Original link: https://www.latepost.com/news/dj_detail?id=1701
At the beginning of this year, there was a fierce price war in the auto market, and Weilai was the only auto company that firmly promised not to cut prices. That promise has changed today.
On June 12, Weilai announced that the starting price of all new cars will be reduced by 30,000 yuan, and the rights and interests of the first car owner will also be adjusted. Li Bin, the founder of Weilai, said that until three o’clock in the morning on the day of the announcement, the team was still deliberating.
The rights and interests of the first car owner of new car buyers are adjusted to: 6 years or 150,000 kilometers of vehicle warranty, of which the three-electric system can enjoy a 10-year unlimited mileage warranty; 6 years of free car networking; and free road assistance for life.
The most critical point is that the free battery replacement service will no longer be used as a standard car right, and users will pay for battery replacement.
Swapping batteries is the best way to replenish energy that Li Bin saw when he founded Weilai in 2014. It only takes 4 minutes to change the battery at the fastest, similar to refueling. Swapping batteries also allows consumers to purchase cars without batteries separately, and then rent the batteries on a monthly basis, reducing the one-time car purchase cost. Power swapping is considered by NIO to be one of its most competitive services.
In this price adjustment, a new product appeared – the rights upgrade package. Weilai stated that users who pay a deposit to purchase a new Weilai car from June 12, 2023 to July 31, 2023 can choose to purchase an equity upgrade package in the Weilai App-Vehicle Configurator according to their own needs. The price is 30000.
After purchase, the rights and interests of the first car owner are as follows: free battery replacement for life (4 times per month), 10-year unlimited mileage warranty for the whole car, free Internet of Vehicles for life, 8GB data per month, and free road assistance for life.
In other words, Weilai’s services have been realized into an equivalent of 30,000 yuan.
In order to compensate “old car owners”, although the old car owners who have already picked up the car cannot refund the price difference, they can still subsidize the price up to 50,000 when the old car is replaced with a new car.
Weilai’s previous model was the “package model”, that is, all car owners share the electricity bill. Today, although the price of Weilai’s car has dropped by 30,000 yuan, the model has also been adjusted to sell services and new cars separately, giving users the right to choose, and they can choose whether they need “equity upgrade packages” according to their own needs.
Qin Lihong, the co-founder of NIO, wrote this adjustment into a doggerel: the price will be adjusted by 30,000 yuan, old friends will pay tens of billions, the set menu will be changed to a la carte, and there will be no big pot.
On the day when new car prices and rights were adjusted, Li Bin held a face-to-face event for car owners.
“Now more than 300,000 old car owners are given a deduction of 30,000 yuan in rights and interests, which is equivalent to NIO’s 10 billion yuan subsidy for old car owners to repurchase.” Li Bin has also struggled with the 30,000 yuan deduction, for example, it is less, and it is reduced by 2.5 Wan, “Then 300,000 users will save 1.5 billion yuan, and it is not easy to make some money now.” Li Bin said that Weilai originally wanted to do this, but “the pressure on funds has passed.”
“I’m going to unload the burden today,” Li Bin said. In his opinion, the price makes some new users put Weilai’s car in the choice of purchase. “This is still very important.” “Don’t scare people away. The overall price competitiveness should definitely be much higher.”
In the first five months of this year, Weilai was in the replacement period. The old models were discontinued. Only the ET5 and ES7 were normally delivered for the new platform models. Other models were just renewed, waiting for delivery, or not yet released. The 2023 ET7 and the new ES6 will be delivered on May 19 and May 24 respectively, and NIO’s new ES8 will be delivered in late June. The travel version of ET5 will be listed and delivered on June 15th.
Weilai’s sales were affected by this. In the first five months of this year, Weilai delivered a total of 43,900 new cars, and the delivery volume continued to decline in April and May, reaching 6,658 and 6,155 respectively. Compared with the ideal, 106,500 new cars were delivered in the first five months. In the second quarter, Weilai gave a delivery guideline between 23,000 and 25,000 vehicles. To meet sales expectations, Weilai needs to sell 10,187-12,177 new cars in June.
