The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the
provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the
implementation of the provisions and purposes of this Agreement.
10. Breach of Agreement
10.1
If Party B or Party C commits any material breach of any term of this Agreement, Party A shall have right to terminate this
Agreement and/or require Party B or Party C to indemnify all damages. This Article 10 shall not prejudice any other rights
of Party A hereunder.
10.2
Unless otherwise provided for by laws, Party B and Party C shall in no case be entitled to terminate or cancel this
Agreement.
11. Miscellaneous
11.1
Amendments, changes and supplements
Any amendment, change or supplement to this Agreement shall be made in a written agreement signed by each Party.
11.2
Entire agreement
Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this
Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter
hereof, and shall supersede all prior oral and written consultations, representations and contracts reached with respect to
the subject matter of this Agreement.
11.3
Headings
The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the
meanings of the provisions of this Agreement.
11.4
Severability
In the event that one or several of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any
aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected or compromised in any aspect. The Parties shall negotiate in good faith to replace such
invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by
law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to
the economic effect of those invalid, illegal or unenforceable provisions.
11.5
Successors
This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the
Parties.
11.6
Survival
11.6.1 Any obligations that occurred or that are due in connection with this Agreement before the expiration or early
termination of this Agreement shall survive the expiration or early termination thereof.
11.6.2 The provisions of Sections 5, 8, 10 and this Section 11.6 shall survive the termination of this Agreement.
11.7 Waivers
Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing
and shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by
other Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.
11.8
Language and Counterpart
This Agreement is written in Chinese in three copies, each Party having one copy.
[Remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the
date first written above, which will take effect in accordance with the provisions of this Agreement.
Party A: NIO Holding Co., Ltd. (seal)
/s/ Bin Li
By:
Name: Bin Li
Title: Legal Representative
Date: December 12, 2022
Party B: Lihong Qin
/s/ Lihong Qin
By:
Date: December 12, 2022
Party C: Anhui NIO Data Technology Co., Ltd. (seal)
/s/ Yu Qu
By:
Name: Yu Qu
Title: Legal Representative
Date: December 12, 2022
Exhibit 4.60
To:
Board of Directors of NIO Inc.;
Board of Directors of NIO Holding Co., Ltd. (“NIO Holding”); and
Executive Director of Anhui NIO Data Technology Co., Ltd (“Anhui NIO Data”)
Confirmation and Undertaking Letter
The undersigned, Bin Li, a citizen of the People’s Republic of China (the “PRC”) with ID Card No.: ********, as a shareholder of
Anhui NIO Data, hereby confirms, undertakes and warrants that in the event of the death, incapacity, divorce or the occurrence of any
circumstances which may affect the exercise of equity interest in Anhui NIO Data held by me, I shall ensure my heirs, guardians,
creditors, spouse or any other persons who are entitled to claim rights or benefits in respect of the equity interest in Anhui NIO Data held
by me and any interests attached thereto, will not take any action, at any time and in any way, that may affect or interfere with the
performance of my obligations under the Control Documents (including the Exclusive Business Cooperation Agreement, the Exclusive
Option Agreement, the Equity Pledge Agreement, the Loan Agreement and the Power of Attorney entered into by me on December 12,
2022, as well as any modification, alteration and/or supplementary agreements entered into by the relevant parties from time to time,
collectively, the “Control Documents”).
The undersigned confirms that: (1) the equity interest in Anhui NIO Data held by me and any interests attached thereto are not jointly
owned by myself and my spouse, and my spouse does not own and has no control over such property or interests; (2) the daily operation
management and voting matters of me in respect of Anhui NIO Data are not affected by my spouse; and (3) in the event that my spouse
and I are divorced from, I will take all actions deemed necessary by NIO Holding to ensure the performance of the Control Documents.
The undersigned further confirms that, when the law of the PRC allow NIO Holding to operate the relevant business operated by Anhui
NIO Data or to invest in Anhui NIO Data without the use of Control Documents, I will transfer all of the equity interest in Anhui NIO
Data to NIO Holding and/or its designated third party and terminate the Control Documents upon the request of NIO Holding. Subject to
the law of the PRC, upon the termination of the Control Documents, I will return any consideration received from NIO Holding in
acquiring the equity interest in Anhui NIO Data to NIO Holding or its designated entities in the manner as requested by NIO Holding.
