- The Nio main brand will have a highly anticipated model in the fourth quarter, and Onvo will also begin deliveries a new model in the fourth quarter, which may be called the L80.
- Li once again emphasized that Nio will achieve profitability in the fourth quarter, otherwise it will be a major test of its business model.
Nio (NYSE: NIO) founder, chairman and CEO William Li spoke to a small group of media yesterday, covering topics including the company’s upcoming product roadmap and profitability target.
The Nio main brand will have a very “heavy-weight” model in the fourth quarter of this year, and it is also a model that the company has high hopes for, Li said during the interview held in Beijing yesterday afternoon, according to a report by LatePost today.
In Nio’s second-generation products, that is, the 2022 to 2024 product cycle, the company made some unnecessary mistakes, according to Li.
For the third-generation products, the company is focusing on the Chinese market and starting to make the cars bigger and add features that users can more clearly see, he said.
On this new product to be launched in the fourth quarter of this year, the product definition and cost setting are very competitive, and it will also use Nio’s latest technologies, Li said.
“The Nio brand has a total of six new products this year, and we are very confident that we can return to the center of the stage and gain enough share in the markets we are in,” he said.
The Nio brand currently has nine models on sale — the ET9, ES8, ES7, EC7, ET7, ES6, EC6, ET5 and ET5 Touring. The sub-brand Onvo currently has only one model, the L60, and the other sub-brand Firefly will officially launch its first model on April 19.
The Firefly project was set up with a view to the global markets, not just a single market, Firefly president said.
During an earnings call on March 21, Li said that Nio Inc will have nine new models this year, including new models and updates to existing models.
Nio previously said that updated versions of the ES6, EC6, ET5, and ET5 Touring will be launched this year, and regulatory filings have already been made for them. Deliveries of the four updated models will begin in May and June, Li said yesterday.
On March 29, deliveries of the ET9 executive flagship sedan will begin.
Onvo has already started to warm up for its second model, the L90, last month, and said that the model will be unveiled in the second quarter and launched in the third quarter. In addition, Onvo will have a new model in the second half of this year, the brand previously said.
Including the first model of Firefly, Nio Inc has already revealed that there are eight new models that have not yet started deliveries.
The Nio brand new model due in the fourth quarter of this year mentioned by Li should be the ninth model, which may be the updated ES7 SUV (sport utility vehicle).
The Onvo L90 will be unveiled at this year’s Shanghai auto show, and the model has achieved a leapfrog innovation in space and user experience through technology, Li said in the interview yesterday.
Onvo shared a new image today about the L90, continuing to benchmark the model against Li Auto.
It will be a model that truly meets the daily usage scenarios of China’s large SUV users, and makes full use of the advantages of the pure electric platform and the advantages brought about by Nio’s innovations, he said.
“You can definitely look forward to it, and I am very confident about its sales,” Li said.
Onvo also has a large five-seat SUV, which may be called the L80, and deliveries will begin in the fourth quarter, he said.
All three models of Onvo are mainly aimed at family users, and its brand potential will slowly come back, Li said. “We are indeed prepared, not without ammunition.”
Firefly was originally a model tailored for Europe, but due to recent changes in tariff policies, it will also be sold in China, he said.
“Firefly will start deliveries at the end of April, and there is an eight-month product cycle this year,” Li said.
Li also mentioned that to achieve the Power Up Counties plan, Nio will add 1,800 to 2,000 battery swap stations this year.
Currently, Nio has 3,189 battery swap stations in China, and has provided nearly 70 million battery swap services in total.
Li emphasized that the construction funds for this year’s battery swap stations will be mainly from partners. “Others will build the stations, and we will rent them for use and operation, and we will move forward according to this model.”
Nio announced the Power Up Partners program on August 20, 2024, hoping that partners will jointly build charging and battery swap facilities. At that time, the program saw the signing of the first batch of partners.
Under this model, partners can make money, and Nio also saves capital expenditure, Li said in the interview yesterday.
Li also mentioned that the international markets will provide sales support for Nio this year. “We will enter 25 countries and regions this year, and so far there is no problem with that.”
Nio started selling cars in Norway in 2021 and did well at the time, but this caused the company to make a misjudgment, according to Li.
“Although Norway is also in Europe, Norway is very different from Europe and is not the same thing. Norway is a non-EU country, and we misjudged the situation by treating Norway as Europe,” Li said.
Nio has invested heavily in Europe in recent years, but did not anticipate the low efficiency of countries such as Germany, where it takes 10 months to build a battery swap station, and some even take a year, he said.
The sales and service network there is climbing too slowly, which means high costs, Li said.
In Europe, Nio will no longer use past strategies going forward, according to Li.
Nio, Onvo and Firefly will seek local partners when they expand into global markets in the future, but this is not a dealership model, Li said.
Nio will basically have only one sales partner in one country, and it will operate locally according to Nio’s direct sales model, using existing resources, including stores and service facilities, he said.
Li reiterated in the interview that Nio’s goal is to achieve profitability in the fourth quarter of this year.
If profitability cannot be achieved as expected in the fourth quarter of this year, it will be a major test for Nio’s long-term development and business model, Li said.
Achieving profitability is not a complicated matter. It is simply a matter of increasing sales and keeping the gross margin and expenses at a reasonable level, he said.
Nio was closest to profitability in 2021, when it sold only 90,000 vehicles but had a gross margin of more than 20 percent, he mentioned. “At that time, we had not yet entered a new expansion cycle, and expenses were well controlled.”
From 2022 to the present, Nio has entered a new expansion cycle with increased investment, he said.
Twelve full-stack technologies, such as chips and operating systems, are all investments of billions of RMB, he said, adding that there are also development costs for new models of the three brands.
He mentioned that Nio has very strict financial discipline, and the intangible asset item is only just over 4 million US dollars. “We have expensed all research and development costs in the reporting periods and not capitalized them, which makes our accumulated losses appear higher and our assets appear lower.”
This lays a good foundation for achieving profitability in the future, because the investment has been completed in the past, and the next step is to enter the harvest period, he said.
“Why are we confident about profitability in the fourth quarter of this year? The core reason is that these investments will show results this year. Our management actions will also see results this year,” Li said.
This post provides live updates on the key takeaways from Nio’s fourth-quarter 2024 earnings call.
