During this year's National Day holiday, several new energy vehicle companies, including "Weixiaoli", released delivery data for September. Among them, NIO ranked fourth on the September new car delivery list with a delivery volume of about 21200 vehicles. This is the fifth consecutive month since May this year that the monthly delivery volume has remained at the level of 20000 vehicles. From January to September this year, NIO delivered a total of 149300 new cars, a year-on-year increase of 35.7%. As of October 11th, NIO has delivered 600000 high-end pure electric vehicles worldwide.
In fact, since its establishment in 2014, NIO has grown from a novice car manufacturer to a leading enterprise in China's new car manufacturing force, experiencing numerous controversies and challenges, and facing the "life and death" crisis in 2019. So, what is the core reason why NIO has maintained sustainable development all the way to today? What are the definitions and thoughts on the positioning of its three major brands?
On the occasion of the 20th anniversary of the establishment of the Daily Economic News, reporters conducted an exclusive interview with Qin Lihong, co-founder and president of NIO, with the above questions in mind.
Brands should not be defined by bosses. Third brands should be released at the end of the year
It's a shame to say that we should have stabilized our monthly sales at the level of 20000 vehicles a long time ago, "Qin Lihong said. During this period, the company took some small detours, but also kept learning in the process.
The reporter learned that delivering over 20000 vehicles per month is a goal that NIO Chairman Li Bin has set for the second half of 2023. This year, there are much fewer external interference factors in the market compared to last year. NIO will be more stable in terms of new car delivery quality and pace, and we are confident in achieving the goal of an average monthly sales of over 20000 vehicles in the second half of the year, "Li Bin said during NIO's first quarter financial report conference call in 2023.
Qin Lihong believes that the reasons for NIO's significant sales surge in the past five months are mainly reflected in three aspects: firstly, the completion of the 2024 product switch, which enhances the overall competitiveness of the products; The second is the BaaS (Battery Rental Service) strategy and price adjustment, which promotes users' acceptance of the vehicle electric separation mode. Currently, over 80% of new users choose the BaaS mode; The third is the expansion of the sales network, which enhances sales capabilities.
According to the plan, with the release of new products and updates to existing products, NIO's core business in China aims to achieve a monthly sales scale of 30000 vehicles and a gross profit margin of 20% for the entire vehicle.
Starting from the end of the third quarter, NIO officially entered the era of dual brands. On September 19th, NIO's second brand, Ledao Automobile, officially launched its first model, Ledao L60, with a price range of 149900 to 235900 yuan. It will be delivered nationwide on September 28th. According to official data, a total of 832 units of Ledao L60 were delivered in September.
According to the plan, the delivery of Ledao L60 will reach 10000 units in December this year, and a monthly delivery volume of 20000 units can be achieved by next year.
Qin Lihong revealed to reporters that in addition to Ledao Automobile, NIO's third brand (internal code name "Firefly") will be officially launched at NIO Day in Guangzhou on December 21, 2024. In the first half of 2025, the first model under Firefly will be officially launched and will be exhibited and sold in NIO stores, "said Qin Lihong.
Qin Lihong emphasized that although the "Firefly" model is an entry-level car, it does not mean it is a cheap car. For NIO, its significance can be understood as MINI to BMW and Smart to Mercedes Benz, positioning itself as a mini boutique car.
It is reported that NIO's three brands focus on the high-end market, mainstream market, and entry-level market respectively, with price positioning of over 300000 yuan, over 200000 yuan, and over 100000 yuan. It would be better for NIO to cover three different price ranges with three brands than to cover all price ranges with one brand, "Qin Lihong emphasized. Brands should not be defined by the company's so-called bosses, but by consumers.
Battery swapping is NIO's signature feature
Qin Lihong introduced that for NIO, the commonality of the three brands under the company is to take the three major elements of products, services, and communities as the bottom layer. They will not stop doing good things for users, including battery swapping services, just because Firefly products are slightly cheaper.
In Qin Lihong's view, battery swapping is NIO's "signature" and will cover its three brands. Ledao and NIO can share a battery swapping station, but Firefly models cannot. NIO will set up a separate battery swapping network for them, "Qin Lihong revealed.
As one of the earliest domestic car companies to lay out charging and swapping station infrastructure, NIO began laying out charging and swapping facilities at the beginning of the delivery of its first vehicle in 2018. According to official data, as of October 20th, NIO has built 2580 battery swapping stations, 4054 charging stations, 23785 charging piles, and connected over 1.107 million third-party charging piles nationwide.
To serve the larger user base that will be brought by the entry of its new brand into the market, NIO released the "Electricity Charging County Connection" plan on August 20, aiming to achieve nationwide charging county connections and 14 provincial-level administrative regions' battery swapping county connections by June 30, 2025; In terms of the construction of battery swapping stations, NIO plans to complete the electrification of 27 provincial-level administrative regions by the end of 2025, covering over 2300 county-level administrative regions. Starting from 2026, NIO will focus on other provincial-level administrative regions, covering over 2800 county-level administrative regions. NIO Chairman Li Bin revealed that by the end of 2025, NIO will have built more than 5000 battery swapping stations.
