First Musk in China, now William Li in Germany.
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Category: William Li
NIO has been discussing this adjustment internally for a long time, and as of 3 am today the NIO team was still working on it, William Li said.
(Image credit: CnEVPost)
NIO (NYSE: NIO) today announced the largest price and benifit adjustment in its history in an attempt to boost sales. The company's helmsman responded to the move.
NIO has been discussing the adjustment internally for a long time, with input and suggestions from some of its customers, William Li, the electric vehicle company's founder, chairman and CEO, said in a reply to an article in the NIO App.
The company had so much to consider for this that the NIO team was still working on it as of 3 am today, he said.
Now is the most appropriate time to announce the change, although the company still has some things to think about and can't make everyone happy, Li said.
NIO lowered the starting prices for all models by RMB 30,000 yuan ($4,200) starting today and made the battery swap service, which was previously offered four or six times a month for free, a paid option.
Under the latest pricing system, NIO's cheapest model, the ET5 sedan, starts at RMB 298,000, and if consumers choose to lease the battery with the BaaS (battery as a service) option, the vehicle starts at RMB 228,000.
The new ES6, which only went on sale and began deliveries late last month, starts at RMB 338,000 under the new pricing system and RMB 268,000 under the BaaS model.
In fact, many NIO supporters in China have been calling for the adjustment on social media for a long time.
NIO initially offered owners unlimited free battery swap service and free home charging piles, and scaled back the entitlement to six free services per month and a free home charging pile a few years later.
On April 10, the company announced that effective June 1, consumers who purchase the NIO ET7, EC7, ES7, and ET5 will no longer receive a free home charger, and the free battery swap entitlement will be adjusted to four times per month.
Since the free battery swap service is directly tied to the sale of NIO vehicles, it discourages potential consumers in areas where the number of battery swap stations is small from taking an interest in NIO vehicles, as they may believe that the cost of their vehicle purchase includes the battery swap service that they will not be able to enjoy in the short term.
At the same time, the high price of NIO vehicles means that its owner base is more likely to have a fixed parking space than other brands, and for these people, charging at home is cheap, making the free battery swap service redundant.
In a June 9 analyst call following NIO's first-quarter earnings announcement, Li said the company was considering adjusting customer benefits, such as free battery swap service that some owners may not need, hinting at today's move.
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BREAKING: NIO cuts starting prices by $4,200 for all models and makes battery swap benefits optional
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"We need to think strategically with a long-term mindset and use that to guide our short-term actions," Li said.
(Image credit: NIO Capital)
NIO Capital recently held its annual investor conference in Hefei, Anhui province, where its managing partner William Li spoke and highlighted the choices NIO (NYSE: NIO), of which he is a founder, is making in times of uncertainty.
Li is not only at the helm of NIO Capital, a venture capital firm with a US dollar fund as well as a RMB fund, but is also the founder, chairman and CEO of NIO.
The conference was the first time in three years that NIO Capital brought together investors from its RMB and US dollar funds, and in addition to presentations and roundtable conversations, attendees toured NIO's manufacturing facilities, according to a press release today.
Li gave a keynote speech at the conference, sharing his views on the development of NEVs (NEVs) and corporate strategy, according to the release, which included a photo showing Li highlighting NIO's choice in times of uncertainty.
Last year was a landmark year for the global NEV industry, as global sales of NEVs exceeded 10 million for the first time, with China contributing close to 70 percent of the sales, according to Li.
Even during the Covid epidemic, China's NEV sales performance was still surprising, showing that the NEV industry has fully transitioned from being policy-driven to being product-driven and market-driven, which is a historic watershed, Li said.
Nonetheless, the future remains challenging, and increased uncertainty is a trend that almost everyone agrees on, he said.
"In today's world, we must learn to think about how to grow, how to manage risk, and how to take advantage of opportunities in a more volatile and uncertain world," Li said.