The undersigned undertakes that during the term of the Control Documents, (i) unless with the written consent of NIO Holding, I will not
directly or indirectly, whether through myself or any other natural person or legal entity, participate in, or engage in, acquire or hold (in
any case, whether as a shareholder, partner, agent, employee or otherwise), any business that is or may be in competition with NIO
Holding, Anhui NIO Data and their affiliates; (ii) no action or omission of action by me will result in any conflict of interests between
me and NIO Holding (including but not limited to the shareholders of NIO Holding); and (iii) in the event of such conflict of interest
(occurrence of which is subject to the decision of NIO Holding in its sole discretion), I will, subject to the law of the PRC, take any
action as directed by NIO Holding to eliminate such conflict of interest.
For all disputes arising from the implementation of or in connection with this letter, myself and any interested party may submit such
disputes to arbitration by Shanghai International Economic and Trade Arbitration Commission in Shanghai in accordance with its
arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three arbitrators appointed in accordance with
arbitration rules. The claimant shall appoint one arbitrator, the respondent shall appoint one arbitrator, and the third arbitrator shall be
appointed by the above two arbitrators through consultation or by Shanghai International Economic and Trade Arbitration Commission.
The arbitration shall be conducted confidentially, and the language of the arbitration shall be Chinese. The arbitration award shall be final
and binding upon the parties. Where appropriate, the arbitration tribunal or the arbitrators may award compensation, injunctive relief in
respect of all the parties’ equities, assets, property interest or land assets (including restrictions on conduct of business, restrictions or
prohibitions on transfer or sale of equities or assets), or propose the winding up of the relevant parties in accordance with the dispute
resolution provisions and/or applicable laws of the PRC. In addition, any interested party and myself may apply to any court having
jurisdiction (including Hong Kong, the Cayman Islands, the place of incorporation of either party (namely, Hefei, China) or the place
where the principal assets of any interested party or myself are located) for interim relief. During the arbitration, this letter shall remain
effective except for the matters under dispute and pending for arbitration.
(Signature Page to Confirmation and Undertaking Letter)
By:
/s/ Bin Li
Name: Bin Li
December 12, 2022
To:
Board of Directors of NIO Inc.;
Board of Directors of NIO Holding Co., Ltd. (“NIO Holding”); and
Executive Director of Anhui NIO Data Technology Co., Ltd. (“Anhui NIO Data”)
Confirmation and Undertaking Letter
The undersigned, Lihong Qin, a citizen of the People’s Republic of China (the “PRC”) with ID Card No.: ********, as a shareholder of
Anhui NIO Data, hereby confirms, undertakes and warrants that in the event of the death, incapacity, divorce or the occurrence of any
circumstances which may affect the exercise of equity interest in Anhui NIO Data held by me, I shall ensure my heirs, guardians,
creditors, spouse or any other persons who are entitled to claim rights or benefits in respect of the equity interest in Anhui NIO Data held
by me and any interests attached thereto, will not take any action, at any time and in any way, that may affect or interfere with the
performance of my obligations under the Control Documents (including the Exclusive Business Cooperation Agreement, the Exclusive
Option Agreement, the Equity Pledge Agreement, the Loan Agreement and the Power of Attorney entered into by me on December 12,
2022, as well as any modification, alteration and/or supplementary agreements entered into by the relevant parties from time to time,
collectively, the “Control Documents”).
The undersigned confirms that: (1) the equity interest in Anhui NIO Data held by me and any interests attached thereto are not jointly
owned by myself and my spouse, and my spouse does not own and has no control over such property or interests; (2) the daily operation
management and voting matters of me in respect of Anhui NIO Data are not affected by my spouse; and (3) in the event that my spouse
and I are divorced, I will take all actions deemed necessary by NIO Holding to ensure the performance of the Control Documents.
The undersigned further confirms that, when the law of the PRC allow NIO Holding to operate the relevant business operated by Anhui
NIO Data or to invest in Anhui NIO Data without the use of Control Documents, I will transfer all of the equity interest in Anhui NIO
Data to NIO Holding and/or its designated third party and terminate the Control Documents upon the request of NIO Holding. Subject to
the law of the PRC, upon the termination of the Control Documents, I will return any consideration received from NIO Holding in
acquiring the equity interest in Anhui NIO Data to NIO Holding or its designated entities in the manner as requested by NIO Holding.