Car sales have declined, and Weilai’s financial performance has not been good. In the first quarter of this year, NIO’s revenue was 10.68 billion yuan, a 33.5% decrease from the previous quarter; its net loss was 4.74 billion yuan, a 165% increase year-on-year. Gross margin fell to a new low of 1.5%, compared with 14.6% in the same period last year.
Weilai’s business is complex and its strategy is fully rolled out. If sales continue to fall short of expectations, cash flow will be in crisis, and the confidence of suppliers and investors will also be lost.
After the battery exchange service is no longer bundled, Weilai has a lower entry price, and the price has dropped below 300,000 for the first time, which will greatly enhance the competitiveness of Weilai’s products.
After the price adjustment, the starting price of Weilai ES6 is 338,000 yuan, which is nearly 50,000 yuan cheaper than the old ES6, and is comparable to the price of 339,800 yuan for the ideal L7 Pro version. In 2022, the sales volume of Weilai ES6 will reach 42,300 units, surpassing the 26,700 units of BMW iX3, ranking the sales champion in the electric vehicle market of 300,000-400,000 yuan. The starting price of NIO ET5 is 298,000 yuan, making it the most direct competitor of Model Y and Jikrypton 001.
“The number of consumers who inquired and visited the store has increased,” Qin Lihong revealed.
Li Bin said today that after ramping up production capacity in June, the new ES6 is confident that it will reach monthly sales of 10,000 units in July, returning to the scale of monthly sales of more than 10,000 units. The second-generation technology platform models are expected to enable NIO to achieve an average monthly sales target of 20,000 units.
With the delivery of higher-priced products in the second and third quarters of this year, Li Bin has set a “double-digit” target for the gross profit margin in the third quarter of this year, and it will exceed 15% in the fourth quarter.
Weilai’s adjustment to the rights and interests of free battery replacement is the most critical measure in this price reduction action. Li Bin introduced that Weilai is testing a new charging method for power station replacement. Now the charging logic of the power station is similar to the charging pile, which is the sum of the electricity price at different time periods/different locations and the service fee per kilowatt-hour. The new charging logic is based on electricity prices in different time periods/locations + a fixed single service fee. After August 1st, NIO will charge new users for battery replacements, with an average single charge of about 80-100 yuan.
Qin Lihong said that NIO may launch a power exchange package in the future. “In the future, there may be discounts on a per order basis, such as 50 times, rather than purchases based on time. Discounts for bulk purchases are normal logical thinking.”
NIO has undergone many adjustments for energy replenishment rights and interests. From unlimited free battery replacements in 2019, to 4/6 free battery replacements in January 2020 (4 of which will be provided with home charging piles), and then reduced to 4 times in April 2023. Weilai explained that the initial free fee is to cultivate user habits, and when user habits are cultivated, the adjustment of rights and interests is put on the agenda.
But this does not mean that Weilai has shrunk in battery replacement services. Li Bin said that Weilai still insists on deploying 1,000 battery swap stations this year, “the number internally shouted is higher than this.” We will still consider insisting that the swap station be open to all Weilai users during holidays.
This means a lot of investment. At this year’s Shanghai Auto Show, Qin Lihong made a calculation: Weilai will not fill every power station with batteries. Even if the batteries are full, the cost of a single mobile power station is more than 3 million yuan. According to the allocation of fixed costs, 8 years, a day is more than 1,000 yuan. On average, NIO serves more than 50 orders per power station, which can achieve a break-even balance.
On June 12, Li Bin released a set of data on Weibo. As of today, Weilai has built 15,881 charging piles and 1,484 battery swap stations, providing users with more than 22.9 million free battery swap services. NIO’s first battery swap station was on May 20, 2018. The number of battery swaps per day for a single swap station has not yet reached the profitability standard.
The time for Weilai car owners to change batteries is shorter than that of fast charging and slow charging. It takes 4 minutes and 51 seconds for Weilai to change the battery once. In the fast charging mode, the charging time is 48 minutes. In the slow charging mode, the charging time is 12 hours. However, the price of battery replacement is higher than the cost of fast charging. The average cost of a single battery replacement in Weilai is about 80-100 yuan, and the cost of fully charging a tram is about 20-80 yuan.
