Yuqian Ding: Okay. Got it. Thank you. The second question is on the OPEC reduction. Thanks for William’s sharing on optimizing the battery business. We also read there is also a headcount cut. Could you share more on whether there will be asset write-offs during the process of the cost optimization? And when we would expect us to reach a lean yet sustainable shape?
Stanley Qu: Hi Yuqian. About the cost optimization. We reduced 10% working positions and completed the adjustment in November. But for Q4 there will be almost no financial impact since we need to pay additional compensation for the employees who left the company. Offset with less payroll cost. But for next year together with the headcount reductions we also delayed or cancelled certain projects as mentioned by William. So the total impact to 2024 will be a total cost of around RMB2 billion.
William Li: [Foreign Language]
Unidentified Company Representative: Around 200 million. Yes. This round of optimization has helped us to improve the financial performance slightly over our previous budget. However, we do need to have some one-time expenses due to the severance package for the terminated employees.
Yuqian Ding: Got it. Thank you. Thanks William and Stanley.
Operator: The next question comes from Ming-Hsun Lee with Bank of America. Please go ahead.
Ming-Hsun Lee: Hello William and management. Thank you for taking my question. My first question is regarding your second brand, ALPS, in 2024. In the future, will you consider to share the charging station and the battery stop station along with NIO brand? And also, will you also consider to share the sales channel with NIO brand? Thank you.
William Li: Thank you Ming. [Foreign Language]
Unidentified Company Representative: Yes. When it comes to our mass market brand the – out. Actually recently we have just had the very first validation field of this brand real of the production line actually of the condition of this verification view this is pretty good. It can be maybe one of the best VB [Ph] cars we have in the history of NIO. So we are very confident in the competitiveness of this project. And before the official launch and the delivery we still have time to continue to optimize and improve the project. In terms of our power swap and charging network strategy, for NIO, our battery swap network will be coming in two parts. The first is the exclusive network for NIO and NIO users. And the second will be a shared network, not only for NIO users, but also for ALPS users and other brands with swappable vehicles.
In terms of the charging network, we have been sharing our chargers already to many non-NIO brands. In terms of the self-network, this will be separated. So they will have their own self-stores. But we will be sharing the service capacities and the facilities. So service centers will be shared between NIO and ALPS.
Ming-Hsun Lee: Thank you, William. Thank you. So my second question is regarding your 2024 product. Because this year you already updated all of your new models and also launched some new models. So in 2024, will you have some facelift version of the existing model and start to use 800-voltage charging system on your car? So in this case, do you have any guidance about the battery swap station you will expect? Thank you.
William Li: [Foreign Language]
Unidentified Company Representative: Yes, it’s a common standard and the practices for the automotive industry to have model years or facelifts. But for our NT2 products, we will not have any major modifications or upgrades. As many of them were just newly launched or delivered to the market. To stabilize our quality and the supply chain, we will only make minor improvements and upgrades on our NT2 products. In terms of our plan for the power swap stations in 2024, as I’ve mentioned, we will not only build our exclusive battery swap network, but also a battery swap network for sharing. On the one hand, we will build this power swap network for other brands, or that can be shared with other brands. In the meantime, we will also continue to look at the demand of our NIO users. So that if there are any requirements or high demand stations or locations, we will also install stations there. But we are still working on the specific plans and the numbers.
Ming-Hsun Lee: Thank you William.
Operator: Our next question comes from Paul Gong with UBS. Please go ahead.
Paul Gong: Hi, thanks. Thanks for taking my question. My first question is regarding your sales force, sales team. I think in last quarter’s earnings, you mentioned that you are going to significantly increase your sales people’s headcount. May I double check how this has been proceeding at this moment? Have you achieved your original target of expanding sales team or have you adjusted your original plan?
William Li: Thank you, Paul. [Foreign Language]
Unidentified Company Representative: At the present, for our frontline fellows, we have a team of around 5,700 persons. But many of them were just newly on board. Around 3,300 of them were newly on board into the company. It still takes some time for them to really get to know the brand and also get familiar with the entire sales processes. Because for the newly hired fellows, we will spend around one month and a half on the trainings. And afterwards, we can start to sell vehicles to our users. According to our history data, a seasoned fellow on average will need to spend around six months to be familiar with the brand and the processes, and will become a real sales force for the company. So we need to be patient with these newly hired fellows, as many of them just joined the company in September and October.
But in the meantime, we will also be completing and improving our assessment and evaluation systems. Our training systems. We will also bring these fellows more efficient tools, so that they can really make full use of their sales capacity and capability.
Paul Gong: Thanks. My second question is regarding the R&D spending. I think this quarter you had about RMB300 million, quarter-over-quarter decline on the R&D. And the explanation is some incentives from the local government. Can you quantify that number? And more importantly, going forward, what would be your projected quarterly R&D spending?
William Li: Stanley, you answer the question.
Stanley Qu: Yes. There are some slight decreases, considering the support we received from the local authorities. But in the long run, as we mentioned during the past earnings quarter, our non-GAAP R&D investment per quarter will also be kept at RMB3 billion to RMB3.5 billion. As mentioned by William in the previous statement, we will also ensure investment in core technologies and also the advantages of technology and product and guarantee the timely launch of the new product. So the investment in R&D will not decrease. There will be a slight fluctuation across different quarters. Thank you, Paul.
