So some users are choosing probably some other NIO brands or some traditional brands of our products. This is one factor. And another factor is internal cannibalization or competition. For example, some ES7 users may decide to choose ES6 instead of the ES7, and for some ET5 users, probably they decided to wait a little bit for the ET5 Touring. This is the situation that we’re facing right now. That is why we decided to probably — we’re going to make some adjustments in the near term in terms of our sales channel and network as well as our organizational structure and our sales and marketing strategy and policies. But for the five new products based on the NIO Technology platform 2.0 that we launched this year, we do not have this concern. The first product we launched this year is EC7.
After the delivery of EC7, we can see the demand is actually quite stable. As for the ES6, just now I have mentioned that we are very confident about the sales performance of ES6 after the product ramp-up. And then, for this year, we are very confident of our speaking for all the new products we launched this year, including the ES8. We’re about to start the delivery of the ES8 in the near term. And currently, we can see that the reservation order performance is actually higher than our expectations. We believe, right now the current pace of our product quality and the product go-to-market is actually much better than before. So, we believe for these five new products based on the NT2.0 technology platform should be able to reach reasonable performance in terms of the delivery ramp-up.
And recently, we have also launched 2023 ET7. After the delivery of ET7, we believe it can also meet our expectations and the auto performance is also quite stable.
Paul Gong: [Foreign Language] Sorry, I forget to translate. So, my second question is regarding the margin outlook of the high-end NIO brand versus the low-end ALPS brand. NIO brand remains to be relatively expensive, thanks to the branding and the excellent service company has been offering, but yet to achieve on satisfactory or kind of like excellent margins. So, when you’re moving towards ALPS to the relatively lower end, how do you foresee the margin would be like, especially compared to the high-end ones? Thank you.
William Li: [Foreign Language] [Interpreted] Thank you for your question. Regarding the brand positioning, I believe right now is a very chaotic period for the brand positioning. For the users — for most of the users, the majority of the times they choose a product based on the price. So, right now, in terms of our product, our service as well as our technology and experience, we believe we are much better than others in those different areas, but the values of our product and services and the technologies are not reflected in the perceived value and the price of the products. This is the reality that we’re facing right now, but we believe for the long run, the value of our product and services will be recognized by the users and by the market.
At the same time, we do face some challenges in the macro environment. For example, the lithium carbonate cost has significantly impacted our vehicle gross margin. Back in 2021, we have reached around 20% vehicle gross margin. At that time, we believe the lithium carbonate cost goes back to a reasonable level, we should still have a chance to reach 20% vehicle gross margin. In the long term, we believe in terms of the economies of scale and the efficiency improvement as well as the vertical integration of our core components and the in-house R&D capabilities, there is a strong base for us to achieve a 20% vehicle gross margin. That’s for NIO. But for ALPS, the strategy is very different, because we believe that in terms of the vehicle gross margin, it’s actually more about how you define the products and how we design the product.
