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Stanley Qu

Thank you, William. Let's now review our key financial results for the fourth quarter of 2024.
Our total revenues reached RMB19.7 billion, increased 15.2% year over year and 5.5% quarter over quarter. Vehicle sales were RMB17.5 billion, up 13.2% year over year and 4.7% quarter over quarter, primarily driven by higher deliveries, partially offset by a lower average selling price due to changes in product mix.
Our other business segments also delivered solid performance. Other sales were RMB2.2 billion, grew by 33.8% year over year and 12.7% quarter over quarter. The annual growth was from increased sales of parts, accessories, aftersales vehicle services, and provision of power solutions, along with a rise in sales of technical R&D services. The increase quarter over quarter was driven by higher sales in technical R&D services, used cars and other parts, accessories, and aftersales vehicle services.
Looking at margins, vehicle margin was 13.1% in this quarter, compared with 11.9% in the Q4 last year and unchanged from last quarter. The year-over-year increase was mainly due to lower material cost per unit. Other margin turned positive this quarter, mainly due to the increase in the provision of technical R&D services, as well as the sales of parts, accessories, and aftersales vehicle services, with relatively higher margins. Overall, gross margin was 11.7%, up from 7.5% in Q4 last year and 10.7% last quarter.
Turning to OpEx, R&D expenses were RMB3.6 billion, decreased 8.5% year over year and increased 9.6% quarter over quarter. The year-over-year decrease was mainly driven by reduced personnel cost and design and development cost, while the quarter-over-quarter rise reflects additional investment in design and development, partially offset by the decreased personnel cost.
SG&A expenses were RMB4.9 billion, up 22.8% year over year and 18.7% quarter over quarter. The year-over-year increase was mainly driven by increased sales and marketing for new brands and products and higher personnel cost from sales and service network expansion. The quarter-over-quarter increase was mainly due to the enhanced sales and marketing efforts and higher professional services costs for general corporate functions.
Loss from operations was RMB6 billion, down 8.9% year over year and up 15.2% quarter over quarter.
Interest and investment loss was RMB0.2 billion, compared with investment income of RMB1.4 billion in 2023 Q4 and RMB0.3 billion in 2024 Q3, primarily due to the fair value change of equity investment. Other loss, net, in Q4 was RMB0.5 billion, primarily due to the loss from the revaluation of overseas RMB-related assets caused by the depreciation of RMB against US dollars this quarter. Net loss was RMB7.1 billion, showing an increase of 32.5% year over year and 40.6% quarter over quarter.
Lastly, we ended the quarter with total cash and cash equivalents, restricted cash, short-term investment and long-term time deposits amounting to RMB41.9 billion.
That wraps up our prepared remarks. For more information and details of our unaudited fourth-quarter and full-year 2024 financial results, please refer to our earnings press release.
Now, I will turn the call over to the operator to start our Q&A session. Thank you.

Question and Answer Session

Operator

(Operator Instructions) Tim Hsiao, Morgan Stanley.

Tim Hsiao

Hi. This is Tim from Morgan Stanley. Thanks for taking my question. I have two questions. The first question is about cost reduction effort because a lot of market focus is put on NIO's latest round of restructuring. So I just want to know that how much of cost saving would management expect to achieve? And when are we going to see the contribution emerging in upcoming quarters? That's my first question. Thank you.

Bin Li

(interpreted) Thank you for the question. Regarding the cost reduction, actually, since last year, we have already started the cost mining initiatives, and for the 2024 full year, we were also on track for the cost reduction initiatives. As you can see, in our vehicle margin, for Q4, it has fulfilled our expectation, and we will continue such cost reduction actions this year from multiple aspects, including supply chain, R&D. In that case, we foresee that our vehicle margin will also continue to grow starting Q2.
In terms of expenses, actually, in Q4 last year, as we have launched the new brand, ONVO, together with its product, we have started to make investments and expenses in developing its sales and service networks, as well as in the brand-related activities. Such activities and expenses will continue in Q1 this year, including of the NIO brand and also the sales and service networks.
But in the meantime, starting Q1 this year, we have started an all-employee comprehensive cost reduction initiative covering R&D, supply chain, sales, and also service teams. We call it CBU or cost business unit. Basically, we ask all the teams and employees to take the ownership and accountability of the company's operational targets. We already have seen some good results and actions taken voluntarily by the R&D teams, by the sales and service teams in reducing the cost and improving the efficiency.
And the results of such actions will be reflected in our balance sheet in the coming quarters starting Q2. As we continue to strengthen our cost control and also expenses management in the second half of this year, together with improvements in the sales volume, in the vehicle margin, as well as in the expense control, we are confident that we are going to achieve our breakeven target in Q4.

