TAXATION

Schedule of reconciliation of the differences between statutory tax rate and the effective tax rate


	For the year ended December 31, 2025
	RMB	%
PRC statutory income tax rate*	2,295,944	25.0
Foreign Tax Effects
United States
—Statutory tax rate difference between United States and PRC	(14,068)	(0.2)
—Qualified Section 45X credit	960,225	10.5
—Other permanent differences	(251)	(0.0)
Malaysia
—Statutory tax rate difference between Malaysia and PRC	(4,930)	(0.1)
—Change in valuation allowance	(105,067)	(1.1)
Other foreign Jurisdictions	(138,409)	(1.5)
Effect of cross-border tax laws	(243,257)	(2.6)
Change in valuation allowance	(197,160)	(2.1)
Effect of tax holiday for subsidiaries	(321,027)	(3.5)
Effects of changes in rates enacted in the current period	(40,797)	(0.4)
Nontaxable or Nondeductible Items
—Tax deductions for research and development costs	129,225	1.4
—Other permanent differences	(99,480)	(1.2)
Effective tax rate	2,220,948	24.2


		For the year ended December 31,
		2023		2024
		%		%
PRC statutory income tax rate*		25.0		25.0
Effect of permanent differences:
—Share-based compensation expenses		0.6		(3.3)
—Change in fair value of convertible senior notes		0.1		31.3
—Accrued payroll and welfare expenses		0.1		0.1
—Change of enacted tax rate and preferential tax benefit		(1.4)		(80.8)
—Other permanent differences		(0.3)		93.3
Difference in tax rate of subsidiaries outside the PRC		2.4		(43.4)
Effect of tax holiday for subsidiaries		(10.7)		(189.5)
U.S. tax credits		(0.5)		(71.8)
Change in valuation allowance		1.5		265.8
Effective tax rate		16.8		26.7

*The Company generates substantially all of its income (loss) from its PRC operations for the years ended December 31, 2023, 2024 and 2025.

Schedule of aggregate amount and per share effect of reduction of CIT for certain PRC subsidiaries


		For the year ended December 31,
		2023		2024		2025
		RMB		RMB		RMB
The aggregate amount of effect*		797,930		492,489		321,027
Per share effect—basic		3.84		2.36		1.54
Per share effect—diluted		3.53		2.35		1.54

* Decrease of the aggregated amount of effect in 2025 was mainly attributable to the lower profit generated by the Group’s PRC subsidiaries with preferential tax rates.

Schedule of deferred tax assets/liability

Significant components of assets/liability (RMB in thousands)


		As of December 31,
		2024		2025
		RMB		RMB
Net operating losses		1,079,204		3,389,532
Accrued warranty costs		540,349		389,597
Provision for inventories, accounts receivable, other receivable		479,786		418,916
Timing difference for subsidiary income		1,045,870		933,042
Timing difference for countervailing duties		18,534		23,226
Impairment for property, plant and equipment		153,889		392,179
US tax credits		134,942		159,458
Other temporary differences		435,293		501,021
Total deferred tax assets		3,887,867		6,206,971
Less: Valuation allowance		(1,047,994)		(1,328,577)
Less: Deferred tax liabilities in the same tax jurisdiction		(198,476)		(302,092)
Deferred tax assets		2,641,397		4,576,302

Timing difference for property, plant and equipment		(191,196)		(208,825)
Other temporary differences		(63,998)		(123,241)
Total deferred tax liabilities		(255,194)		(332,066)
Less: Deferred tax assets in the same tax jurisdiction		198,476		302,092
Deferred tax liabilities		(56,718)		(29,974)