NIO Chairman and CEO Li Bin released the first internal letter in 2024. Li Bin concluded that 2023 will be a “challenging and unforgettable year” for Nio. At the same time, it said that “Nio’s overall performance has not reached the expected goals. There are many lessons that need to be summarized and reflected on, and there are too many organizational capabilities that need to be improved as soon as possible.” It should be noted that in terms of its main business of selling cars, NIO The results are not optimistic. In 2023, Nio delivered a total of 160,000 vehicles, only completing about 65% of its sales target.
Looking back on 2023, NIO’s entire range of products has completed the intergenerational switch. Throughout 2023, it has successively delivered new models EC7, new ES6, ET5T, new ES8 (parameters | inquiry) and new EC6, becoming the world’s first complete technology platform vertical Switched smart electric vehicle brands; the three major smart systems of Aspen, Alder and Banyan continue to iterate, releasing a total of 26 versions, bringing 439 new experiences and optimizations; global navigation assistance NOP+ starts pioneering navigation, with a total of nearly 320,000 urban miles opened kilometers, distributed in 208 cities.
At the NIO IN 2023 NIO Innovation and Technology Day, NIO released 12 full-stack technology layouts for smart electric vehicles, and officially released SkyOS Tianshu, the car company’s first full-vehicle operating system, and NIO’s first self-developed chip product ——Lidar main control chip “Yang Jian” and NIO Link NIO Panoramic Internet announced the mass-produced cross-domain integrated supercomputing cluster ADAM CCC, and NIO’s first flagship mobile phone NIO Phone was launched. On the 2023 NIO Day, NIO officially released four core technologies: Shenji NX9031, a self-developed intelligent driving chip, self-developed global 900V high-voltage architecture, SkyRide Tianxing intelligent chassis system, and flagship safety standards; NIO intelligent electric The executive flagship ET9 was officially unveiled. ET9 is the culmination of NIO’s full-stack technology layout and world-leading technology. It contains 17 world-first technologies, 52 leading technologies at the same level, and has applied for 525 patents.
1,035 new power swap stations have been built around the world, with a total of 2,350 built, including 747 highway power swap stations. China has completed the “7 vertical, 6 horizontal and 11 large city clusters” high-speed power swap network layout; a total of more than 35 million power swaps have been provided to users. Services; a total of 3,608 charging stations and 21,091 charging piles have been laid out; a total of 1,460,000+ third-party charging piles have been connected; a total of 71 Power Journeys routes have been opened. 47 NIO centers, 123 NIO spaces, 84 service centers and 22 delivery centers have been newly built around the world; a total of 145 NIO centers, 335 NIO spaces, 310 service centers and 62 delivery centers have been built. It is worth mentioning that in 2023, Nio, Changan Automobile and Geely Holdings announced a cooperation in battery swapping, which will include battery swapping standards, battery swapping technology, battery swapping service network construction and operation, and battery swapping model research and development, etc. carry out comprehensive cooperation. In terms of global market expansion, the NIO brand continues to promote a complete operating system consisting of products and services in Norway, Germany, the Netherlands, Denmark and Sweden, and has launched EL7 (ES7 in the Chinese market), ET5, and ET5 Touring (ET5T in the Chinese market). ) and EL6 (the new ES6 for the Chinese market) delivery.
But in terms of its main business of selling cars, NIO’s results are not optimistic. In 2023, Nio delivered a total of 160,000 vehicles, only completing about 65% of its sales target. If we say that in the market for pure electric vehicles over 300,000 RMB, NIO’s market share exceeds 40%, ranking first; but if the dimension is expanded to include hybrid models over 300,000 RMB, the sales volume of the NIO brand is not as good as the Li brand. half (Li Auto will deliver 376,000 vehicles in 2023).
Of course, Li Bin said: “The next two years will be the most important stage of change in the automobile industry, and the intensity of competition will be beyond imagination. Nio will face more powerful competitors, more and more excellent products, and more competition.” In the face of fierce price wars, facing a more complex public opinion atmosphere, and facing a macro environment full of uncertainty, every colleague must be mentally prepared to give up illusions and face challenges head-on.” Li Bin said in an internal letter.