Tim Hsiao

Thank you. My second question is about ONVO. I just want to know what actions could ONVO take to regain the growth momentum? Will NIO stick to the [bounty] brand strategy, or it could potentially change ONVO to a sub-brand onto NIO to save cost and enhance efficiency? So that's my second question. Thank you.

Bin Li

(interpreted) Thank you for the question. Regarding ONVO, its sales performance starting this year didn't meet our expectations, and we have also reviewed the comprehensive reasons and causes for its performance.
The first reason is because of the brand awareness and exposure. As ONVO is still a new brand, in terms of its brand awareness and awareness, it is actually far below its competitors. We have also done some study and research on the influence of the brand awareness of ONVO, and in terms of the brand awareness, it is only one-third of that of NIO. In that case, as we consumed all the existing order backlogs, we are facing larger pressures regarding the fresh orders.
Starting this year, especially during and after the spring festival holidays, we have also taken a series of actions to help strengthen and improve the brand awareness and exposure. We have rolled out some offline advertisements in train stations and also in the elevators of apartment buildings. We have also doubled down on the social media campaigns to help improve the exposure, and we are seeing some good effects in helping ONVO being more famous and well-known.
The second reason is regarding the coverage of the points of sales. We have been ramping up the sales store coverage of the ONVO brand. Last year, when we just launched the brand, we had around 105 stores in China, and by the end of last year, we have opened up another 100 stores. And so far, we have more than 400 stores in China. Yet, most of the stores are still quite new in terms of their efficiencies and productivity. They are not yet to a mature level, so it will take some time for these new stores to start to yield real results.
We have also done a comparison between a mature store being in operations for more than three months in comparison to a newly established store. The productivity can be as different as three times. As these new stores get more mature and skillful, we believe that they will also start to play a bigger role. As you can see, we have made some investments in our sales and service networks in Q4 last year and also Q1 this year. And we've been under the pressure for this investment and expenses, yet we also believe that these stores and the network will soon start to yield results and taking with effects.
The third reason is also relevant to the maturity that is regarding the maturity level of our sales force. For the fellow teams of the ONVO brand, 60% of them have been in the company for less than three months, and it will take some time to train the team and for the sales teams to polish their sales skills to be able to yield good results and make deals.
As the team is getting more mature day after day, we also see that more and more fellows are now able to making deals. And we also encourage these fellows to do more proactive outreach by going out of the stores to actively reach out to the potential users and help expand the funnel, and this will also help us to improve the order performance.
For this year, if we look at the month-over-month trend for the number of fresh orders, it has been increasing steadily. And in terms of the number of test drives that we've been receiving and doing month over month, it is also breaking the record, and we believe that these fresh orders and test drives will also soon be converted into orders and sales volume.
And the fourth reason is regarding the Power Swap station's availability for the ONVO users. As in the past several months, we've been making more progressive modifications on the Power Swap stations to make sure that they are compatible with the ONVO product and also providing more batteries for the swap stations. Now, more than 1,500 Power Swap stations in China are available for ONVO users.
And also, at the early stage of the product launch, we had the short supply of batteries. In that case, there was only one battery for the available Power Swap stations, not enough for the ONVO users to experience the full Power Swap service. But now, we are supplying more batteries for the Power Swap. In that case, the experience for the Power Swap among ONVO users are also improving, also enhancing a better word of mouth for the brand.
And also, in many regions where we see more Power Swap stations available for ONVO users, we also see actually more sales volume for the ONVO products. Together with our Power Up Counties initiative, we believe that with more Power Swap stations available in the lower-tier cities, this will also help improve the penetration rate of ONVO in those lower-tier cities.
And a very interesting number to share with you is that, actually, in 12 regions in China, the sales volume of ONVO has already outnumbered the volume of NIO. This is also a good effect or result of our dual-brand synergy and also strategy.
Also, another factor is that our recent sales volume is majorly affected by the fierce competition as well as the negative public opinion on the brand and also PR attacks. That has affected our volume by around 30% to 40%.
But still, even against this difficult environment, we still see a very high user satisfaction on the product L60. Actually, L60 has the highest product user satisfaction among all the products launched by the NIO company, and we also see a pretty good referral rate on the L60. This has given us confidence on the product going forward.
As we pick up speed with our orders and also test drives as we further enhance the brand awareness, expanding our sales and service network, growing our team and their maturity level, and also enhance the coverage and availability of the Power Swap stations for the ONVO users, we believe that the sales volume of L60 will pick up and also fulfill our expectations.
And regarding your question on the efficiency improvement and also the synergies can be leveraged between two brands, actually, in terms of the aftersales services, Power Swap stations, as well as the supporting functions such as finance, human resources, and some regional functions, this has been shared across two brands from the beginning. And recently, we are also making further adjustments in some regions for the supporting and management roles. We are also trying to have one team to oversee both brands, and we see some good effects by having one team overseeing two brands in terms of the sales and service management.
And in terms of the point of sales of ONVO or the sales network of ONVO, we will keep it separated and independent of the NIO brand, as these two brands are targeting different user groups and also are from different brand segments. Recently, we are also having some pilot programs where we have the incentives and the policies to encourage the sales team to also sell the product from the other brands. We already see some good results by rolling out the pilot program.
Thank you, Tim.

