NIO, which is facing the pressure of "falling behind" in the domestic market competition, has entered the European market in a big way, involving five countries, and even its business model is "in the country", however, this new way out is still extremely bumpy...
After the first European leg at sea, NIO (hereinafter referred to as "NIO") adjusted its strategy.
This time, NIO replaced the original direct operation model with a "subscription model" that follows the trend, but it is still unknown how high the market acceptance is.
Under internal pressure, NIO's external "battle" is not optimistic.
Avoid "hitting the south wall"
Recently, NIO announced its strategy to enter the European market in Berlin, Germany, and will provide services in four countries: Germany, the Netherlands, Denmark and Sweden. Counting the Norwegian market entered in 2020, NIO's layout in Europe has involved five markets.
As the first stop to enter Europe, NIO has invested resources in the Norwegian market since 2021, and even abandoned the easier way to cooperate directly with local distributors and chose the direct operation model.
At that time, NIO announced that it would build the first European NIO center in Oslo, the capital of Norway, and in 2022, it will successively build four NIO spaces in Bergen, Stavanger, Trondheim and Kristiansand in Norway, and provide charging and swapping services.
Despite NIO's greatest "sincerity," the Norwegian market doesn't seem to be buying it.
THE REPORTER QUERIED THE DATA OF THE GLOBAL AUTOMOBILE INDUSTRY PLATFORM MARKLINES AND FOUND THAT IN THE FIRST HALF OF THIS YEAR, THE NORWEGIAN MARKET SOLD 68,505 NEW CARS, AND THE TOP FIVE CAR COMPANIES WERE TESLA (8,062 VEHICLES), VOLKSWAGEN (6,572 VEHICLES), BMW (5,258 VEHICLES), AUDI (4,817 VEHICLES), HYUNDAI (4,488 VEHICLES), AND NIO DID NOT EVEN ENTER THE TOP 20.
In the first half of the year, NIO's sales in Norway were 510 units, which was the lowest monthly sales of Audi, and the average monthly sales volume did not exceed 100.
With Norway's previous experience, NIO chose to enter the country again, and the ET7, EL7 and ET5 it brought will be sold in the form of subscriptions, which is completely different from the direct operation model in Norway.
Specifically, NIO offers both short-term and long-term subscription services in four European countries, which are equivalent to leasing business. Among them, short-term subscription consumers can cancel the monthly subscription at any time two weeks in advance, and can change the vehicle at will, and the monthly fee will be reduced accordingly as the age of the vehicle increases; For long-term subscriptions, consumers can only choose one model, the subscription price is fixed and the subscription period ranges from 12 months to 60 months.
The subscription model is not popular in China, but it is a considerable part of the market cake in Europe.
Auto analyst Zhong Shi said in an interview with the "International Finance News" reporter that the consumption concepts and needs of European consumers and domestic consumers are not the same, most of the high-end electric vehicle users in Europe are more conservative, the emerging products must first wait and see, gradually experience, the use of leasing model, users have no psychological pressure, financial processing is relatively simple. If there are enterprises renting cars in the name of enterprises and tax incentives, the effect will be better.
It is understood that in the European market, especially in Germany, where NIO entered this time, its large enterprises usually provide preferential leasing options or subscription models to employees as benefits, and enterprises usually choose to sign relevant leasing contracts directly with leasing companies or car manufacturers, which can reduce vehicle costs as much as possible and improve vehicle utilization, and with the support of German policies, the subscription model/leasing model can be popular in Germany.
Zhong Shi believes that from a marketing point of view, NIO has just entered the four European countries, if it chooses the same direct operation model as Norway again, it will definitely "hit the south wall", so the launch of the subscription model in the countryside is not a marketing innovation, but a "follow the trend".
The situation is not optimistic
Even if it follows the local custom, the subscription model may not help NIO gain a foothold in the European market, after all, European consumers have more choices under this model.
According to the reporter's incomplete statistics, since 2020, the subscription model has begun to be popular among major car companies, including Hyundai, Porsche, Volvo and other car companies, and Lynk & Co, which entered the European market in 2021, has already opened the road of subscription, as of September 2022, its subscribers in Europe have exceeded 150,000, and NIO is under great pressure as a late entrant.
In addition, the monthly subscription price of NIO's three models is not advantageous in the European market. According to NIO's official data, the monthly subscription price of the ET7, EL7 and ET5 of NIO's 75kWH battery pack is more than 1,000 euros in Germany, while the monthly rental price of Model Y and Volkswagen ID series on the German rental list is up to 900 euros and 500 euros respectively, which is a significant price advantage over NIO.
In this regard, NIO CEO Li Bin said after the press conference that the high subscription price is due to the premium phenomenon caused by user services, and such a price is reasonable. However, it remains to be seen whether users are willing to pay more real money for such a service.
At the same time, its popularity in the European market is not as good as Tesla and Volkswagen, which makes NIO more passive in the market competition.
Data show that from January to September this year, Tesla's registered vehicles in Germany have been close to 38,000, and the number of Volkswagen electric vehicles registered in the same period is about 32,000, as Tesla entering the German market in 2021 has a higher recognition than NIO, regardless of Volkswagen's home advantage as a local car brand in Germany.
The domestic market is left behind
Behind the accelerated European market layout is NIO's lagging behind in the domestic market.
In September this year, NIO delivered only 10,878 new vehicles, and its cumulative deliveries in the third quarter were 31,607 units, behind the current upward trend of Nezha (48,059 units) and Zero Run (35,608 units). From the end of January to 9 this year, NIO has delivered a total of 82,434 new cars, and the data is at the bottom of the five new car making forces "Wei Xiaoli", Nezha and Zero, in front of which are Nezha (111,190 vehicles), Xiaopeng (98,553 vehicles), Zero Run (87,602 vehicles), and ideal (86,627 vehicles), compared with the first place Nezha, NIO is nearly 29,000 units, almost a quarter apart, and the gap between it and Xpeng has also been pulled to 16,000 vehicles.
