After finishing with a total sales of 160000 vehicles in 2023, NIO Chairman and CEO Li Bin recently revealed his first internal letter of 2024. According to a later Auto report, Li Bin has identified three "high priority items" for 2024, the first of which is to ensure long-term investment in core key technologies, leading advantages in technology and products, and timely and high-quality delivery.
The timely and high-quality delivery of products cannot be achieved without advanced manufacturing capabilities. On the 11th, Time Finance visited NIO's second advanced manufacturing base, and the relevant person in charge introduced to Time Finance, "The factory only takes 14 days from receiving orders to the complete vehicle production line."
It is worth mentioning that in December last year, NIO acquired the production equipment and assets of the First Advanced Manufacturing Base (F1 Factory) and the Second Advanced Manufacturing Base (F2 Factory) from Jianghuai Automobile, with a total price of approximately RMB 3.16 billion excluding taxes.
After acquiring independent production qualifications, NIO will break free from the label of "OEM" and achieve independent production and manufacturing. "From a manufacturing perspective, if NIO's cars were entirely self manufactured, manufacturing costs would decrease by 10%," Li Bin said during the 2023 Q3 financial report conference call
The relevant person in charge mentioned above said, "Currently, the rear of the produced cars still needs to be labeled with the 'Jianghuai Automobile' logo. It remains to be confirmed when the cars with the 'NIO' tail logo will be taken off the production line."
It only takes 14 days from receiving the order to offline the entire vehicle
What is a highly intelligent and automated automotive factory like?
Entering the NIO F2 factory, the "Rubik's Cube" vehicle access platform in the painting workshop is like a giant "claw machine" that enables the storage and retrieval of multiple vehicle bodies; The 756 robots in the car body workshop each perform their respective duties and achieve 100% automation of the connection process... This is the answer given by NIO F2 factory.
According to the introduction of Weilai, Weilai F2 Factory is the most intelligent factory in the world. It has five distinctive characteristics: advanced equipment, flexible process, full chain intelligence, efficient industrial chain and low-carbon sustainability. It is a full link digital intelligent factory.
Taking painting as an example, personalized production in traditional painting workshops requires body color spraying based on order sorting, constantly replacing spray guns, which will increase production costs and reduce production efficiency.
The painting workshop of F2 factory has creatively established a "Rubik's Cube" vehicle access platform. By optimizing traditional flat inventory into three-dimensional inventory and setting up 408 parking spaces on 6 floors, more flexible inventory retrieval is achieved without the need for "first in, first out", shortening sorting time, reducing production pauses, and reducing process distance by 20%. High flexibility and modularity enable rapid response to personalized production, while ensuring personalized user choices and improving production efficiency.
The final assembly workshop of this factory has adopted the "enclave" automatic assembly island for the first time globally, integrating the front and rear windshields, glass roof, instrument panel, and tailgate into the same fully automatic assembly island for installation. NIO introduced that debugging vehicles can be quickly pulled in and out, and the debugging of a single automatic station usually takes 2 weeks to complete, while traditional line systems typically take around 6 weeks. So the overall debugging cycle can be shortened by about 2/3 compared to traditional solutions, achieving faster delivery of new vehicle models.
It is reported that NIO F2 factory has adopted multiple leading fully automated intelligent equipment and innovative processes both domestically and internationally, which can achieve high automation. The factory can operate normally in a "black light" state. NIO stated that the F2 factory has broken through the contradiction and limitations of traditional large-scale production and personalized customization, achieving efficient and flexible production, and can meet 3592320 personalized configuration combinations. It only takes 14 days from receiving orders to the entire vehicle being produced.
At present, NIO F1 and F2 factories produce all existing NIO models. According to NIO's annual report, each of NIO's two factories has an annual production capacity of up to 300000 vehicles (calculated based on 5000 working hours per year). This means that NIO has an annual production capacity of up to 600000 vehicles. In 2023, NIO delivered approximately 160000 new vehicles, a year-on-year increase of 30.7%.
Manufacturing costs will decrease
It is worth mentioning that in 2016, NIO reached a cooperation agreement with Jianghuai Automobile. NIO's models were manufactured by Jianghuai Automobile on a contract basis, and the rear of the vehicle needed to be labeled with the "Jianghuai Automobile" logo.
When asked about OEM issues in an interview with Li Bin in 2018, he said, "We still focus on research and development and user service, while in manufacturing, we focus on supply chain management, quality control, and process innovation. In other aspects, we cooperate with existing manufacturing enterprises."
Until December 5th last year, NIO announced that it would acquire production equipment and assets from the F1 and F2 factories in Jianghuai, with a total price of approximately RMB 3.16 billion excluding taxes.
Regarding this acquisition, Li Bin stated during the 2023 Q3 financial report conference call, "From a manufacturing perspective, if NIO's cars were entirely self manufactured, manufacturing costs would decrease by 10%."
According to NIO's 2022 annual report, for the years ended December 31, 2020, 2021, and 2022, NIO paid monthly production costs to JAC Motor for each vehicle. According to the annual report, as of December 31, 2020, 2021, and 2022, the total amount of expenses paid to Jianghuai Automobile was RMB 532 million, RMB 715 million, and RMB 1.127 billion, respectively, all of which have been recorded as sales costs.
In fact, as admission tickets, the difficulty in obtaining car manufacturing qualifications has troubled most new forces. On the one hand, NIO has previously sought a contract manufacturing model to achieve mass production; On the other hand, Ideal Automobile, Weima Automobile and others have spent hundreds of millions of yuan to acquire qualifications.
Some argue that if NIO obtains independent production qualifications, while transitioning from a contract manufacturing model to independent production, NIO's R&D, production, sales and other industrial chains will also form a closed loop. On the 11th, the person in charge of NIO F2 factory told Time Finance: "Currently, the rear of cars produced still need to be labeled with the 'Jianghuai Automobile' logo. The time when cars with the tail label 'NIO' will be taken off the production line is still to be confirmed."
However, the cooperation between NIO and JAC Motors has not ended. On the 11th, Jianghuai Automobile Group signed a strategic cooperation framework agreement with NIO battery swapping in Hefei. According to the agreement, both parties will cooperate in multiple fields, including the establishment of battery exchange standards, battery exchange technology, the construction and sharing of battery exchange service networks, and the establishment of efficient battery asset management mechanisms. The new energy vehicle models planned by Jianghuai Automobile Group will cooperate deeply with NIO to launch "rechargeable, exchangeable, and upgradeable" models, comprehensively improving the user's charging experience.
On the same day, Anhui Energy Group Co., Ltd., Anhui Transportation Holding Group Co., Ltd., and NIO signed a strategic cooperation agreement to invest in the construction of thousands of heat exchange stations. In addition, Chery Automobile and NIO reached a strategic cooperation on battery swapping on the 11th.
Entering the new year, NIO has taken frequent actions. For NIO, the main brand will not release new models this year, and the automotive industry is undergoing profound changes, with competition entering an increasingly fierce stage. Li Bin believes that the automotive industry will enter the finals in 2025, but the finals are far from over. How can NIO continue to move forward?