In 2023, NIO has set a small goal

For NIO and Li Bin, I believe 2022 will be an unforgettable year.

After experiencing the “blindfolded running” in the early stage, Weilai hit the “rookie wall” in 2022. Starting from Q3 in 2021, Weilai’s delivery volume has remained at 25,000 vehicles for four consecutive seasons, showing a situation of sluggish growth.

Behind this is that Weilai has entered the stage of model replacement. Starting from the third quarter of 2022, Weilai’s product line has begun to upgrade and iterate, switching from 866 (ES8, ES6, EC6) of the first-generation platform to 775 (ET7, ES7, ET5) of the NT2.0 platform. With the launch of new models, Weilai changed its previous decline, and its sales also ushered in growth again. In Q3 of 2022, Weilai will deliver 31,600 vehicles, a year-on-year increase of 29.3% and a month-on-month increase of 26.1%.

For a new energy brand, in addition to maintaining continuous sales growth, it is more important to be aware of the current stage and rhythm of competition. According to Li Bin, chairman of Weilai, from 2019 to 2023 and 2024 is the qualifying stage for new energy vehicles. Then in 2023, it will enter the final stage of qualifying. This also means that every step of Weilai will directly affect the next competitive landscape.

Perhaps because of this, at the just-concluded NIO Day, Weilai lost a bit of the “crazy” black technology market in previous years, and the functions of new products tended to be more pragmatic. Even the company’s goal has changed from the “benchmarking BBA” that was talked about in the past to the more specific and pragmatic “sales surpassing Lexus next year.”

01 Weilai’s “Spring Festival Gala”, starting to be boring?

The NIO Day held at the end of the year is like NIO’s annual “Spring Festival Gala”. From ES8 and NIO Power in 2017, ES6 and electric coupe SUV EC6 in 2018 and 2019, to ET7 and NAD autonomous driving in 2020, and ET5 and globalization strategy last year. In the past few years, NIO has always brought some surprises on NIO Day.

This year’s NIO Day is a little bit “boring”. Although there are new products, it does not have the excitement of previous years, and there are slightly fewer people posting orders in the circle of friends than in previous years. This time, Weilai has brought two new cars – the new ES8 and the new coupe SUV Weilai EC7, and also launched the third-generation power station and 500kW fast charging pile. However, several more cutting-edge products are rarely mentioned, such as 150-degree solid-state battery packs, 800V supercharging, and breakthroughs in smart driving scenarios.

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NIO ES8 | Image source: NIO

The two new products released by NIO this time, ES8 and EC7, are technically not much different from the ET7 and ES7 already on the market. Both use the NT2 platform, using similar lidar technology and automotive chips, front and rear dual motors and ICC chassis domain control, as well as Banyan and NOMI. If you want to talk about the difference, EC7 and ES8 use new headlight technology and new self-developed skeleton seats, while EC7 has a newly developed active lift-type rear wing. Although there are differences in configuration, they are not big, and they are icing on the cake.

Even compared with the old ES8, the new ES8, in addition to shifting from the first-generation platform to the second-generation platform, has more functions to check for leaks and fill in gaps. For example, the battery life of the ES8 has been criticized for a long time. This time, the new ES8 provides three battery pack options of 75kWh, 100kWh and 150kWh, with a battery life of 465km, 605km, and 900km respectively; Cavity air suspension, CDC dynamic damping control system, Bosch IPB intelligent brake-by-wire system.

The innovation of new products is limited, so for this NIO Day, the feedback of many people is that there are no surprises. However, the mediocrity at the level of public opinion does not represent sales at the market level. Although compared with the past few years, this year’s new models have less refreshing black technology. But putting these two new cars into the entire new energy market, they still have very strong product power.

This is very similar to the situation when Tesla Model Y was released in 2019. At that time, before Tesla launched the Model Y, the outside world was guessing how the new car would explode and what disruptive “black technology” it would carry. But when Model Y was released, many people were obviously disappointed, “Model Y is the elevated version of Model 3.” But this does not prevent Model Y from becoming Tesla, or even the best-selling model in the world. According to the statistics of Clean Technica, an authoritative foreign automobile organization, from January to October 2022, the total sales volume of Model Y is about 570,000, making it the best-selling electric vehicle in the world.