This is completely different from last year's pattern.
In 2021, NIO delivered 91,429 new vehicles, second only to Xiaopeng among the new forces, when Nezha delivered only 69,674 vehicles for the year, 21,755 units behind NIO, and was still in the second echelon. Nine months have passed, the situation has completely reversed, and Nezha, Zero Run, Ideal, etc. have all achieved a reversal of NIO.
As the first new car company to break through the 200,000 delivery mark, NIO's recent decline in delivery volume and delivery growth rate is the supply chain dilemma it is facing.
The clue appeared as early as March last year, when NIO stopped production for 5 days due to core shortage; In August, its deliveries again dropped sharply due to ESP chip problems, and although the ideal used ESP chips in the same month, its delivery volume was nearly double that of NIO; In April this year, due to the impact of the epidemic, it was forced to stop production due to the inability of suppliers to supply. At this year's NIO's second-quarter results meeting, Li Bin frankly said that the company's next key problems include the supply chain.
In contrast, the supply problems of the remaining two "Wei Xiaoli" are better than NIO, ideal to build its own factory in Changzhou to strengthen production capacity, while paying attention to strengthening supply chain management, up to now, the company has more than 150 supply partners and more than 1900 cooperative parts manufacturers; Xpeng ensures reserves by signing a safe supply agreement, making reasonable predictions and preparing in advance in the face of the rapidly changing supply chain situation.
NIO is losing its first-mover advantage, and the supply chain is only one of the reasons, and excessive product pricing and controversial price-performance ratio are also affecting consumer choice.
According to the data of the passenger association, the top 5 new energy cars sold from January to September this year are Hongguang MINI, BYD Qin, BYD Han, BYD Dolphin, Model 3, of which the cheapest Hongguang MINI is only 32,800 yuan, the most expensive Model 3 reaches 367,900 yuan, while NIO's sedan ET5 and ET7 have a price range of 328,000 yuan to 536,000 yuan; the top 5 new energy SUVs sold from January to September this year are BYD Song, Model Y, BYD Yuan PLUS, BYD Tang and Ian Y, the price range is 137,600 yuan to 417,900 yuan, while NIO has four SUVs, with a price range of 374,700 yuan to 643,400 yuan, which is generally higher than the current high-sales product price.
With the 100,000-300,000 car level market more and more abundant, whether it is energy or models, the choice will be higher than NIO, in the case of zero C11 and NIO's ES7, the former is a pure electric SUV priced at about 240,000, pure electric endurance is 510 kilometers, the latter is a pure electric SUV priced at about 470,000, pure electric endurance is 485 kilometers, only from the perspective of endurance, the lower price C11 is obviously more advantageous.
Can NIO, which shouts that it takes serving customers as its own responsibility, really rely on service to achieve more premiums?
Recently, NIO seems to be aware of this problem, on the 2022 NIO DAY, it released its current lowest price ET5, priced at 328,000 yuan -386,000 yuan, after choosing a battery rental service, the price of ET5 is only 258,000, which is a lower price for NIO that has been in the high-end market all year round.
At the same time, at the second quarter results meeting, Li Bin once again made it clear that NIO is currently expanding its own market segment and will launch models with a price of about 200,000 in the future. It is not difficult to see that NIO realized that if it wanted to sell its car more efficiently, the mid-market could not abandon it.
In the face of the third quarter that has ended, NIO's deliveries barely completed the guidance given at the second quarter results meeting, and the delivery of ET5 began in September, and as the new models gradually climbed, industry insiders believe that ET5 may bring a good delivery data to NIO around November this year.
The sword of gambling hangs high
In addition to the problems of product production and sales, NIO's stock price performance also affects market sentiment.
On June 27 this year, NIO's Hong Kong stock ushered in its peak market capitalization, with a total market value of HK$327.46 billion on that day, an increase of nearly HK$60.5 billion from HK$267 billion when it was listed on the Hong Kong Stock Exchange.
However, a subsequent short selling report caused NIO's share price to start to decline, and as of October 19, NIO's total market value was only about HK$156.8 billion, evaporating nearly HK$170.7 billion from its peak.
There is still a possibility of repairing the stock price, but the gambling agreement signed with the local government of Hefei has become the sword of Damocles hanging over NIO's head.
At the beginning of 2020, the local government of Hefei provided 7 billion yuan of financial support to NIO in distress and held its equity. At that time, the two signed a VAM agreement, which stipulated NIO's future revenue goals and development direction: revenue of 120 billion yuan in 2024, total revenue of 420 billion yuan from 2020 to 2025, 6 to 8 new cars listed, and listing on the science and technology innovation board by 2025. If the above agreement is not completed, NIO will repurchase the previous shares at its own expense at an annual interest rate of 8.5%.
However, from 2020 to 2021, NIO's cumulative revenue is about 52.4 billion yuan, which is only 12.5% of the target in two years, and there is still a gap of more than 360 billion yuan from 420 billion yuan.
This means that from 2022 to 2025, NIO's average annual revenue needs to reach about 90 billion yuan, and in the first half of this year, NIO's revenue was only 20.2 billion yuan.
Li Bin said in the face of the VAM agreement that during 2020 and 2021, NIO bought back part of the shares, the original value of the repurchase part was 1.5 billion yuan, and NIO has paid 7.5 billion yuan, so the VAM agreement cannot be said to be a complete failure.
When the first-mover advantage is lost and the domestic market is left behind, can overseas markets help NIO?
This article is from the International Finance News