At present, NIO’s battery swap business model has not yet achieved profitability. Under the charging model, in order to attract more users to use the battery swap service, it needs a better experience and a lower cost than fast charging. This is not an easy task.
The following is Li Bin’s speech at today’s user face-to-face event:
Today at 10 o’clock we announced the price adjustment and equity adjustment of all new cars. After the tweet, the attention was higher than I imagined. Our user community is really still very supportive of us. I know that this solution is definitely not satisfactory to every user, but everyone still understands and supports it very much. Everyone knows our sincerity about our plan. It is true that we are still deliberating at 3 o’clock in the morning today. In fact, the final plan is not fundamentally different from our initial plan, and we discussed it repeatedly for a long time. During the process, some users were harassed by me and Lihong, let us know what new users and old users think, which is valuable to us, and we will spend more time answering your questions later .
I have told you some things before, and everyone knows that Weilai’s service system, especially our charging and swapping network, has always been our core competitiveness, and it has always been a very important aspect that users have given us affirmation. The numbers can still be talked about. For example, we have (layouted) 15,881 charging piles, 1,484 battery swapping stations, and we have provided 22.9 million free battery swapping services. These actually give us the confidence to give users Provide some more flexible and considerate service experience. Why put this matter together? Because the foundation of flexible and considerate service experience must come from your strong service ability. In the past, in 2019, we engaged in life-long free battery replacement, unlimited times, and one size fits all. Now the needs of users are becoming more and more diverse. If we did not have the ability to build infrastructure and service systems in the past few years, what we do today The basis for such adjustments is not so solid. This is not a cliché, but an inner thought.
Let me briefly tell you about the content of price and equity adjustments. Rights and interests, in fact, is to simplify it, 6 years or 150,000 kilometers of warranty for the whole vehicle, 10 years of unlimited mileage warranty for three electric vehicles, 6 years of free Internet of Vehicles, and free road assistance for life. Our adjusted rights are still the industry benchmark. After the original free battery replacement super rights are removed, we are still the industry benchmark, and everyone can correct it bit by bit. Many (brands) may be 60,000 kilometers in 3 years, and some may be 3 years of traffic and so on. I hope that everyone, no matter if you are a new user or an old user, can understand that Weilai still leads the majority of the industry after adjusting the rights and interests. Of course, it cannot be said that every item is the best, but overall it is the best. There is also a very small signal here, that is, if you buy the brand new ES6 and brand new ES8 on July 31, we still give away the charging pile at present, let me say this in particular.
Of course, on the basis of such rights and interests, the price of our new car series has been reduced by 30,000 yuan. You can compare it. For example, ET5 starts at 298,000 yuan, BaaS version starts at 228,000 yuan, and the new ES6 becomes 338,000 yuan. I remember that before the launch of the new ES6, many users told me earnestly, Brother Bin, you must set a price of 338,000, and if you say it will definitely sell out, I was thinking about this in my heart at that time, but at that time I thought The timing is not particularly ripe, there are many reasons we will talk about later.
I just want to talk about it today. If your friend wants to buy our car in the future, you ask him to compare it with BMW, Mercedes-Benz and Audi. For example, if you take the new ES6, you compare it with BMW X3, GS3 and Q5, because He also has fuel costs. Compared with his battery, our battery rental fee is definitely cheaper. This is mainly compared with gasoline vehicles. This is compared with the tram. Of course, the tram plus the convenience of our charging and swapping network service can have such a logical comparison between the two. ES7 is 438,000, EC7 is 458,000, and the new ES8 is back to 498,000. Of course, I have also said something before. Today I unloaded the burden and said that Weilai will not produce a car under 300,000 yuan. It can be over 300,000 yuan if you choose it casually. It is still very important for users to let Weilai’s car into their purchase options. Don’t scare them away. The competitiveness of the entire price must be much higher.
From the perspective of gross profit, this price adjustment actually makes no difference to us in the long run. Everyone knows that we also have a performance cost for free battery replacement. We just said that we will give users more choices. I have some that I have to fulfill the contract for a long time. Now I just give you a choice. You have charging at home. Pile, if you think it’s more cost-effective, you don’t have to pay the 30,000 yuan, which is basically not much different for the company. This is actually the difference between our price adjustment and other people’s price adjustments. It does not have much impact on my long-term gross profit margin. big. I think there is another media today saying that Weilai seems to be more cost-effective after this adjustment. Everyone’s perspective is different, but in essence, we are making this thing more flexible, so that users can use their own cars according to their needs. Whether there is a way to install charging piles at home, whether there are charging piles at work, whether there are too many business trips, is to give you the flexibility to choose your own purchase options.