The undersigned undertakes that during the term of the Control Documents, (i) unless with the written consent of NIO Holding, I will not
directly or indirectly, whether through myself or any other natural person or legal entity, participate in, or engage in, acquire or hold (in
any case, whether as a shareholder, partner, agent, employee or otherwise), any business that is or may be in competition with NIO
Holding, Anhui NIO Data and their affiliates; (ii) no action or omission of action by me will result in any conflict of interests between
me and NIO Holding (including but not limited to the shareholders of NIO Holding); and (iii) in the event of such conflict of interest
(occurrence of which is subject to the decision of NIO Holding in its sole discretion), I will, subject to the law of the PRC, take any
action as directed by NIO Holding to eliminate such conflict of interest.
For all disputes arising from the implementation of or in connection with this letter, myself and any interested party may submit such
disputes to arbitration by Shanghai International Economic and Trade Arbitration Commission in Shanghai in accordance with its
arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three arbitrators appointed in accordance with
arbitration rules. The claimant shall appoint one arbitrator, the respondent shall appoint one arbitrator, and the third arbitrator shall be
appointed by the above two arbitrators through consultation or by Shanghai International Economic and Trade Arbitration Commission.
The arbitration shall be conducted confidentially, and the language of the arbitration shall be Chinese. The arbitration award shall be final
and binding upon the parties. Where appropriate, the arbitration tribunal or the arbitrators may award compensation, injunctive relief in
respect of all the parties’ equities, assets, property interest or land assets (including restrictions on conduct of business, restrictions or
prohibitions on any transfer or sale of equities or assets), or propose the winding up of the relevant parties in accordance with the dispute
resolution provisions and/or applicable laws of the PRC. In addition, any interested party and myself may apply to any court having
jurisdiction (including Hong Kong, the Cayman Islands, the place of incorporation of either party (namely, Hefei, China) or the place
where the principal assets of any interested party or myself are located) for interim relief. During the arbitration, this letter shall remain
effective except for the matters under dispute and pending for arbitration.
(Signature Page to Confirmation and Undertaking Letter)
By:
/s/ Lihong Qin
Name: Lihong Qin
December 12, 2022
Exhibit 4.61
To:
Board of Directors of NIO Inc.;
Board of Directors of NIO Holding Co., Ltd. (“NIO Holding”); and
Executive Director of Anhui NIO Data Technology Co., Ltd (“Anhui NIO Data”)
CONSENT LETTER
The undersigned, Yizhi WANG, a citizen of the People’s Republic of China (the “PRC”) (PRC Identification No.: ********), am the
legitimate spouse of Bin LI (a PRC citizen with PRC Identification No.: ********, and hereinafter referred to as “my spouse”). I hereby
acknowledge that I am aware of, and unconditionally and irrevocably consent to, the execution of the following documents by my spouse
and/or Anhui NIO Data in which my spouse directly owns equity interest, and agree that my spouse may dispose of the equities in Anhui
NIO Data owned by my spouse and any interests attached thereto in accordance with the provisions of the Controlling Agreements:
1.
2.
3.
4.
5.
6.
7.
the Exclusive Business Cooperation Agreement executed by and between Anhui NIO Data and NIO Holding on December 12, 2022;
the Exclusive Option Agreement executed by and among Bin LI, NIO Holding and Anhui NIO Data on December 12, 2022;
the Equity Pledge Agreement executed by and among Bin LI, NIO Holding and Anhui NIO Data on December 12, 2022;
the Loan Agreement executed by and between Bin LI and NIO Holding on December 12, 2022;
the Power of Attorney issued by Bin LI to NIO Holding on December 12, 2022;
the Confirmation and Undertaking Letter signed by Bin LI on December 12, 2022; and
any modification, amendment and/or supplementary agreement to be subsequently executed by the relevant parties from time to time
in connection with the documents set forth in above sections 1 to 6 (the documents described in above sections 1 to 7 are collectively
referred to as the “Controlling Agreements”).
I hereby acknowledge and confirm that the equity interests held by my spouse in Anhui NIO Data now and in the future and any
interests attached thereto are my spouse’s personal property and do not constitute property jointly owned by me and my spouse, and that
my spouse has the right to dispose of such equities and any interests attached thereto at his sole discretion. I hereby unconditionally and
irrevocably waive any rights or interests to/in such equities and corresponding assets thereof which may be granted to me under any
applicable laws, undertake that I will not make any claim in respect of such equities and their corresponding assets (including a claim
that such equities and assets corresponding thereto constitute the property jointly owned by me and my spouse, and a claim, on basis of
the foresaid claim, for participation in the daily operation, management and voting affairs of Anhui NIO Data, or other form of influence
on my spouse’s decisions in relation to such equities and attached interests). I hereby further acknowledge that my spouse is entitled to
own his rights and perform his obligations under the Controlling Agreements at his sole discretion, and that neither my spouse’s
performance, further amendment or termination of the Controlling Agreements nor his execution of any other documents in substitution
for any of the Controlling Agreements shall require my further authorization or consent.
