When li bin lets go of obsession, nio returns to reality

"The LeDao L90 is like our Liaoshen Campaign, officially sounding the horn of counterattack; the all-new ES8 is like our Huaihai Campaign, directly turning the tide of the entire battle; as for the all-electric large three-row SUV, it is like our Jinggangshan base area."

I enjoy watching the TV series "The Great Battle" and have rewatched it at least six or seven times.

At the end of last month's Chengdu Auto Show, after a very incisive opening summary in an exclusive interview with Qin Lihong, the underlying intent became instantly clear.

It must be admitted that after playing the cards of the Leauto L90 and the all-new ES8 consecutively, the protagonist of today's article has indeed climbed back from the edge of a dangerous cliff.

Little did they know, last night marked yet another NIO Day of the year.

Unlike previous events held at the end of the year, this time it was chosen to take place in early autumn in Hangzhou. After participating in the entire event, "when Li Bin let go of his obsession" was a heartfelt sentiment.

In the past, NIO seemed to live on its own somewhat utopian ideal island; now, NIO has clearly stepped boldly into the brutal and bloody reality of the mainland.

For this year's NIO Day, the most important event is undoubtedly the launch of the all-new ES8. As NIO's decisive battle, the pure electric large three-row SUV is a cornerstone, and only by winning decisively can the entire company enter a virtuous cycle.

So, are you satisfied with its performance?

01When the all-new ES8 returns to the brand's anchor point.

On August 22nd Beijing time, when the all-new ES8 was unveiled for the first time, it received waves of praise based solely on its product strength.

In summary, the main point is to listen to advice.

In the past, didn't outsiders always criticize the first and second generation models for not being robust enough in size? With the all-new ES8, the length has been extended to nearly 5.3 meters, the wheelbase exceeds 3.1 meters, and the height reaches 1.8 meters, making it almost the most substantial in its class.

In the past, didn't people often criticize the first and second generation models for lacking things like a "fridge, TV, and big sofa"? With the all-new ES8, not only are they all included, but the experience is also made the best.

In the past, there were always doubts about the short range of the first and second generation models. With the all-new ES8, the 102 kWh long-range battery pack comes as standard.

Once, the exterior world often felt that the interior design of the first and second generation models was too restrained. With the all-new ES8, while fully maintaining its tone, the sense of luxury has become increasingly expressive.

In the past, the outside world often believed that the first and second generation models had weak loading capacity when fully occupied. With the all-new ES8, through the optimization of the electric powertrain integration, a 230L electric front trunk has been introduced, and together with the rear trunk and the sunken space, the available storage space reaches 777L.

In terms of texture and atmosphere creation, the all-new ES8 also showcases NIO's greatest strengths. Coupled with the convenience of NIO Power for energy replenishment and the highly praised service system, this all-electric large three-row SUV does not disappoint.

In contrast, what truly underpins its large sales is still the pricing.

The pre-sale starts at a minimum price of 416,800 yuan, and the BaaS battery separation is reduced to 308,800 yuan, which is already quite explosive.

Last night, it was officially launched, with the two figures reaching 406,800 yuan and 298,800 yuan, respectively.

Without exaggeration, on the premise of ensuring gross profit, the all-new ES8 has truly "flipped the table." This approach is undoubtedly the best evidence of "Li Bin letting go of his obsession."

"The first-generation ES8 was actually the anchor model. At that time, its sales were the highest, and its gross profit situation was the best. The second-generation ES8 deviated from this anchor, with combined costs in various aspects reaching over 500,000 yuan. Now, the all-new ES8 is set to become NIO's anchor model again. In the future, the pricing and technology platforms of all products will be restructured based on this anchor model."

At the communication meeting following the release of the second quarter financial report, Li Bin once put forward such a viewpoint.

The implied meaning I gathered is more like a chain reaction; with the launch of the all-new ES8, NIO's entire pricing system is being completely overhauled and reshaped.

At the Chengdu Auto Show, NIO announced that its current models would come standard with a 100 kWh battery at no extra cost, which instantly sparked dissatisfaction and even strong words from many existing car owners.

Even under the immense pressure of "backstabbing" users, NIO has to make many adjustments and decisions to stay in the game. This new power in car manufacturing is well aware that it must quickly recognize and position itself in the "new position" within the Chinese car market.

The fundamental reason behind this is that as the electrification transition has reached such a stage, the Matthew effect is continuously intensifying, and industry resources are increasingly converging and concentrating towards the leading frontrunners.

Despite having been deeply engaged in the industry for over a decade and seemingly establishing a certain moat, NIO still faces the scenario of "returning to square one overnight" in the face of the giants' disruptive attacks.

Currently, the best way to break the cruel internal competition is the "knife" of pricing.

In the brand-new ES8, I see compromise, helplessness, a strong survival instinct, and a determination to win decisively without leaving any room for error.

Li Bin deeply understands that "staying alive is more important than anything else; only by staying alive do we have the right to talk about the future." Similarly, last night I kept contemplating, "People often make the most correct decisions when faced with adversity."

Indeed, this year NIO has been pushed to the edge of a cliff. This year's NIO Day marks a new starting point for this company, which has long been at the center of public opinion as a new force in car manufacturing, to break illusions, return to reality, and start anew.

02When the fourth quarter profit target is within reach.

On the eve of this year's NIO Day, NIO has just secured another round of financing exceeding 1 billion USD. This timely infusion can be seen as crucial supply preparation for the gradually unfolding "final battle."