Operator

Bin Wang, Deutsche Bank.

Bin Wang

(spoken in foreign language) My first question is about your guidance about gross margin, including vehicle gross margin and overall gross margin. Meanwhile, you mentioned that and here we are -- even in the number four quarter this year. So what's your assumption in terms of gross margin and volume?
(spoken in foreign language) And my second and last question is that, previously, you guided that your 2025 volume will be double year over year. After the first quarter, can you provide an update on the volume guidance? Thank you.

Stanley Qu

(interpreted) Thank you for the question. Regarding your questions on the vehicle margin, normally, Q1 is the off-season in the sales of the vehicle products. And also, in Q1, we are in between generations for our 5 and 6 Series as they will soon be upgraded to the model year 2025 to clean up the inventories for the existing generation. We are also under pressure regarding the vehicle margin for the NIO brand.
And in terms of the ONVO brand, as William has mentioned, the sales performance of the ONVO product didn't meet our expectation in this year, considering the amortizations and other factors. So we are also under pressure and a challenging situation managing the ONVO product and its vehicle margin.
So overall speaking, the company's vehicle margin in Q1 will not be as good as you would expect it based on our margin performance in Q4 last year. But still, our full-year target is to achieve breakeven in Q4. In that case, we have also mapped out a roadmap of our product margin. For the NIO brand, we would like to achieve a vehicle margin of 20%, and for the ONVO brand, it will be 15%.
Regarding the actual actions that we have taken to control the cost and also improve the vehicle margin, there are several actions. The first is to implement a more systematic cost reduction initiative by making our products more platform-based and improving the commonalities across different products and also across brands. There are several examples. For example, we have implemented an overall platform strategy for the seats. Now, the products from the NIO brand and ONVO brand share the same seat structure. With that, we are able to reduce the total BOM cost for the seat system by 10%.
The second example is regarding the smart hardware. We have standardized the interfaces of most of the smart hardware in the vehicles. In that case, we can further reduce the cost on the cables and connectors. The piece price per vehicle is reduced from RMB2,000 to only RMB1,000.
The third example is regarding the in-house developed parts and components. As we have been making efforts in doing in-house development in the past two to three years, we also see a very helpful cost reduction result over the past two years. For example, ET9 will soon be delivered with the NX9031, our chip for the smart driving. This chip will also be available on the model year '25 for the 5 and the 6 Series product, our volume product. In that case, the piece price will be decreased by around RMB10,000 in comparison to the 4R ring solution.
In addition to these cost reduction measure, we are also taking some systematic measures. For example, we have a very capable team doing cost management analysis and engineering. Starting 2023, we have been enabling and empowering the team. And now, the team directly reports to me for any quotation where nominating prices surpassing the cost estimation results by 7.5%, such nomination decisions will need to be escalated to the EC level for the joint approval. With all these measures taken together, in 2024, we managed to reduce our BOM cost by 10%, and we will continue such efforts in 2025.