I hereby undertake that I will execute all necessary documents and take all necessary actions to ensure the due performance of the
Controlling Agreements (as amended from time to time).
I hereby agree and undertake that I will not conduct any act that conflicts with the arrangements under the Controlling Agreements
or this Consent Letter at any time. In the event that I obtain any equities of Anhui NIO Data and any interests attached thereto for any
reason, I shall be bound by the Controlling Agreements (as amended from time to time) and comply with my obligations as a shareholder
of Anhui NIO Data under the Controlling Agreements (as amended from time to time); and, for such purpose, I shall, upon NIO
Holding’s request, execute a series of written documents in substantially the same form and substance as that of the Controlling
Agreements (as amended from time to time).
I hereby further acknowledge, undertake and warrant that my spouse shall, in any circumstances (including but not limited to a
divorce between me and my spouse), have the right to dispose of the equity interests which he owns in Anhui NIO Data and the assets
corresponding thereto at his sole discretion, and that I will not take any action that may affect or interfere with my spouse’s performance
of his obligations under the Controlling Agreements (including but not limited to a claim for any equities of Anhui NIO Data or any
rights which are obtained through controlling contractual arrangement).
In the event of any dispute arising from the performance of this Consent Letter or in connection with this Consent Letter, either I or
any interested party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of each party’s equities, assets, property interests or land
assets (including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in the
course of forming the tribunal, either I or the interested party shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of the interested party (namely Hefei, China)
and places where either my or the interested party’s main assets are located) for the grant of temporary reliefs. During the arbitration
proceeding, this Consent Letter shall continue to be valid except for the part which is disputed by either the interested party or me and
pending for arbitration.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
(Signature Page of the Consent Letter)
By:
Name:
/s/ Yizhi WANG
Yizhi WANG
December 12, 2022
Bin LI hereby agrees and accepts this Consent Letter:
By:
Name:
/s/ Bin LI
Bin LI
NIO Inc.
By:
Name:
Title:
/s/ Bin LI
Bin LI
Chairman
NIO Holding Co., Ltd. and Anhui NIO Data Technology Co., Ltd. hereby agree and acknowledge this Consent Letter:
NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
/s/ Bin LI
Bin LI
Legal Representative
Anhui NIO Data Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Yu QU
Yu QU
Legal Representative
To:
Board of Directors of NIO Inc.;
Board of Directors of NIO Holding Co., Ltd. (the “NIO Holding”); and
Executive Director of Anhui NIO Data Technology Co., Ltd. (the “Anhui NIO Data”)
CONSENT LETTER
The undersigned, Zhen CHANG, a citizen of the People’s Republic of China (the “PRC”) (PRC Identification No.: ********), am the
legitimate spouse of Lihong QIN (a PRC citizen with PRC Identification No.: ********, and hereinafter referred to as “my spouse”). I
hereby acknowledge that I am aware of, and unconditionally and irrevocably consent to, the execution of the following documents by my
spouse and/or Anhui NIO Data in which my spouse directly owns equity interest, and agree that my spouse may dispose of the equities in
Anhui NIO Data owned by my spouse and any interests attached thereto in accordance with the provisions of the Controlling
Agreements:
1.
2.
3.
4.
5.
6.
7.
the Exclusive Business Cooperation Agreement executed by and between Anhui NIO Data and NIO Holding on December 12, 2022;
the Exclusive Option Agreement executed by and among Lihong QIN, NIO Holding and Anhui NIO Data on December 12, 2022;
the Equity Pledge Agreement executed by and among Lihong QIN, NIO Holding and Anhui NIO Data on December 12, 2022;
the Loan Agreement executed by and between Lihong QIN and NIO Holding on December 12, 2022;
the Power of Attorney issued by Lihong QIN to NIO Holding on December 12, 2022;
the Confirmation and Undertaking Letter signed by Lihong QIN on December 12, 2022; and
any modification, amendment and/or supplementary agreement to be subsequently executed by the relevant parties from time to time
in connection with the documents set forth in above sections 1 to 6 (the documents described in above sections 1 to 7 are collectively
referred to as the “Controlling Agreements”).
