On May 1, NIO announced its sales for April. The domestic leading new force only delivered 6,658 new cars in April, a decrease of nearly 40% compared to March. In contrast, 25,681 new cars were sold at the same average price above 330,000, and 8,101 new cars were sold at JK. That is to say, NIO is not only no longer the top seller of new forces, but even failed miserably in the battle at the same price.
In early April, Li Bin said in an interview that if this year’s work is not good, 24 years will become another 19 years, that is, NIO may have to "return" to the ICU again. Judging from the current situation, this time may be further advanced.
What was the problem with NIO? Why did the new power, which was still in full swing in the past two years, suddenly fall into crisis? Let Kung Fu Car take everyone to take a look.
(1) The more models are sold, the fewer cars are sold
NIO has never been a brand that takes volume. As early as 2014, when the NIO brand was established, the slogan shouted was to represent domestic high-end electric vehicles to participate in global competition. But if there is no volume at all, the brand will be difficult to survive.
In December 2017, ES8 was launched, ES6 was launched in December 2018, and EC6 was launched in July 2020. NIO has completed the preliminary product layout. The three cars together can contribute about 10,000 units of sales per month, which was very moist at that time.
What’s more impressive is that NIO has "almost" achieved its goal. As an independent brand, its average transaction price exceeds 400,000 yuan, which is comparable to Mercedes-Benz and BMW, and far exceeds Audi. This result is also very scary. You know, this is a brand that has only been born for a few years, and it can be said that the sky is its limit.
But NIO’s subsequent performance was a big surprise. Since 2021, NIO’s new speed has accelerated significantly. ET7, ES7, ET5, EC7 have been listed successively, and old models such as ES6 and ES8 have also been rejuvenated. As a new force, NIO has seven models on sale simultaneously, but the monthly sales are only poor more than 6,000, which is very disappointing. As a comparison, the ideal three cars sell more than 20,000 per month, and the Tengshi (Parameter Shu Picture) sells more than 10,000 a car, and the polar krypton single model sells more than 8,000.
In the case of such a fragile brand, the "car sea tactics" are enough to show that NIO is casual in product definition. I talked to a former NIO engineer before, and he said that NIO’s approach is that the supervisor swings his arm and has no brains to start.
There is no clear definition before the project starts, and then there are more and more problems, and finally it is a work in progress or marginalized product when it is delivered to the market.
This approach will work in the "early days of entrepreneurship" in the future. For example, when ES8 first came out, although many functions were not opened. But because there are not many decent competitors at the same price, it sells well. But at this moment, in today’s highly invaded market, it is undoubtedly a great waste of resources to push new ones at will.
ET7, as a flagship sedan, is a front-drive platform, and ET5, as an entry-level model, is a rear-drive platform. The non-flagship ES7 entered the second-generation platform and lidar early, killing the "aging" ES8 in one fell swoop, but there is no market at all because of pricing issues. Such a slapstick operation is not uncommon here at NIO.
There is a saying that Li Bin and Qin Lihong are both liberal arts students, which makes them often do not make careful inferences and reviews when it comes to market layout, and are more willing to make emotional choices. On the one hand, this has created NIO’s unique humanistic temperament, but on the other hand, it has also caused the current chaos.
(2) The LeTV model is unsustainable. Is power exchange really the future?
Last year, NIO’s financial situation was already very bad. In 2022, NIO’s net loss for the whole year was 14.4371 billion yuan, of which 5.786 billion yuan was lost in the fourth quarter alone.
What is NIO’s response? At the same time as announcing the 2022 annual report, NIO said that 1,000 replacement stations will be built in 2023, and 500kW ultra-fast charging will be deployed "incidentally".
Why does NIO do this? In fact, it is to exchange services for the market. Compared to doing battery research and development, or building a battery production line. The return on investment ratio of power exchange services is immediate, at least the power station is actually increased. Tesla’s 4680 battery has cost a lot of money, and it has not been mass-produced for three years. If such investment is replaced by a power station, at least there is a real physical site. This is considered a major highlight of NIO. After all, for many users, power exchange is indeed very practical.
At the same time, NIO is "immune" to all price wars. No matter how Tesla and BYD are involved, NIO always insists on not reducing prices, which safeguards the interests of regular customers to the greatest extent.
But the crux of the problem is that today’s tram technology is becoming more and more mature, and the battery life is also constantly improving. When the actual battery life of high-end trams exceeds 500km, the added value brought by power replacement has become lower and lower.
At this time, consumers may pay more attention to the benefits. After all, the B-class ET5 sells more than 300,000, and the C-class Feifan F7 only sells 210,000, and the service seems to be less important.
In order to promote power exchange, NIO adopts the typical "LeTV model". The power exchange business is independent and placed outside the listed company, and then the power exchange business is continuously subsidized through the listed money. This seems "seamless", but as the NIO customer base continues to expand, the resources occupied by power exchange are also increasing, which will eventually feed back to the car price, that is, the price of NIO cannot be lowered.
That is to say, regardless of whether the battery is replaced or not, NIO’s users will eventually have to pay for this business. This is not a problem when sales increase, because doubled users can share these costs equally. But when NIO’s sales do not rise but fall, how can new car owners support the existing huge car owner base?
(3) To have faith, we must also look at the product
In the past few years, NIO could be said to be buying cars and giving away "Moments". There were NIO owners around Kung Fu Cars, and they were truly proud of their cars. They were very proud of NIO’s various activities and praised NIO’s various services.
But NIO should also realize that while this segment of consumers is important, they are far from the whole market. Most ordinary users still want high-quality and affordable models.
Not long ago, NIO launched the power station swap wish list function on the NIO App, where consumers participate in recommending the location of the power station. This may seem like a very "democratic" approach, but it may not be a good choice for the market. The location of the power station should be like opening a store, and "professional" choices should be made according to the local flow of people and the layout of the supplementary facilities, so as to ensure the interests of more car owners, not just the car owners to "vote".
The layout of products and technologies must be based on "professionalism", not emotion. Just like talking to the ideal engineer before about why the ideal doesn’t make cars, he replied that because the ideal customers at this stage are mainly family users, and the space of cars is difficult to meet, so he does not consider highlighting car products for the time being; when talking to the JK technicians about product definition, they said that it is not easy to break the game as a latecomer, and finally chose a relatively niche and the demand is not small.
To put it bluntly, if the market is already very crowded, as a latecomer to enter, there is a high probability that it will be cannon fodder. If there are still some gaps in the market, companies have a chance, provided that the price and positioning are appropriate in all aspects.
In a situation where all opponents are highly nervous, NIO’s careless market play, although it does seem to be a light weight, is inevitably gradually thrown away.
(4) Kung Fu shooting
In 2019, NIO was on the verge of bankruptcy because it could not raise money, and later Hefei City’s investment of 7 billion yuan saved it. I never thought that in this short two or three years, NIO would have to put himself in the "ICU" again, which has to be sighed.
Not long ago, Li Bin came out to reassure investors, saying that NIO was currently urgently saving itself, focusing on the four major fields of chips, mobile phones, sub-brands, and batteries. I don’t know if investors heard it or not. At least in Li Bin’s opinion, NIO’s product and technology layout is fine, so what kind of changes can be expected to be made.
Combined with the dilemma of Weimar, perhaps the entrepreneurial path of the first generation of new forces is about to be turned over.