The second major action or the second major contributor of improved vehicle margin will be contributed by the launch of our new models. As mentioned by William, this year, we are going to introduce and launch nine new models, including completely new models as well as the model year facelift. For the model year facelift, they will help improve the overall cost for these existing models. And in terms of the new models, in the second half of this year, the NIO brand is going to ONVO and introduce a major product with actually higher margin, as well as more elevated brand and product positioning. This will help improve the overall vehicle margin of the NIO brand.
And for the ONVO brand, in Q2, actually in April, they will unveil their second brand, L90, and then start to deliver this product in Q3. And in the meantime, in Q4, ONVO is going to introduce another product. Both products from the ONVO brand will target higher-margin and also higher-priced segments. This will also help improve the overall product margin for the ONVO brand. So together with the cost reduction actions that we've been taking, as well as the margin increase driven by the new products, we will gradually achieve our margin targets in Q4 and also for the full year.

Bin Li

(interpreted) Regarding your questions on the sales volume and the guidance for this year, in Q1, our sales guidance is to achieve a year-over-year growth of 36% to 43%, so around 40% year-over-year growth, for the deliveries in Q1. As for the full year, our target is still the same, just to double the sales volume from last year.
And there are several drivers behind this. The first is the new car effect. As we've mentioned, this year, we are going to introduce nine new products under three brands. Starting next week, we are going to deliver ET9. And with the launch and delivery of these nine new models, we will be able to fill up our sales volume for this year.
The second key driver is regarding the ONVO brand, as we are improving the overall sales network and service network of ONVO, enhancing the maturity level of the team and also strengthening its brand awareness. It will also gradually yield better results, even if it didn't fulfill the sales target we set for Q1, yet we are confident in the continuous improvement in the ONVO brand.
And also, a further comment on the key driver behind the sales volume is the network effect of our Power Swap network and the recharging network in general. If you look at the cumulative sales volume of the NIO brand and the distribution of the sales, actually, half of this volume is contributed by the sales in the Yangtze River Delta area. For the Jiangsu province, we have already achieved the Power Up Counties plan, which means that in every county in Jiangsu province, there is at least one Power Swap station. And for the Zhejiang province, we aim to achieve also county-level coverage by end of this month, except for two islands where they will not have the Power Swap stations.
Also, for the Power Swap strategy in general, as you may know, our recent strategic partnership with CATL, this will further help us to expand our reach in the county levels with our Power Swap facilities. In the first half of this year, our Power Swap network will cover the counties of more than 10 provinces in China. And by the end of this year, cumulatively, 27 provincial-level divisions will have Power Swap stations available at the county level.
The network effect of these swap stations will play a very important role because we have already proved that, last year, we doubled our efforts on the Power Swap network in bigger provinces like Hubei and Anhui provinces. We already see some good results. Before, the swap stations were merely available in big cities, but then we find that the county-level coverage is more important in promoting the sales.
For the sales volume in these two provinces, after we achieve the county-level coverage, their sales volume is far above the average. And this year, we will continue such efforts to cover more counties in more provinces, especially big provinces like Henan, Shandong, and Sichuan. With that, we will help improve the overall market share and the market reach of not only the NIO brand, but also the ONVO brand.