"We need to think strategically with a long-term mindset and use that to guide our short-term actions. We need to be more aggressive in meeting the challenges of the market while ensuring that the company's operational risks are manageable," he added.
Ian Zhu, another managing partner at NIO Capital, also spoke and said the venture capital firm has made aggressive investments in the areas of smart cockpits, battery technology, energy transition, semiconductors and automotive ecology since 2022.
NIO Capital didn't provide much more on NIO, though many of its investments are around the NEV industry chain and are sometimes made alongside NIO.
NIO and NIO Capital invested in fusion startup Neo Fusion, taking a 19.9 percent and 10.1 percent stake, respectively, according to a CnEVPost report last week.
NIO also seems to be hoping that NIO Capital's investment will help it get better access to resources for building more attractive electric vehicles.
NIO announced the panoramic digital cockpit PanoCinema when it launched the ET5 sedan on December 18, 2021.
It announced at that time the introduction of AR glasses developed jointly with Nreal, an AR technology company that is a portfolio company of NIO Capital.
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NIO maintains its previously mentioned goal of doubling sales, despite greater challenges to meet the goal, said William Li.
(William Li (left), founder, chairman and CEO of NIO, and Qin Lihong, co-founder and president of the company, participate in a media group interview. Photo taken by CnEVPost.)
NIO (NYSE: NIO) is confident it will see sales double this year, despite a rare price war that disrupted the Chinese auto industry in the first quarter.
NIO maintains its previously mentioned goal of doubling sales, though the challenge to meet that goal is greater, William Li, the electric vehicle (EV) maker's founder, chairman and CEO, said in an interview in response to questions from CnEVPost.
The price war has had a big impact on the auto industry, and NIO will not follow suit. Instead, it adjusted the benefits offered to consumers, which can be seen as a price increase, Li mentioned in the group interview on April 17 on the eve of the Shanghai auto show.
What NIO really cares about is creating value for users, not simply lowering prices, Li said, adding that companies that start price wars usually don't get the results they want because it leads to damage to the interests of existing vehicle owners and won't win the future.
In the short term, NIO will face some pressure as a result, he said.
NIO delivered a total of 122,486 vehicles in 2022, up 34 percent from 91,429 in 2021. The doubling of sales means that NIO is expected to deliver about 240,000 vehicles this year.
Li said in a March 1 analyst call following NIO's fourth-quarter earnings announcement that the company is aiming to see sales double this year compared to last year.
"Our team is very confident in that," Li said at the time.
In a March 22 interview with Bloomberg TV, NIO CFO Steven Feng said the company is very confident it will meet its sales target in 2023.
NIO delivered 31,041 vehicles in the first quarter, which means it needs to deliver more than 23,000 vehicles each month on average for the rest of the year to meet its full-year goal.
At the time Li mentioned the target on March 1, only a handful of NEV makers had cut prices in China.
However, some internal combustion engine automakers then began offering steep discounts, and a wave of price cuts quickly swept through the industry.
Rather than boosting vehicle sales significantly, the rare price war has led to increased consumer's wait-and-see sentiment.
On March 22, the China Association of Automobile Manufacturers (CAAM) called for the hype about this round of price cuts in China's auto industry to cool down as soon as possible, so that the industry can return to normal operation and ensure healthy and stable development throughout the year.
In March, retail sales of new energy passenger vehicles in China were 543,000 units, up a modest 21.9 percent year-on-year and 23.6 percent from February, according to data released by the China Passenger Car Association (CPCA) on April 10.
This is lower than the CPCA's preliminary figure of 549,000 units released on April 6, and lower than the 560,000 units it had forecast in its March 25 report.
The price cuts by some NEV companies may have triggered a wait-and-see mood among consumers, the CPCA said at the time.
For the overall passenger car market, retail sales in March were 1.587 million units, up 0.3 percent from a year earlier and up 14.3 percent from February. In the January-March period, retail sales in China's auto industry were 4.261 million units, down 13.4 percent from a year earlier.