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NIO’s third-generation power station | Image source: NIO

02 Sales surpassed Lexus? pick soft persimmons

The new products are a bit boring, but NIO Day still has no shortage of topics. This year, Li Bin’s statement that “Nio’s sales will exceed Lexus in 2023” once again aroused market attention. “Next year, our annual sales will definitely be far from the sales of gasoline vehicles of BMW, Mercedes-Benz and Audi. This needs to follow the rules. But I think that next year, the sales of gasoline vehicles that will surpass Lexus gasoline are still very confident.”

Lexus has always been the “dark horse” of luxury brands, especially in the domestic market, and its sales have grown for 17 consecutive years. However, in 2022, as the market share of gasoline vehicles is further squeezed by new energy vehicles, Lexus will also face greater sales pressure. According to data from the Passenger Federation, Lexus will sell 226,000 vehicles in 2021. In the first 11 months of 2022, Lexus’ cumulative sales will be 168,600 vehicles, a year-on-year decrease of 16.45%.

In contrast, Weilai delivered a total of 106,700 vehicles in the first 11 months. Looking at the sales in the first 11 months alone, the difference between Weilai and Lexus is about 60,000 vehicles. This also means that Weilai must achieve a growth rate of more than 60% in order to surpass Lexus next year. If we refer to Weilai’s growth rate this year (31.8% year-on-year growth in the first 11 months), it is not easy for Weilai to achieve this.

However, it is important to note here that what Li Bin mentioned was the sales of fuel vehicles of Lexus. Currently, hybrid models account for about 35% of Lexus sales. If this 35% ratio is removed, even if Lexus sales return to its peak level next year (226,000 sales in 2021), the sales of fuel vehicles will only be 14.69. This also means that the gap between the two sides has narrowed to only about 30,000 vehicles in an instant. There is basically no pressure for Weilai to surpass Lexus fuel vehicles.

Besides, Li Bin still has a good “good card” in his hand. At present, there are five listed models based on NIO NT2.0 platform, ET7, EC7, ET5, ES7 and the new ES8. In Weilai’s Q3 financial report in November this year, Li Bin said, “We will launch 5 models in the first half of next year, and one of them will always be Weilai’s Model Y. By June next year, we will have 8 models in the market. For sale.” This also means that Weilai will launch three models in the future. According to the available information, it may be the replacement models of ET5 Safari, ES6 and EC6 respectively.

According to this layout, NIO’s product matrix will tend to be more complete, covering medium-sized sedans, medium-to-large sedans, medium-sized SUVs, medium-sized crossover coupe SUVs to medium-to-large SUVs, covering a price range of 300,000 to 700,000 yuan .

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NIO’s newly launched 500kW ultra-fast charging pile | Image source: NIO

In addition to a good hand, the more important thing is that NIO stands at the “window” of the times. In the first 11 months of 2022, the sales volume of new energy vehicles will be 6.067 million, a year-on-year increase of 1 times, and the market share will reach 25%. The China Association of Automobile Manufacturers said it expects sales of new energy vehicles to reach 9 million units in 2023, a year-on-year increase of 35%.

In contrast, the retail sales of conventional fuel vehicles in the first 11 months were 13.34 million, a year-on-year decrease of 14%. In the current luxury car market, under the impact of new energy brands, third-tier luxury car brands have been marginalized. Currently, second-tier brands such as Lexus are also feeling the chill. Even leading brands such as BBA will soon feel the pressure from new energy vehicle brands if they do not launch explosive new energy models in time.

Today’s Weilai and Lexus are like standing on both sides of an escalator, one side is going up and the other side is going down. In terms of product strength, Lexus’ layout in the field of electrification is relatively slow. It is difficult for existing products to compete head-on with new brands, and the planned electric vehicles have not yet been launched; all models of NIO are pure electric. With the blessing of the next generation platform, the product strength is quite strong.

It is worth mentioning that the sales volume of Weilai in November this year has surpassed that of Lexus for the first time. The data shows that Lexus sold 12,600 vehicles in November, a year-on-year decrease of 8.85%. The sales pillar accounted for nearly 80% of the sales volume of the month.

“Nio’s sales will surpass Lexus next year”, this topic seems to be full of gimmicks, and the challenge is great, but after careful study, NIO is always the “winner”. Li Bin is still an “veteran” who knows the media and marketing. Without putting too much pressure on himself, he easily earned a wave of attention.

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