"The market qualification competition has entered its later stage, and the competition in the next year and the following year will be very fierce. I emphasized within the company that we must give up our illusions about next year's market competition and also give up our illusions about the 'price for quantity' strategy. On December 14th, Li Bin, founder, chairman, and CEO of NIO, appeared very cautious when discussing market forecasts for next year at a corporate communication meeting.".
Perhaps it is precisely based on this prediction that NIO has recently undergone many internal adjustments. NIO has been promoting organizational optimization, cost reduction, and efficiency improvement in recent months, from personnel optimization to postponing the self-made battery project. Li Bin explained that the reason for postponing the self-made battery project was because when evaluating the project, the company found that there was no possibility of improving the gross profit margin within three years, so it decided to choose another method to manufacture the battery.
However, at the same time, NIO is aggressively expanding its battery swapping business and is also preparing to launch a second brand. Regarding this, Li Bin emphasized that these measures are not due to financial pressure, but rather "at the time node".
Looking back on the entire communication meeting, Li Bin spent two hours responding to 140 questions previously collected by the company to media outlets including the Daily Economic News reporter. These questions cover NIO's judgment on the market, subsequent product planning, battery swapping business, and strategic layout, among others. Words such as "fierce competition", "increasing gross profit margin", and "building a moat" have all become the keywords in Li Bin's mouth.
The second brand only plans 3 models
"2024-2025 will be a year of concentrated outbreaks of high-end pure electric products. For overall sales expectations, we expect NIO to remain stable above the baseline of monthly sales of 20000 vehicles after the first quarter of next year." Li Bin said that in order to cope with competition, NIO has clearly defined its brand and product layout for the future.
Specifically, next year NIO's main brand will not release new cars, and the core is to sell the existing 8 models well. In the long run, the selling price of NIO brand will continue to increase, and the market below 300000 yuan will be handed over to NIO's second brand in the future.
The launch of the second brand is considered a major focus of NIO's work next year. According to Li Bin, the second brand is not actually called "Alps", but a very down-to-earth name, which will also help NIO enter the 200000 yuan market.
From a positioning perspective, NIO's second brand will focus on the home market, and the brand's entire lifecycle is expected to only have three models. However, the monthly sales of a single model of NIO's second brand are expected to exceed 50000 units internally. At present, the first model of the second brand has recently completed the trial production and production of VB vehicles (development verification trial production samples). However, Li Bin stated that NIO is not in a hurry to push it to the market. "The market competition of 200000 to 300000 yuan will become increasingly fierce. When everyone is' exhausted ', (NIO) will promote (the second brand)," said Li Bin.
In addition, Li Bin also stated that NIO's MPV project has been approved, but the launch speed of the model is not as fast. "Indeed, if we push the MPV model earlier, the market performance may be better, but it's already too late now, so we shouldn't be in a hurry. We need to 'take action later'," said Li Bin.
The battery swapping business is not a burden
"Battery swapping is not a burden for NIO, but a moat." In Li Bin's view, battery swapping business is to NIO what cloud services are to Amazon, because both have strong network effects, require a long construction cycle, and also need to be used internally first.
Not long ago, NIO announced cooperation with Changan Automobile and Geely Automobile in battery swapping business. According to the agreement, these two host manufacturers will launch battery swapping versions of the models and use NIO's battery swapping network. NIO will also make differences in battery swapping networks and develop another set of battery swapping networks to achieve "public use".
According to Li Bin, after Changan Automobile and Geely Automobile, NIO has more partners to join in the battery swapping business, and has now signed a new partner.
"But NIO's opening up of cooperation in the field of battery swapping this year is not due to financial pressure. Battery swapping services are not a profitable business. If NIO can generate 60 orders per day at each battery swapping station, it can achieve profitability," said Li Bin.
According to NIO's internal calculation data, the annual operating cost of a NIO battery swapping station is around 300000 to 400000 yuan. If we only look at the Shanghai region, NIO's battery swapping business is currently profitable.
In fact, besides NIO, more and more car companies are considering expanding their infrastructure layout in the field of charging and swapping through cooperation. After Mercedes Benz and BMW announced the establishment of a joint venture to operate a supercharging network in the Chinese market, Volkswagen (China) Investment Co., Ltd.'s joint venture, Kaimais New Energy Technology Co., Ltd. (hereinafter referred to as Kaimais), recently announced that it has signed a cooperation agreement with State Grid Corporation of China on the Beijing Tianjin Hebei V1G orderly charging pilot project, exploring sustainable and more flexible charging solutions and reducing user charging costs.
It is understood that Kaimaisi and State Grid Vehicle Network Company have officially participated in the regulation of North China Power Grid in November of the Beijing Tianjin Hebei V1G orderly charging pilot cooperation project. The first round of orderly charging operation management under the market opening cycle is planned to be completed in April 2024. This round of plans is to recruit 2400 electric vehicle users in the Beijing Tianjin Hebei region, and over 2000 users have been recruited so far. Next, Kaimaisi will deepen cooperation with State Grid Car Network Company, gradually expand orderly charging cooperation in other cities across the country, and actively cooperate with shareholders to explore more business models for car network interaction.
Chen Si, Chief Technology Officer of Kaimeisi, believes that vehicle network interaction will trigger a dramatic change in the competitive landscape of various systems in the new energy vehicle industry. For example, cost system competition will shift from manufacturing cost reduction to energy service cost reduction; The competition in the technological system will shift from automotive technology to automotive energy technology; The competition in the standard system will evolve from pure charging to interactive system standards; The competition in the service system will expand from maintenance insurance to energy services.
"In fact, with the gradual increase in the number of new energy vehicles in the field of charging, 'a network of car companies' will be the future development trend, which can avoid excessive investment and operational waste in the field of charging and swapping." A senior executive of a charging company who did not want to be named told a reporter from Daily Economic News.
Regarding this, Li Bin also revealed to reporters that NIO's ultimate goal in battery swapping is to open up to the outside world. "We call on more car companies to join the battery swapping business. As more and more peers join the battery swapping network and their cars sell more and more, our moat will also become deeper." Li Bin believes.