Stanley Qu

Especially ONVO brand.

Operator

Paul Gong, UBS.

Paul Gong

Hi, William. Thanks for taking my question. The AI and robotics has been a very hot topic in this early season. In one of your peers' earnings call, the AI has been mentioned 49 times during the whole call, but I guess it hasn't been mentioned here. Can you please remind us your latest thoughts on the AI, autonomous driving, robotics, et cetera?

Bin Li

(interpreted) Thank you for the question. Regarding the application of AI technologies, NIO is the first car company to introduce an AI companion in the car. It's NOMI, and it's loved and well received by many users. For NOMI, it has its own large language model capabilities, NOMI GPT, but on top of that, it is also supporting third-party large language models. With that, the satisfaction and also the interaction rate of NOMI is growing. NOMI is also a quite profit-making IP with a lot of popular merchandise and also high take rate.
And in addition to the AI application on NOMI, we also have AI applied to our smart driving technologies and experience, as last year, we have introduced the NIO WorldModel, NWM, and the latest AD version with smart driving release will be based on the NIO WorldModel. And actually, I have participated in some internal beta version tryout, and I can say that I really look forward to that version. It has quite good performance in terms of the active safety and the experience in general.
Of course, AI is a very important basic capability in terms of AGI, in terms of robots, in terms of the fundamental capabilities for AI. But for the foreseeable future, for us, we will mainly focus on our core business, that is the automotive product. In that case, AI will be more of an enabler to achieve better product experience as well as better business and management, as AI itself is one of our 12 full-stack capabilities. It is ever-present in every aspect of our business.
As many people are talking about how the automotive product is becoming an AI agent, I believe that the company itself is also turning into an AI agent. But still, for the short term, our primary focus is still our core business as well as our operating target.
But a side note here is that NIO Capital has invested in a lot of AI companies, especially industry-leading AI companies. And in that case, we are in close contact with the cutting-edge technologies and also the outstanding funding teams in the AI arena. And in-house, we also have capable AI talents working on the relevant field.
Thank you, Paul.

Paul Gong

Sorry, my second question is regarding the number of models. I think the company has eight models at the same time right now. And after this year's new model launch, it will move into some mid-teens. Given the cannibalization between each other, and also one of the peers has demonstrated with even only one single model, the volume could still be achieved.
Shall we consider to concentrate more into some blockbuster models and eliminate some of the less popular models to be more focused? What do you think is the most optimal number of models for each of the brands?

Bin Li

(interpreted) Thank you for the question. As we now have three brands -- NIO, ONVO and Firefly -- our overall product strategy and portfolio for these three brands will also be quite different as it is also dependent on their respective segment and also brand positioning.
For the NIO brand, we will basically keep the existing lineup, spanning from RMB300,000 all the way to RMB800,000, and it will covering for me, for family, and for business segments. With ET9 being delivered, we are completing this price coverage from RMB300,000 all the way to RMB800,000 price segments in the premium market.
For the premium market users, they actually care more on the personalization and also the unique identity of the vehicle products. If you look at other premium brands like BMW and Mercedes, they actually offer 40, 50 products in their lineup. So for this segment, users care more about the differentiation and also the personality of their products.
As for the ONVO brand, we will be more careful with the number of products in the lineup. This year, we are going to introduce two new products under the ONVO brand. Together with L60, there will be three products in the lineup by end of this year, and we will not drastically increase or expand the existing portfolio, but to control that within a reasonable range.
As for the Firefly brand, it is a high-end small car brand. In that case, it's not necessary to really offer too many different products. So our overall strategy is to have a differentiated product portfolio and lineup for different brands, but overall maintaining a rather stable and reasonable product lineup across three brands. But for each model, there will be also emphasized highlights and also targeted user group.
Thank you.

Operator

Yuqian Ding, HSBC.