Li also said in the interview that the decline in Chinese auto sales in the first quarter reflected a strong consumer wait-and-see sentiment.
He also mentioned that the company maintained its target of achieving profitability for its core NIO brand in the fourth quarter of this year, excluding investment in innovative businesses.
Lithium prices are falling faster than expected, and NIO's costs will fall as future deliveries rise, Li said.
As of April 17, the average price of battery-grade lithium carbonate had fallen to RMB 187,500 per ton in China, and the average price of industrial-grade lithium carbonate fell to RMB 140,000 per ton, according to data from Mysteel.
NIO ET5 ranks 7th in top-selling premium sedan list in China with 6,437 Mar sales
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NIO has nearly completed 20 million battery swap services, with an average of one NIO vehicle leaving a battery swap station with a fully charged battery every 1.9 seconds, said Li. NIO US | NIO HK | NIO SG
The China EV 100 Forum, held in Beijing from March 31 to April 2, brought together some of the biggest names in China's automotive industry.
William Li, founder, chairman and CEO of NIO (NYSE: NIO), spoke at the event on April 1.
Below is the full text of Li's speech, translated and edited by CnEVPost.
Dear chairman Wan, president Qingtai, minister Miao, and distinguished guests, I am very glad to have the opportunity to share some of NIO's latest ideas.
Last year we delivered 122,486 units of high-end smart electric vehicles, which is not a lot compared to our peers, especially compared to BYD.
However, the average price of the vehicles we delivered last year reached RMB 437,000. It can be said that each NIO has witnessed the upward upgrade of China's auto brands.
In the fourth quarter of last year, we had a 54.8 percent market share in the premium EV segment above RMB 300,000 and a 75 percent market share in the premium EV segment above RMB 400,000, and we're doing pretty well in terms of share.
It's true that everyone is facing a lot of difficult choices today, and the uncertainty in the industry is very high.
In our transition from fuel to electric vehicles, what should be the pace of development of the industry? I think we all have a lot of confusion, including myself. These are some of the very difficult choices we are facing.
NIO is a start-up company, and we are not in a position to stop and think too much.
We are determined to invest for the final win while ensuring the risk of our operation is manageable and improving efficiency, which is one of the things we have thought through.
We are investing in three main areas.
First, we are continuing to invest in core technology research and development.
Last year, NIO did lose some money, but I still want to tell you that it was mainly in R&D. However, the money lost on R&D, I think it is an investment.
NIO has been making R&D layouts globally since its creation in 2015. Even in 2019 when the company was about to close, we did not close the office in Europe, we did not close the office in Silicon Valley.
We have now established more than 10 R&D centers in the US, Europe and China.
Our R&D investment in the fourth quarter of last year was close to RMB 4 billion, and our annual R&D investment for the year reached RMB 10.8 billion.
Last year, our annual revenue was nearly RMB 50 billion, so I should say that the proportion of R&D investment is very high.
We will further increase our R&D investment this year, and are now making a comprehensive investment in the full-stack capability of intelligent electric vehicles, including chips, underlying operating systems, materials, and battery cells.
From day one, NIO has never taken anything from anyone else for reverse R&D. We started from a single line to build our cars, electric technology, intelligent technology, and all-aluminum body.
We did all of these ourselves, and this has been our tradition since 2015.
We now have over 10,000 R&D staff and we will still hire close to 2,000 recent college graduates this year and will train them for the long term.
NIO has been granted more than 6,000 patents covering the entire full stack of smart electric vehicle technologies.
We are very pleased to see that we have won the first prizes in the Chinese automotive industry for two consecutive years in 2021 and 2022, and these are the recognition of us.
Not only in China, but also in Europe, our ET7 won the most weighty model award in basically every country we entered last year.
For example, last year we won the most influential "Golden Steering Wheel" in Germany. This is the highest award for mid to large-size cars and the first time that a Chinese brand has won such an award in Germany. We can say that these have witnessed the upward journey of our brand.