Of course, before July 31, we also have a limited-time purchase of the rights upgrade package, the price is 30,000. The 30,000 yuan is actually the same as the 30,000 yuan that was reduced just now. You can also know that we have not changed the configuration of the car this time. The main reason is that the service part has made it explicit, and the value of the service has been made explicit. At the same time, the right to decide whether to buy the value of the service is given to the user. Of course, why do you say it’s okay? People don’t think that Weilai is reducing the allocation and price. It’s just that the way I serve you may have been a package, but now it’s more convenient for you. I think this way is actually better for users. of.
What about old users? This is a very important reason why we have not launched the equity adjustment policy for a long time. There are some adjustments that are so easy that we can basically adjust them without much discussion, and it can be something that can be discussed in an hour. But for the users who have already picked up the car, how to take care of everyone’s interests is a brain-intensive and complicated matter. How to simplify the complexity and find the largest common denominator that everyone can accept. It is definitely impossible to have absolute fairness and absolute reasonableness in this, and it is impossible to satisfy everyone, but how to make everyone accept it and make everyone understand it in general? I often ponder with Li Hong and many colleagues. I have also listened to the opinions of many users, whether it is a phone call or a face-to-face communication, it is not easy for us to determine such a plan. Why is it said that it was 3 o’clock yesterday, and I saw that they were still awake after 2 o’clock yesterday. I thought about it there, and I said that there is still one thing to be confirmed. After discussing for another hour, I finally maintained the original conclusion, but This discussion process itself is very meaningful. I often say that when we actually do things, we hope to be able to have a clear conscience. What does this clear conscience mean? I have thought about it over and over again. It is thoughtful, and we have thought about what everyone thinks. This is the most difficult part for us to discuss this matter.
The rights and interests of repurchasing a new car. Let me first say that some users may say that I have never used some rights, please refund me. Sorry, I really can’t do it. Once you withdraw like this, our cash flow will be directly lost. We can’t do it. So this matter, although many users have such expectations, which is reasonable in a sense, but we can’t do it, and we haven’t violated our promise, and we don’t need to do it legally.
We later repurchased a new car, and I came up with the idea that the rights and interests can be transferred and the purchase price of the car deducted. Kevin (Shen Hong, Assistant Vice President of Weilai) and I talked about this for the first time. He said that he had never thought about this before, because it required a lot of money to do it. Indeed, I am the only one in the company who can make this decision. I still have to convince our internal financial department and ask the board of directors for approval. This matter must be approved by the board of directors. Our board of directors held a meeting specifically for this matter, because this matter It will have an impact on the gross profit in the next few years, and it is not a trivial matter. For example, 330,000 users choose to deduct the purchase price of the car. If it takes three years to replace the car, of course, for us, we like it very much. If more than 10,000 × 30,000 is 10 billion, it is not a trivial matter. Why was it still being discussed in the middle of the night yesterday? I wanted to go back. I asked if 30,000 was too much, and 25,000 would be enough. Why? Even if half of the users of 5,000 yuan are multiplied by 150,000, it is 750 million. It is not easy to make some money, and these things need to be more detailed.
If you choose to transfer (equity), some users may not understand this matter. In fact, we have always had such rules. If you repurchase our new car, you can transfer the four types of rights and interests on your original car to the new car. Now there is a “My Rights and Interests” in our APP, which can be transferred to the new car. Let me tell you again, including our warranty rights, free battery replacement rights, 40% off battery upgrade rights, early users have the rights to recharge in different places, and we can transfer them all. It is to buy a new car from Weilai, and the rights and interests can be transferred, which is equivalent to inheritance, so the value of this rights and interests is valuable in this place. For example, it doesn’t matter if you sell your car and don’t buy our car again. We haven’t violated our promise. You can buy someone else’s car, but we can transfer it if you want to buy a new car.