Yuqian Ding

(spoken in foreign language) The first question is about cash position, supply chain perspective against that, and also potential financing. So we see our net cash position at above RMB25 billion. But given the volatility between quarters, the supply chain coming from more conservative perspective and how sustained -- would that require additional financing, no matter if it's debt or equity? Can we have a little bit more clarification on that?
(spoken in foreign language) Second question is about the CapEx guidance. Can we see a little bit of breakdown into a refreshed CapEx guidance this year? We talked about a commitment into swap network. But since we signed the collaboration with CATL, can we leverage partnership to do some CapEx building? Can we expect the CapEx to taper off this year? Thank you.

Stanley Qu

(interpreted) Thank you for the question. Regarding your first question on the cash reserves, by the end of 2024, our cash position was RMB49.1 billion. In Q1, as we see the decrease in the sales volume quarter over quarter, we did experience an operating cash outflow. Yet, as we have introduced that this year will be a pivotal year for our product launch, as we witness the rebound starting in Q2, we will also see major improvement in the operating cash flow.
Also, as we have previously introduced, starting Q1 this year, we have conducted a series of adjustments and also streamlining activities. This will also be reflected in our financial performance starting Q2. Overall speaking, we will be prudent with our cash flow management to make sure that our resources can sustain our continuous growth and development.
Regarding your second question on the fundraising, we have various options -- fundraising channels for the capital markets, for the US capital markets, RMB capital markets, public or private. We will be planning our fundraising requirements and activities according to the operations of the company, as well as the changes in the market.
Regarding the question on CapEx, as we have mentioned that this year we will launch major products, in that case, we have made the CapEx spending in the toolings and also the production equipment together with our supply chain partners. In the meantime, as we are launching new products, our third factory is also going to be put in operation depending on the overall production plan. So our CapEx this year will be higher than last year, but still, we will have a very prudent measure and manner in managing our investment pacing and also our cash position to make sure that we have a very good control over the spending.
In terms of the CapEx for the Power Swap stations, starting last year, in terms of the Power Swap network expansion, we have already started to adopt one principle, that is to leverage the resources of our Power Swap partners as much as possible. Last year, we have announced the Power Up Partners plan where we invite the partners to jointly build the swap stations and the network. For the Power Up Counties plan this year, most of the stations will actually be sponsored or built by our partners than by ourselves. In that case, the CapEx utilization for the Power Swap stations will also be relatively limited.
Thank you, Yuqian.

Operator

Ming Hsun Lee, Bank of America.

Ming Hsun Lee

(spoken in foreign language) So first question is regarding your autonomous driving technology plan. When do you plan to roll out your end-to-end model? And in the future, do you consider to use the Thor chips in your car or you will use your Shenji chips in all of your NIO branded models? Thank you. That's my first question.

Bin Li

(interpreted) Thank you for the question. Actually, last year, we have already implemented the end-to-end solution to our active safety features. As different companies may have a different priority or force ranking on the technology applications, for us, we believe that safety matters the most. That's why we have implemented the end-to-end model firstly in our active safety features, and we did see major improvement regarding the safety level week over week by 40%. So it is playing a very important role in providing a safer trip for our users.
In terms of the end-to-end solution-based Navigate on Pilot Plus for the city roads, we have also started small-scale testing and internal testing. We plan to release that to our users by the end of April after a series of preparations and also approval applications.
Regarding the use of the chip for smart driving, ET9 is going to premiere our in-house developed chip for the smart driving. It is made with advanced manufacturing process, NX9031. After ET9, our 2025 model year, the 5 and 6 Series will also be launched and equipped with the in-house developed chip for the smart driving. So all the future new models will be equipped with this in-house chip. As for the ONVO brand, currently, it is using the Orin X chip for the smart driving functionalities and it does not have plan to use Thor.

Ming Hsun Lee

Thank you. My next question is regarding the OpEx. Because in the past few quarters, we continue to see your gross margin continue to improve QoQ. But for the operating expense, do you have the latest guidance and a new plan? For example, in the past, William mentioned that the stabilized R&D will be RMB13 billion every year. Could you give any new update for this number? And also, for the sales and marketing expense, do you have any target ratio -- OpEx ratio for this number? Thank you.