I hereby acknowledge and confirm that the equity interests held by my spouse in Anhui NIO Data now and in the future and any
interests attached thereto are my spouse’s personal property and do not constitute property jointly owned by me and my spouse, and that
my spouse has the right to dispose of such equities and any interests attached thereto at his sole discretion. I hereby unconditionally and
irrevocably waive any rights or interests to/in such equities and corresponding assets thereof which may be granted to me under any
applicable laws, undertake that I will not make any claim in respect of such equities and their corresponding assets (including a claim
that such equities and assets corresponding thereto constitute the property jointly owned by me and my spouse, and a claim, on basis of
the foresaid claim, for participation in the daily operation, management and voting affairs of Anhui NIO Data, or other form of influence
on my spouse’s decisions in relation to such equities and attached interests). I hereby further acknowledge that my spouse is entitled to
own and perform his rights and obligations under the Controlling Agreements at his sole discretion, and that neither my spouse’s
performance, further amendment or termination of the Controlling Agreements nor his execution of any other documents in substitution
for any of the Controlling Agreements shall require my further authorization or consent.
I hereby undertake that I will execute all necessary documents and take all necessary actions to ensure the due performance of the
Controlling Agreements (as amended from time to time).
I hereby agree and undertake that I will not conduct any act that conflicts with the arrangements under the Controlling Agreements
or this Consent Letter at any time. In the event that I obtain any equities of Anhui NIO Data and any interests attached thereto for any
reason, I shall be bound by the Controlling Agreements (as amended from time to time) and comply with my obligations as a shareholder
of Anhui NIO Data under the Controlling Agreements (as amended from time to time); and, for such purpose, I shall, upon NIO
Holding’s request, execute a series of written documents in substantially the same form and substance as that of the Controlling
Agreements (as amended from time to time).
I hereby further acknowledge, undertake and warrant that my spouse shall, in any circumstances (including but not limited to a
divorce between me and my spouse), have the right to dispose of the equity interests which he owns in Anhui NIO Data and the assets
corresponding thereto at his sole discretion, and that I will not take any action that may affect or interfere with my spouse’s performance
of his obligations under the Controlling Agreements (including but not limited to a claim for any equities of Anhui NIO Data or any
rights which are obtained through controlling contractual arrangement).
In the event of any dispute arising from the performance of this Consent Letter or in connection with this Consent Letter, either I or
any interested party is entitled to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. The arbitration tribunal shall consist of three
arbitrators to be appointed in accordance with the arbitration rules. The claimant and the respondent shall respectively appoint one
arbitrator, and the third arbitrator shall be appointed by the first two arbitrators through negotiations or designated by Shanghai
International Economic and Trade Arbitration Commission. The arbitration proceedings shall be conducted in Chinese in a confidential
manner. The arbitration award shall be final and binding upon the parties thereto. Under appropriate circumstances, the arbitration
tribunal or arbitrators may award compensation, injunctive relief in respect of each party’s equities, assets, property interests or land
assets (including restriction on conduct of business, restriction or prohibition of transfer or sale of equities or assets), or propose the
winding-up of the party concerned in accordance with the dispute resolution clause and/or applicable PRC laws. In addition, in the
course of forming the tribunal, either I or the interested party shall have the right to file an application to any court with competent
jurisdiction (including courts in Hong Kong, Cayman Islands and places of incorporation of the interested party (namely Hefei, China)
and places where either my or the interested party’s main assets are located) for the grant of temporary reliefs. During the arbitration
proceeding, this Consent Letter shall continue to be valid except for the part which is disputed by either the interested party or me and
pending for arbitration.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
(Signature Page of the Consent Letter)
/s/ Zhen CHANG
By:
Name: Zhen CHANG
December 12, 2022
Lihong QIN hereby agrees and accepts this Consent Letter:
By:
Name:
/s/ Lihong QIN
Lihong QIN
NIO Inc.
/s/ Bin LI
By:
Name: Bin LI
Title:
Chairman
NIO Holding Co., Ltd. and Anhui NIO Data Technology Co., Ltd. hereby agree and acknowledge this Consent Letter:
NIO Holding Co., Ltd. (seal)
By:
Name:
Title:
/s/ Bin LI
Bin LI
Legal Representative
Anhui NIO Data Technology Co., Ltd. (seal)
By:
Name:
Title:
/s/ Yu QU
Yu QU
Legal Representative
List of Principal Subsidiaries and Consolidated Variable Interest Entities
Exhibit 8.1
Subsidiaries:
NIO Nextev Limited
XPT Limited
NEU Battery Asset (Hong Kong) Co., Limited
NIO Power Express Limited
NIO User Enterprise Limited
NIO AI Technology Limited
NIO USA, Inc.