Second, one of the directions we have resolutely invested in is the continuous construction of charging and battery swap infrastructure.
Charging and battery swap infrastructure is one of the most important factors determining the user experience of electric vehicles.
When we started research and development in 2015, we set down the service system of chargeable, swappable and upgradable.
In terms of charging piles, we have gone to a lot of trouble in helping users to install more than 180,000 charging piles.
We also installed more than 14,000 public charging piles, and this is open, more than 80 percent of the power is used by non-NIO owners. This includes Tesla, BYD, and many of our peer brand vehicles.
We have access to over a million third-party charging piles globally, and in both China and Europe, we have partnered with the most important local charging pile operators.
We just installed 500 kW ultra-fast charging piles two days ago, which has a bi-directional charging module that we developed ourselves.
This supercharger can in fact reach 650 kW power, and together with our battery swap stations, it can increase the efficiency to a very high level. We are now mainly building integrated stations with both battery swap service and charging piles.
We have deployed 52 destination charging routes in China, such as the route from Sichuan to Tibet and the route to Everest Base Camp.
We will deploy destination charging routes to our customers whenever they want to go, and we will add more than 20 routes this year.
We have already built 1,326 battery swap stations in China, in this picture is the one in Lhasa.
We have also deployed 13 battery swap stations in Europe, and they have been well received in five European countries.
Two days ago we just commissioned our third generation battery swap stations in Hainan, and battery swap has become the most popular way to replenish energy for NIO users.
On February 14, 2022, for the first time, the power provided by our battery swap stations exceeded that provided by charging facilities, and now the ratio has reached 60 percent.
In addition to charging at home, owners are essentially using battery swap stations, and that percentage is much higher than we had anticipated.
We are close to completing 20 million battery swaps, which should be seen in the next two days. On average, every 1.9 seconds an NIO vehicle departs from a battery swap station with a fully charged battery.
Battery swap has many advantages, I won't go into details here.
We have already built a network of battery swap stations covering five vertical highways, three horizontal highways, and eight city clusters.
By 2025, we will have a network of battery swap stations covering 9 vertical highways, 9 horizontal highways, and 19 city clusters, and by then NIO car owners will be able to travel on highways without worry.
Our goal for this year is to add 1,000 battery swap stations, and by the end of this year, we will have 2,300 stations.
We will also add 10,000 new battery swap stations, and in fact, we are the most aggressive car brand in China in deploying battery swap stations.
People always think of battery swap when they think of NIO, but we're actually doing a great job with charging facilities as well.
That's the second point, we will be determined to build the infrastructure.
Third, we will enter the global market with the determination to serve more customers.
On September 30, 2021, we started to deliver in Norway. Many of our Chinese counterparts deliver vehicles in Norway, and we have reached the first and second places in some segments.
On October 7 last year, we officially announced our entry into Europe in Germany, the Netherlands, Denmark and Sweden.
We had a European launch event in Berlin with more than 1,000 guests, which was well received by everyone.
On October 16 last year, we officially started to deliver vehicles in four European countries.
In fact, just two days ago, we just opened our NIO House in Frankfurt, after having opened our NIO House in Berlin and NIO House in Rotterdam.
Overall, this is indeed a particularly challenging time, and NIO has chosen to do the right thing in the long run by making a long-term investment. We believe that this kind of investment will eventually reap good results.
This is also a photo of one of our horizons in the Netherlands, taken by a Dutch photographer, heralding a field of hope.
I believe that the development of smart electric vehicles is a difficult journey, and the road ahead is long and full of obstacles. But if we move forward, we will reach our goal. The future is promising.
I hope we can have a bright future together, thank you.
NIO's battery swap network open to other brands, just like cloud service, says William Li
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NIO's battery swap stations are well adapted and the time has come to offer output to other brands, according to Li. | NIO US | NIO HK | NIO SG
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The man at the helm of NIO (NYSE: NIO) reiterated that the company's battery swap stations network is open to other brands, and compared the service to a cloud service.