It is worth noting that in 2024, Li Bin hopes that Nio will be more focused and “first things first.” He clarified Nio’s three “high priorities” in 2024: 1. Ensure long-term investment in core and key technologies, ensure the leading edge of technology and products, and deliver on time and quality; 2. Ensure that sales and service capabilities can cope with the fierce competition. In the face of market competition, sales energy can be converted into sales as soon as possible; 3. Ensure that the research and development of 9 core products of 3 brands are carried out as scheduled. In November 2023, Nio also mentioned “three guarantees” in an internal letter. Compared with before, Nio added two new points in its statement: one is to “ensure the on-time and quality delivery of technology and products”, and the other is “sales energy can be converted into sales as soon as possible”.
In terms of sales and services, NIO is currently the car company with the highest investment in China. NIO’s sales stores are all directly operated, and are divided into two types: NIO House, which integrates car sales, gatherings, and leisure functions, and NIO Space, which focuses on sales functions. Li Auto has 467 stores by the end of 2023, and Xpeng has 395 stores by the end of the third quarter of 2023. However, the overall rent, area and store decoration costs of Li Auto and Xpeng stores are lower, and their functions are limited to selling cars.
Nio currently plans a total of three brands. Among them, the main price range of Nio brand is between 300,000 and 600,000 RMB, and currently has 8 products launched; the second brand (internally codenamed “Alpine”) is priced between 200,000 and 300,000 RMB. In the household market of RMB 200,000, the first car is an SUV and is expected to be launched in the second half of this year; the third brand (codenamed “Firefly”) is responsible for the market below RMB 200,000. NIO President Qin Lihong revealed in an interview with the media that the third brand will provide personalized models similar to the MINI brand and plans to complete its debut in the European market in 2025.
Throughout 2024, the NIO brand will not launch or deliver any new products. The existing 8 models, including NIO ES6, NIO ET5, and NIO ES8, will be the brand’s sales growth points. Of course, the first model under the “Alpine” brand mentioned above is expected to be delivered in the second half of the year, which is also the third “guarantee” mentioned by Li Bin. Li Bin said in an internal letter that NIO’s system capabilities are “still far from our goals.” He believes that there will be few tasks to launch new cars in 2024, “which is the window for NIO to improve its system capabilities.” At the same time, “the smart electric vehicle industry is large and has a long industrial chain. A one percent gap in system capabilities means a ten percent gap in sales and profitability.” Li Bin said.
Li Bin believes that in the past few years, NIO’s business boundaries have expanded rapidly and system capabilities have not been improved. Many projects have resulted in a waste of resources due to “lack of in-depth business understanding” and “lack of meticulous management.” In the past few years, NIO has continued to expand its business boundaries. In addition to its main brand, it has added two sub-brands, codenamed Alps and Firefly. It also develops its own chips, batteries and mobile phones. NIO is also exploring overseas markets and ensuring battery replacement. and continuous investment in service systems. These investments have not yet been converted into sales, causing NIO’s financial burden to become increasingly heavy.
In this internal letter, Li Bin reviewed and stated that the construction of system capabilities requires each department to clarify the essential logic and key success factors of the business, set clear goals, use resources where possible, and formulate specific implementation plans. Plan, respond quickly to market changes, adjust organization, investment and business focus, learn from the best practices of peers, review delivery results in a timely manner and continuously improve.
It is worth mentioning that Nio’s 2024 internal letter also mentioned “cost reduction and efficiency improvement”, which mainly include four points, as follows:
- Please remind each other that Nio is not short of theoretical concepts. In daily work, we must put an end to general empty talk, implement the clear direction, focus on action, build strongholds, fight dull battles, win every day, and work hard for a long time. achievement;
- The company’s resources are limited. Nio is still suffering losses caused by investment in R&D and infrastructure. It needs to continuously improve its financial performance to support the company’s sustainable development. Nio has the responsibility and obligation to put the interests of investors and shareholders first. Use every penny well;
- Every link and expenditure in R&D, supply chain, quality, manufacturing, sales and service, management and support must have the awareness to calculate and improve the return on investment, and must have the ability to continuously optimize and save costs and expenses;
- In 2024, Nio must resolutely avoid ineffective and inefficient investments, resolutely save every penny that does not create value for users and the company, save every kilowatt hour of unnecessary electricity, and save every unnecessary Printing of documents, not wasting every click and inquiry, not wasting every opportunity for product and service improvement brought by user feedback.
