And another thing is about the channels. If you look at our sales distribution, [Jiangsu, Fujian] (ph) and Shanghai, these three places basically contribute half of our sales volume. But for other provinces like in Anhui, the capital city itself is contributing around 80% to 90% of the sales volume. If we take Anhui as an example for other brands like BMW or Mercedez, half of their sales volume in Anhui province is contributed by cities outside of Anhui — sorry, outside of Hefei. And they basically have dealership stores in all the cities in Anhui Province. And for us, we opened — we’ve just opened our NIO House in the second largest city in Anhui province that is in Wuhu. In this case, we will need to take efforts in increasing our penetration into the lower-tier cities.
In addition to the sales channels, we are also developing and expanding our power swap networks into more cities. For the past several months, we’ve been developing our power swap stations in a much faster manner. And in August, we expect that we will deploy and install more than 100 power swap stations. Of course, it will take time for all these measures to kick in, but this investment will be very important for our long-term capability. Regarding your second question about power swapping versus faster charging, as we’ve always mentioned, that chargeable, swappable and upgradable have been the philosophy of our power solutions, and we’ve been choosing the optimal solutions and also the best experience for our users based on the actual scenarios and the use cases.
And as we are developing our power swapping network, we are also the automotive brand with the most public chargers in China, as I’ve mentioned in my opening remarks. Of course, we believe that with the development of the fast charging technology, it will also help us with the power swap operations as it can improve the service capacity of the swap stations. Not to mention that many of the stations we’ve installed as of today are integrated stations featuring both chargers as well as power swap. So, in terms of the power swapping and the faster charging, we’ve also had many discussions between these two technologies, but we believe that, so far, power swapping is still having a much better experience than faster charging, and it will continue to be a very unique advantage and the competitiveness of NIO.
Paul Gong: Thank you very much. That’s very helpful. Thank you, William.
William Li: Thank you, Paul.
Operator: The next question comes from Jing Chang of CICC. Please go ahead.
Jing Chang: Okay, thank you for your sharing. I have two following-up questions. The first is about our other sales revenue and profit margin. As we can see that after our policy adjustment, what is our expectation for the future revenue and also profit margin for other sales after our battery swap started to gain profit? And in particular, do we have any internal calculation of the profitability of the battery swapping business? So, what is the upward trend of our gross profit margin for other sales in the following few quarters? And when will it turn positive? This is my first question. And my second is about the technology improvement. We have always been focused more on R&D investment and also technology accumulation. So, looking forward regarding to our next generation platform, NT3, so what improvement can we expect?
What are the major areas of our effort to [proceed] (ph)? So, can you just share a few insights of information about that? This is my two questions. Thank you.
Stanley Qu: Hi, Jing. This is Stanley. Regarding your first question about the other sales, revenue and margin, as we mentioned, we canceled the free battery swap policies in Q3. So therefore, there will be more users to pay for battery swap services. And as the sales keep growing, we think more battery swap service revenue can be realized. But since it’s only one month from the policy adjustment, so we still need some time to observe and assess the impact of this policy change. Second is with the power swap station, the third generation put into operation starting from this April, we will accelerate the deployment of the power swap stations in the following quarters. And for this year, our plan is to build 1,000 stations. But at current stage, the capacity won’t be fully utilized. So, the losses from the accelerated construction of power swap station will increase. So, I think that’s basically the guidance for the other sales revenue.
William Li: [Foreign Language] [Interpreted] Actually, the inherent efficiency of the power swap business is pretty high. Before we have negative margin on this part, it’s mainly because when we were offering free power swaps, the electricity costs were also included in that offering. But now we are charging that separately. In addition, we are also charging our users RMB30 per swap as a service fee. Actually, we are seeing growing demand for such charged power swap services. Especially many used car users, they are actually using the service. So, the percentage for the users to use the paid swap service is also growing. It’s mainly a business for the existing users and existing population. For the third-generation power swap stations, we’ve also done a rough calculation.
When it completes 60 swaps per day, it basically can be breaking even, and its service revenues will be covering its operating costs. Right now, around 20% of our third-generation stations are able to realize such performance and capability. So, for the long run, we believe that power swap is also a sustainable business. As in addition to offering power swap services, we also have other diversified business models like we can leverage the energy storage. Regarding your second question about our next-generation technology, of course, we will be leveraging our full stack capabilities developed in-house. With that, we will continue to improve the experience and also the performance of our products. And we believe that this will give us a strong product competitiveness worldwide.
And also the continuous investment into the research and the development of the core technologies will also help us to optimize and improve the vehicle margin as well as improving the efficiencies of our operations and R&D. Thank you, Jing.
Jing Chang: Okay, thank you. That’s all my question. Thank you.
Operator: The next question comes from Edison Yu of Deutsche Bank. Please go ahead.
Edison Yu: Hey, thank you. I have one question. I’m wondering what is the management team’s openness to embarking on some more strategic action? We’ve obviously seen a lot of activity from the European OEMs in China trying to revive or restructure their efforts. And I also think in the context of — I think NIO has made some mistakes. We talked a lot about sales, the sales force today, we had a lot of supply issues last year, many of which are related actually to more traditional auto side. Can we perhaps benefit actually from having some more closer strategic relationships with some of the OEMs out there? Thank you.
William Li: [Foreign Language] [Interpreted] Thank you, Edison, for your question. Overall speaking, we are very open to all kinds of cooperations with peers in the industry. But so far, we don’t have much information to update or share with you. But if you look at our smart technologies as well as our charging and swapping networks, actually, we aim to use these technologies to catalyze the transformation of the entire industry. As we’ve also announced at the Power Day 2023, we are willing to open up our next-generation battery technologies as well as our charging and swapping networks to the entire industry. Right now, we are in some initial communications with certain OEMs. They are also thinking about using our battery technologies for swapping networks.
But to use that technologies, they need to adapt their products to our standards, which can take some time for them to make the final decisions. But overall speaking, we are very open to all kinds of cooperation. And in terms of our existing charging network, so far, 80% of our electricity are actually charged for the non-NIO users. Maybe you’ve also read this news recently in Xinjiang, Sayram Lake because it’s such a popular tourist spot, we have to limit access to our public chargers for the non-NIO users at certain timeframes, and that caused some complaints by the non-NIO users. But overall speaking, it’s also a very good example of showing our existing charging and swapping facilities are helping many EV users, not just the user from NIO.
Edison Yu: Great. Thank you.
William Li: Thank you, Edison.
Operator: As there are no questions now, I’d like to turn the call back over to the company for any closing remarks.
Eve Tang: Thank you once again for joining us today. If you have further questions, please feel free to contact NIO’s Investor Relations team through the contact information provided on our website. This concludes the conference call. You may now disconnect your lines. Thank you.