NIO wants other companies to share and build battery swap infrastructure with it, said William Li, the company's founder, chairman and CEO.
Li mentioned this during a media group interview on April 1 during the China EV 100 Forum, saying that there have been discussions between other car companies and NIO on the matter, according to a report today by local media outlet The Paper.
"I met with several company executives today and they asked me how we could work together, and we're open to that," he said.
With 80 percent of the power provided by NIO's charging stations being used by other brands of electric vehicles, it's feasible for the company to offer battery swap services to other car companies, he said, adding that it's just that other automakers would need to design vehicle chassis based on the specifications of NIO's battery packs.
NIO's battery swap stations have a reasonable degree of adaptability, and the time has come to provide output to the outside, Li said.
He said the company calls its battery swap model "battery as a service (BaaS)", an innovation that can be understood through the lens of cloud services.
Cloud services around the world, whether they are offered by Microsoft, Google and Amazon in the United States or Alibaba, Tencent and Huawei in China, they all have one thing in common: The companies themselves are the primary users.
"You certainly can't achieve this kind of service if you're not the biggest user yourself," he said.
On top of being available for their own use, such systems need to be open, and the hardware interfaces, software interfaces, and operational interfaces all need to be complete, said Li.
NIO's battery swap stations are being offered for two generations of vehicle platforms and have supported six models so far, including models from 2018 to 2023.
"I think it's very well adapted and the internal interfaces are very mature," Li said, adding, "We feel that the time has come for it to provide output to the outside world, and we are very willing to explore that with our peers."
It's a bit like Amazon's cloud service, which requires the company to sort out internally the timeline for offering the service externally, he said.
However, Li also noted that, like the time it takes to migrate when using new cloud services, the matter of NIO's battery swap service being available to other brands requires peers to work together to plan ahead before it can be realized in two or three years.
NIO aims for swap stations to serve partly as showrooms in underdeveloped cities
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Li also said that Tesla's price cut comes after it faced stiff competition in China, where it does not have pricing power.
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NIO's (NYSE: NIO) first phone model will be launched and delivered in the third quarter, William Li, the electric vehicle company's founder, chairman and CEO, said today.
Li mentioned the plan in a media group interview today during a forum on China's electric vehicle industry, according to multiple media reports, without providing further details.
Li confirmed in late March last year that NIO would be getting into phone making, saying the company's NIO customers wanted to see a phone that connected better with NIO cars, which prompted the company to look into the industry.
In an internal presentation at the end of November last year, Li said the decision to make the phone was based on long-term strategic thinking over a 5-10 year horizon.
In addition to mentioning a timeline for the launch of the first NIO phone, Li said in an interview with National Business Daily that Tesla doesn't have pricing power in China.
"Tesla's price cut was an action taken after facing stiff competition in the Chinese market, where it doesn't have pricing power," Li said.
Tesla has pricing power in the US market because it has a 60 to 70 percent share in the new energy vehicle (NEV) market there, Li said, adding that in China's NEV market, Tesla has only a 7 percent share.
With 60,766 retail sales in China in January-February, Tesla ranked second in the Chinese NEV market with a 7.8 percent share, according to data released last month by the China Passenger Car Association (CPCA).
BYD retail sales in January-February were 316,417 units, ranking first in China's NEV market with a 40.8 percent share.
NIO sold 20,663 units in the same period, ranking 8th with a 2.7 percent share.
BYD clearly has pricing power, and interestingly, the man at the helm of the NEV giant also mentioned the topic earlier this week.
BYD has pricing power in the price range of RMB 100,000 ($14,560) to RMB 200,000, but the company wants to keep things steady, its chairman and president Wang Chuanfu said at a March 29 investor conference.
BYD doesn't want to make it hard for others to survive, Wang said.
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The common feature of NIO, Li Auto, XPeng's mobile apps? Pretty girls!
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