Since the beginning of the year, Li Bin has repeatedly made public commitments to achieve profitability in the fourth quarter. With the conclusion of this year's NIO Day and the official introduction of the new ES8 as a crucial foundation, it is time to assess the final results.

As for the solution, it is actually clearly laid out on the table.

On one hand, NIO's delivery target for the fourth quarter will be aimed at 150,000 vehicles, which translates to an average of 50,000 vehicles per month. Further breaking it down, according to William Li’s previous hints, the LeDao L90 and the all-new ES8 will each ramp up to a monthly production capacity of 15,000 units across the entire supply chain in October and December, respectively.

In contrast, for the entire fourth quarter, the overall monthly production capacity target for the two brands is 25,000 units each. Correspondingly, the target for the third brand, Firefly, is 6,000 units.

With support from the manufacturing side, it also means that on the sales side, the aforementioned two all-electric large six-seater SUVs will jointly contribute as much as possible to a monthly sales target of 30,000 units. The remaining 20,000 units depend entirely on the newly upgraded Le Dao L60 and the gradually improving reputation of the Firefly, including the "5566" model, which offers more features without an increased price and comes standard with a 100 kWh battery pack.

On the other hand, in the fourth quarter, NIO's vehicle gross margin aims to rise to 16%-17%, with the margin targets for the LeDao L90 and the new ES8 aimed directly at 20%. Additionally, after improving efficiency on multiple fronts, R&D investment and marketing expenses have been continuously reduced. Rough calculations suggest that with rapidly increasing revenue and gradually controlled spending, the profitability model seems logically feasible.

Certainly, from an outsider's perspective, the protagonist of today's article has also reached a point where self-sufficiency must be achieved.

In the words of Li Bin from the interview, "Currently, about 30%-40% of consumers are hesitant to buy NIO because they are worried about the company going bankrupt. If we can achieve profitability in the fourth quarter, this rumor will be dispelled, user confidence will be strengthened, and many issues can be easily resolved. It will also serve as a comprehensive test of our business model and strategic choices."

In other words, there is no room for maneuvering.

Last night, in addition to promising the immediate delivery of the all-new ES8 upon its launch, Li Bin also reassured everyone to feel confident in placing their orders. For users who cannot receive their cars this year, NIO will cover the losses incurred from the reduction of new energy subsidies next year.

Everything is for winning this crucial battle that cannot be lost.

Nonetheless, it is still worth being vigilant as the intensity of competition in the Chinese car market far exceeds expectations. In the remaining three months, NIO will undoubtedly face many challenges and difficulties, both overt and covert. Reflecting on the painful lessons of the past, especially the shortcomings in production capacity, there is definitely no reason to pop the champagne early.

Next year, in my eyes, may be even more perilous.

Honestly, with NIO's current momentum from the successive launch of the L90 and the new ES8, combined with the upcoming phase-out of new energy subsidies, the Chinese car market is sure to experience a small surge, significantly increasing the likelihood of achieving the fourth-quarter profitability target.

In contrast, whether they can take another big step forward and attempt to achieve the milestone of "full-year profitability" is the ultimate battle for this new car-making force. I believe that any company needs sustained success, not just a fleeting moment of glory.

Based on this background, I want to talk about some areas of concern in my mind.

After launching the Liaoshen Campaign and the Huaihai Campaign mentioned at the beginning, NIO seems to have ushered in the era of large three-row pure electric SUVs. However, next year, formidable competitors like AITO, Li Auto, and Xiaomi will certainly not sit idly by and will launch a new wave of fierce counterattacks.

If this year's Chinese car market is a red ocean, then the color will undoubtedly become even bloodier next year.

Ensuring the continuous and stable output of LeDao L90 and the all-new ES8 has become the first challenge.

Both Firefly and LeDao L60 operate in niche markets that are fraught with insurmountable challenges, and competing for a share in a thorny forest is understandably difficult.

At the same time, from NIO's upcoming product planning, the focus of new launches will mainly concentrate on three models: the flagship ES9, the all-new ES7, and the Leidao L80.

The former, which can be considered the family's flagship, is almost difficult to achieve high sales volume. The latter two models, pure electric large five-seater SUVs, seem more like a complement to the all-new ES8 and LeDao L90. Considering the inevitable internal competition, achieving a sales effect of "1+1 > 1.5" would already be considered satisfactory.

Anyway, I always feel that the above multiple trump cards are still not enough to cope with the increasingly brutal struggle with ease.

At the Chengdu Auto Show, Qin Lihong mentioned that the "5566," which serves as the sales pillar of the brand, will not have a major overhaul planned for next year.

However, I always feel that their inclusion should be accelerated.

After the all-new ES8 has restructured NIO's entire pricing system, the NT3 platform's "5566" should strive to fight bravely with a renewed spirit.

After all, the mid-sized sedan and mid-sized SUV markets remain one of the largest segments in the Chinese automotive market. Of course, from the perspective of corporate development, everyone will have their own pace, and NIO is no exception.

After experiencing the journey from the bottom back to halfway up the mountain this year, we have reason to believe that this new car-making force has gradually found a suitable "way to survive."

Like the theme of this year's NIO Day: Rooted Downward, Growing Upward.

With William Li letting go of his obsessions and NIO returning to reality, this company, established over a decade ago, should enter a new phase. More grounded, more pure, more efficient, healthier, and never forgetting its original mission.

Last night, the early autumn in Hangzhou was very pleasant, and I hope it can continue to improve...