You have to say, I have a charging pile at home now, or I don’t use the car very much, I don’t want to transfer it, or I think the rights and interests don’t mean much to me, so we can deduct the purchase price of the new car when we buy a new car . At this time, we are bundling the three rights together, that is, free battery replacement for life, full vehicle warranty, and free Internet of Vehicles for life. By tying these three original super rights together, they can be combined to deduct the purchase price of a new car. The deduction rule for the purchase price of a new car is that if you originally had 4 or 6 rights, you can deduct 30,000 yuan. Yesterday we repeatedly discussed whether to make a distinction between 4 and 6 times, which is very cumbersome. Later we decided to combine 4-6 times together. Because this matter is not a simple matter of accounting, some users use more, some users use less, and we have tied the three rights together, such as some 10-year warranty, some lifetime warranty, We later simplified the complexity so that everyone would not have a headache, it was all 30,000.
From 2019 to 2021, there was a user who had unlimited free battery exchanges. This is indeed quite different, and it is also divided by time. We have a deduction of 50,000 (policy), I remember two weeks ago, I asked in the group, I asked how much this (unlimited free battery replacement) is worth, what I said, there are It is said that the value is 100,000, and some say 20,000. Different people have different perceptions, so we think the deduction of 50,000 is OK. Of course, if you want to deduct the deduction and how to calculate it, everyone can calculate it by themselves. If you think it is cost-effective, it is more convenient to either keep the rights or deduct the car payment.
In this way, whether it is a new user or an old user, we now make this matter a little easier. When buying a car, make this decision completely according to your own needs. From my own point of view, if you really use your car less or you have a charging pile at home, I think you can just buy the super benefit package. Our battery replacement is basically the same price as charging. In fact, Fortunately, it doesn’t take that much money. Of course, if you use a lot or have no way to install charging piles at home, it is actually worthwhile to have this super benefit package.
Of course, we can also simulate some scenarios. For example, as I said just now, new users buy a car for the first time, because we can still buy the rights upgrade package before July 31. As I just said, if you don’t choose the rights upgrade package, the car price It must have been adjusted by 30,000 yuan. If you choose the rights upgrade package, the price is still the same as the original car. I will also talk about its benefits. If you choose the rights upgrade package, you can still buy it again. Putting the equity in the new car can be understood as buying an equity there, which can be transferred, and it can be converted into money when buying a new car in the future. Let me explain this rule to you. It is equivalent to saving a sum of money. Of course, the premise is that you think that Weilai is not bad, and you are willing to use Weilai’s car all the time. This is equivalent to this. I think this metaphor is better.
Old users are users who have already picked up their car. If you buy a new car from Weilai, the price can be ignored. For example, if you are willing to deduct the price of the new ES6 from 368,000 yuan, you will become 308,000 yuan. I think it is more sincere Yes, this is how old users repurchase. Of course, if the new ES6 BaaS version is reduced by 70,000, of course the entry-level starting price will be even lower.
Let’s talk about repurchase here. Some users have already sold their cars and haven’t bought a new car. It may be due to various reasons such as indicators and time. We must pay special attention here. If your original car is sold and you want to buy it again, we will give you The rule has always been within one year, and we haven’t changed it, that is, we don’t consider it a repurchase after one year, that is, we leave for too long, and we don’t care if we lose contact for too long, because everything always needs to There is a time deadline.
The same goes for benefit upgrade packages. Pay the deposit before July 31. After July 31, do we still have the rights upgrade package? There is a high probability that we don’t have any, but we will listen to everyone’s opinions, because when we were discussing internally a few days ago , the main reason is that it is too complicated to explain to users. After all, a certain threshold is required to understand the configuration of Weilai. After all, there are too many combinations, including products and various equity combinations. Therefore, we have specially developed an equity center, as well as BaaS and Worry-free service and more. These are not very complicated, but there is still a threshold for logical understanding, and it is also very hard to explain to everyone, so we hope to simplify it with a high probability. However, we will definitely launch some very competitive products related to charging and swapping, which are equivalent to value packs. We are conceiving this matter now, and we still need some time to study it in detail, so that everyone can feel that it is more cost-effective to add electricity. This is what we are doing.
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