Instant Power Europe B.V.
NIO Nextev Europe Holding B.V.
NEU Battery Asset Co., Ltd.
NIO AI Technology Limited
NIO GmbH
NIO Holding Co., Ltd.
NIO Co., Ltd.
NIO (Anhui) Co., Ltd.
NIO Technology (Anhui) Co., Ltd.
NIO Financial Leasing Co., Ltd.
XPT (Jiangsu) Investment Co., Ltd.
Shanghai XPT Technology Limited
XPT (Nanjing) E-Powertrain Technology Co., Ltd.
XPT (Nanjing) Energy Storage System Co., Ltd.
NIO Sales and Services Co., Ltd.
NIO Energy Investment (Hubei) Co., Ltd.
Wuhan NIO Energy Co., Ltd.
XTRONICS (Nanjing) Automotive Intelligent Technologies Co., Ltd.
XPT (Jiangsu) Automotive Technology Co., Ltd.
Anhui NIO Autonomous Driving Technology Co., Ltd.
Consolidated variable interest entities:
Beijing NIO Network Technology Co., Ltd.
Anhui NIO AI Technology Co., Ltd.
Anhui NIO Data Technology Co., Ltd.
Place of incorporation
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
California, United States
Netherlands
Netherlands
Cayman Islands
Cayman Islands
Germany
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
PRC
Place of incorporation
PRC
PRC
PRC
Exhibit 12.1
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Bin Li, certify that:
1.
2.
3.
4.
5.
(a)
(b)
(c)
(d)
(a)
(b)
I have reviewed this annual report on Form 20-F of NIO Inc. (the “Company”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods
presented in this report;
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the
period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting; and
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons
performing the equivalent functions):
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial
information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
Company’s internal control over financial reporting.
Date: April 28, 2023
/s/ Bin Li
By:
Name: Bin Li
Title:
Chief Executive Officer
Exhibit 12.2
Certification by the Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Wei Feng, certify that:
1.
2.
3.
4.
5.
(a)
(b)
(c)
(d)
(a)
(b)
I have reviewed this annual report on Form 20-F of NIO Inc. (the “Company”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods
presented in this report;
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the
period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting; and
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons
performing the equivalent functions):
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial
information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
Company’s internal control over financial reporting.
Date: April 28, 2023
/s/ Wei Feng
By:
Name: Wei Feng
Title:
Chief Financial Officer
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 13.1
In connection with the Annual Report of NIO Inc. (the “Company”) on Form 20-F for the fiscal year ended December
31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bin Li, Chief Executive Officer of
the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to
my knowledge:
as amended; and
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
Date: April 28, 2023
By:
Name:
Title:
/s/ Bin Li
Bin Li
Chief Executive Officer
Certification by the Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 13.2
In connection with the Annual Report of NIO Inc. (the “Company”) on Form 20-F for the fiscal year ended December
31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wei Feng, Chief Financial Officer of
the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to
my knowledge:
as amended; and
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
Date: April 28, 2023
/s/ Wei Feng
By:
Name: Wei Feng
Title:
Chief Financial Officer
Consent of Independent Registered Public Accounting Firm
Exhibit 15.1
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-229952) and Form F-3 (No.
333-239047) of NIO Inc. of our report dated April 28, 2023 relating to the financial statements and the effectiveness of internal control
over financial reporting, which appears in this Form 20-F.
/s/PricewaterhouseCoopers Zhong Tian LLP
Shanghai, the People’s Republic of China
April 28, 2023
Exhibit 15.2
April 28, 2023
Building 20, No. 56 AnTuo Road, Anting Town, Jiading District Shanghai
201804, People’s Republic of China
Dear Sir/Madam:
We hereby consent to the reference of our name under the headings “Item 3. Key Information—D. Risk Factors—Risks Related to Our
Corporate Structure” and “Item 4. Information on the Company—C. Organizational Structure” in NIO Inc.’s Annual Report on Form
20-F for the year ended December 31, 2022 (the “Annual Report”), which will be filed with the Securities and Exchange Commission
(the “SEC”) on the date hereof, and further consent to the incorporation by reference, in NIO Inc.’s registration statement on Form S-8
(File No. 333-229952) and NIO Inc.’s registration statement on Form F-3 (File No. 333-239047), of the summary of our opinion under
the headings “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure” and “Item 4. Information on the
Company—C. Organizational Structure” in the Annual Report.
We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report.
In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated
thereunder.
Very truly yours,
/s/ Han Kun Law Offices
Han Kun Law Offices