Stanley Qu

(interpreted) Thank you for the question. Regarding OpEx, in terms of the R&D funding and expenses, for this year, we will continue to have the same intensity level for the R&D expenses, around RMB3 billion every quarter on the non-GAAP basis. Of course, as mentioned by William, this year, we have rolled out the CBU mechanism where we emphasize more on the project with high return and also high yield. In that case, we will also optimize our project initiation and approval process to make sure that our R&D expenses are reasonable and also efficient.
Regarding the SG&A expenses, we did have bigger challenges to manage in the first quarter of this year. As Q1 is normally the off-peak season for the sales, the overall volume in Q1 is not so high. In that case, the SG&A expenses account for a bigger part to the sales revenue.
Also, in this quarter, we are still building up and expanding the sales and service network, as well as growing the sales force capabilities for the ONVO brand. In that case, ONVO's SG&A expenses are also higher. But as we have introduced, we are going to take a series of actions to improve the efficiency and the productivity of the teams and also to streamline the non-frontline sales functions to consolidate some of the sales functions between the NIO and the ONVO brand and also to leverage NIO's network for the sales of Firefly.
With all these actions taken, we expect the better results to be reflected in our financial performance in the coming quarters. As we grow our sales volume and also gradually achieve the breakeven target in Q4, you will also see SG&A accounting for smaller portions to the sales revenue. And with that, you will see also the effect reflected by the improvement in both volume and also in the efficiency of people and expenses.

Operator

Jing Chen, CICC.

Jing Chen

(spoken in foreign language) So my question is regarding to the other sales -- other revenues. And we can see that, in the fourth quarter, the gross profit margin of other sales has already turned positive and reached 1.1%. So could you please break down the reasons for this?

Stanley Qu

(interpreted) Thank you for the question. Regarding the gross margin of other sales, it mainly consists of three things: the revenues from the aftersales services, revenues from the power services, and also revenues from the technical services we provide to the supply chain partners and also to affiliated parties.
And in Q4, we have the positive margin on other sales. It's mainly because we have been continuously improving the efficiency of the aftersales services. Of course, in terms of the Power Swap -- the power service in general, as we are still making advanced deployment of the facilities and infrastructure network, the loss is actually not significantly narrowed from the power perspective.
And for the other sales to be with positive gross margin in Q4 last year, it's mainly because of the revenues from our technology services provided to the partners and also the affiliated parties. It's around RMB220 million in Q4 last year, yet such revenues are more project-based, and also it's relevant to the cadence and the progress of the services we provide to them. In that case, in the future, there will be also similar revenues, but it will not be a recurring regular revenue from that perspective.
In 2025, as we continue to increase our vehicle population, we also foresee continuous increase in the efficiency of our aftersales services. As for the power networks, as we are still making advanced deployment of the Power Swap stations, we will still encounter slight loss-making with the combined margin of the aftersales services and the power services if we exclude the technical services. In terms of the technical services, if we can make major deals or if we can make major progress, probably there will be some good news to disclose.
Thank you.

Operator

Tina Hou, Goldman Sachs.

Tina Hou

Thanks, management, for taking my question. I have a quick one just regarding our longer-term outlook. Say, by 2030, do we still maintain our previous, I think, volume and margin outlook? And could you please remind us of your revenue scale -- sorry, your sales volume scale target as well as your maybe overall growth margin as well as operating margin? Thank you.

Bin Li

(interpreted) As right now, the company is still striving to be breaking even in Q4 this year. If we set for a longer-term outlook for the future, we believe that for the smart EV companies or for the automotive industry in general to maintain a relative competitive edge among the competitions, an annual volume of 2 million units with 20% growth margin, 7% to 8% net margin, that will be a baseline for a smart EV company to survive for the longer term.
Thank you, Tina.

Tina Hou

Thank you. Thank you, William.

Operator

Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.

Rui Chen

Thank you so much for joining us today. If you have further questions, please feel free to contact NIO's IR team through the contact information on our website.
This concludes the conference call. You may now disconnect your lines. Thank you.

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.