With the rapid development of supercharging technology, the charging speed of vehicles is getting faster and faster, which has also raised doubts about the future of battery swapping from the outside world. Regarding this, Qin Lihong replied, "No matter how fast overcharging is, battery swapping still has advantages. Because the battery swapping station itself is also an overcharging station, it is just shifting the user's time
Qin Lihong believes that the ultimate solution for new energy vehicle infrastructure is battery swapping stations. For users, battery swapping is more of a game of time shifting. It's not about temporarily charging when you need it, but about charging the battery when you're not around, swapping it out in two or three minutes and leaving directly. "Qin Lihong explained that battery swapping is the biggest way to preserve the value of expensive and relatively short lifespan power batteries.
Regarding the choice between the two technological routes of range extension and battery swapping, Qin Lihong stated that for long-term considerations, NIO has chosen the latter. If NIO were to develop extended range vehicles and achieve our current level, the additional cost of components required for each vehicle would be around 30000 yuan. Based on NIO's fleet of 1 million vehicles, NIO would need to invest an additional 30 billion yuan in developing extended range vehicles, which is equivalent to investing in the construction of 10000 battery swapping stations. Qin Lihong believes that the best solution for NIO, users, and the entire power industry is to lay out 10000 battery swapping stations.
Qin Lihong explained that currently, although NIO has only deployed over 2000 battery swapping stations nationwide, it can basically meet the travel needs of many users. With the implementation of NIO's battery swapping program, adding more than 2000 battery swapping stations can achieve county to county connectivity. With less than 5000 battery swapping stations built, it will be possible to have battery swapping stations in every county and district in China. If the number of battery swapping stations reaches 10000, NIO can basically achieve 50% of village to village connectivity, which is more convenient than refueling, "Qin Lihong analyzed.
In Qin Lihong's view, unlike refueling gasoline vehicles, electric vehicle users have a poor charging experience, and car companies including NIO are responsible. Although NIO did not make a profit in the short term, there is no doubt that we will enjoy the dividends of this industry's development in the future. Therefore, we should also invest in the development of the entire industry, so we must replace the battery, "said Qin Lihong.
At present, investing in research and development is like laying the foundation
According to Qin Lihong, in recent years, whenever NIO encounters difficulties and challenges, Li Bin leads the team to conduct some soul searching and return to the essence of the problem. There are two questions we are questioning: first, what are the reasons why some users do not choose NIO? The second question is, what is the most critical factor for users to choose the NIO brand? "Qin Lihong said, and the final conclusion still returns to the lowest level of NIO's entire business model - products, services, and communities.
In Qin Lihong's view, automobiles are an industry where products are king, and behind products must be driven by technology. Especially in the current wave of technology where cars are transitioning from "oil to electricity" and from non intelligence to intelligence, the investment of car companies in technology and how technology can be manifested as perceived value by users are very important. In this regard, we have not played to its best in the past, but NIO has always been a company that invests a lot in research and development, "Qin Lihong emphasized.
Official data shows that since 2016, NIO has invested over 46 billion yuan in research and development, and has built a full stack layout of 12 technologies. Its core technologies cover various sectors of intelligent electric vehicle research and manufacturing. At present, NIO's global R&D team has over 11000 members, with a total of over 9000 valid patents and patent applications. Thanks to the high R&D investment in the early stage, our R&D achievements have been able to quickly make users perceive them in the past one or two years, "said Qin Lihong.
In July of this year, NIO released self-developed core technologies such as intelligent driving chips, SkyOS, intelligent systems, intelligent driving, and panoramic connectivity. We need to use better methods to make users perceive the value of these technological achievements in a timely manner, rather than burying ourselves in 'laying the foundation' and leaving nothing on the ground, so this foundation and the ground are equally important, "Qin Lihong said.
According to Qin Lihong, NIO has been tirelessly investing in research and development since 2022. The R&D investment for each quarter is basically maintained at around 3 billion yuan, and the annual R&D expenses are all over 10 billion yuan.
Faced with doubts from the outside world about NIO's high R&D investment, Qin Lihong explained that the automotive industry is currently in the early stages of significant industry development due to technological revolutionary changes. When there is a revolutionary change in industry technology, it is a reasonable choice for NIO to layout technology early.
Qin Lihong emphasized that NIO's investment in research and development at this stage is laying the foundation. NIO is a company that is passionate about laying the 'foundation' because if we want to build a super high-rise building like the Burj Khalifa or the Chinese Zun, we must spend a lot of money and a long time to lay the 'foundation'. Qin Lihong said that once the 'foundation' is laid, once it is above ground level, each floor will be built quickly.