Li Bin of NIO: The personnel adjustment has ended, and Alps will take the opportunity to "flip the table"

"There is not enough internal estimation of external risks and risks to the company's operations. On December 14, at the 2023 media face-to-face event, Li Bin, chairman and CEO of NIO, said that if risks can be accurately estimated, then more measures, including sales capacity improvement and organizational adjustment, will be carried out at an earlier time.

In early November, Li Bin issued an internal letter saying that NIO had made certain achievements, but in order to qualify for the finals, it must further improve the efficiency of execution and ensure that there are sufficient resources for key businesses. The internal letter said that it would reduce the number of jobs by 10%, and also said that it would merge the departments and positions that were duplicated construction, eliminate inefficient positions, and postpone and reduce the investment in projects that could not improve the company's financial performance for three years.

Recently, there was news that NIO will further expand the scale of layoffs, and at this communication meeting, Li Bin said that the personnel adjustment has ended, and NIO has indeed merged some departments with duplicate functions, but expanding the scale of layoffs is fake news. In terms of intelligence and sales, NIO will still maintain its existing team or expand its team size.

In addition to the response to layoffs and adjustments, Li Bin responded to more than 140 questions about technology, market, battery swap, and enterprise operation within two hours at this communication meeting.

About marketing and sales

In 2024, the NIO brand will not launch a new model, and its flagship ET9 product planned to be exhibited at Nioday may not be officially launched until 2025, and the existing NT2 platform will only be available in a facelifted version. In the face of more fierce market competition, it is difficult for the facelift to bring qualitative changes to the competitiveness of NIO's existing product matrix.

However, Li Bin believes that the products of NIO's NT2 platform can maintain the level of "ceiling" in terms of intelligence and computing power at present and in the next few years, and at the same time, thanks to factors such as falling lithium prices and improved energy replenishment infrastructure, the high-end pure electric new energy vehicle market will usher in an inflection point of explosive growth in the next two years.

Although there are no new products to be launched, NIO will focus on converting sales into sales next year. Li Bin said that the biggest mistake this year was that it did not start to enhance sales capacity in February, resulting in a lot of orders lost in June ~ July because of the lack of timely follow-up.

"NIO currently has about 5,700 sales consultants, of which more than 3,000 are newly hired, and it will take a certain amount of time to form sales capabilities, and it will take about 6 months for a salesperson to mature. Li Bin said that in the second quarter of next year, the sales capacity that NIO has recently vigorously built will gradually mature, and the monthly sales are expected to enter the upward channel based on 20,000 units, and continue to maintain a market share of about 40% in the high-end electric vehicle market.

In addition, NIO once again reiterated that it will not exchange price for volume, ET5 and ET5T will be the products with the lowest brand positioning of NIO, NIO will attack the commercial market with ES8, ET7 and new flagship models, and ET5, ET5T and other products will focus more on the personalized market. The family-oriented mainstream market will be handed over to NIO's second brand, the Alps project.

It is reported that the Alpine project will focus on families and value for money. In the absence of new products for the NIO brand, the Alps project is believed to be one of the pillars of NIO's sales growth in 2024, and many industry analysts believe that the Alps project should enter the market as soon as possible to help NIO gain new increments in the mass consumer market when the sales volume of the NIO brand has not been able to achieve a breakthrough for a long time. Previously, a NIO insider told reporters that the Alpine project will be officially launched in the first half of next year.

At present, the first prototype of Alps has rolled off the assembly line and is close to mass production, and it is estimated that there will be only three models in the entire life cycle of the Alps project, and the monthly sales of a single model are expected to be more than 50,000 units. In addition, the products of NIO's third brand Firefly project have entered the trial production stage.

At the communication meeting, Li Bin said that the Alps project will continue to adhere to direct sales and increase the layout in the fourth and fifth tier cities, but the second brand will not rush to enter the market, and NIO will continue to pay attention to the trend of the market, in order to become a "table-lifter" when the Alps project enters the market.

More partners will be welcomed for battery swapping

In the past month, NIO has continuously reached cooperation with Geely and Changan in the field of battery swapping. At present, NIO has set up a special working group to assist partners in the development of battery-swapped models. Li Bin said that the cost of changing batteries for other models according to NIO's standards is not high, and the minimum chassis transformation only needs 10 million ~ 20 million yuan, "selling 1,000 more cars can pay off."

Li Bin said that before the communication meeting, NIO had just signed a battery swap cooperation agreement, and the circle of friends for battery swapping was further expanded.

It is reported that NIO will launch a new 800V flash charging and quick-swap battery pack, which will be supplied to the Alps project and partners such as Geely and Changan, and NIO's third brand Firefly will also have independent battery pack specifications. After all three brands are launched, NIO will have three battery pack specifications: high, medium and low, respectively supplying the three brands of NIO, Alps and Firefly.

Earlier, NIO had opened up charging piles to the entire industry, and NIO said that about 80% of the electricity of its charging piles was supplied to brands other than NIO, and the charging pile business itself had broken even. In terms of battery swap stations, the annual amortization and depreciation expenses of a single battery swap station are about 300,000 ~ 400,000 yuan, and a single battery swap station can achieve profitability by 60 orders a day. At present, the average number of single battery swap stations in Shanghai has reached 80, and it has achieved profitability.

According to NIO's plan, the focus of battery swap construction in 2024 will be shifted to the shared battery swap station serving Alpine projects and partner companies. NIO's battery swap system will be divided into a private network, which will be available for the NIO brand, and a shared network for NIO, Alps, and other brands. In addition, NIO has signed an agreement with a company specializing in battery swap asset investment, and the investment company will build battery swap stations to join NIO's battery swap network.

"Battery swapping is NIO's layout on the energy cloud. The construction of the cloud has three characteristics, first, the network effect is very strong, second, there must be a long construction period and capital investment, such as Amazon's cloud services have been built for 20 years, and Amazon's fixed assets have 260 billion US dollars, but the construction cost of 100,000 battery swap stations is much lower than that of 100,000 gas stations; Li Bin believes that with the expansion of the battery swap network and the addition of peers, the "moat" of the battery swap station will become deeper and deeper.

About strategy and operations

On the afternoon of November 20, Li Bin delivered an internal speech on the 9th anniversary of NIO with the theme of "Dedication, Prosperity" and answered questions from employees. In an internal speech, Li Bin announced that the five-year strategic plan will be turned into a two-year business plan, and projects that cannot help the company improve its financial performance within three years will be canceled or postponed.

Among the three "guarantees" proposed by Li Bin, in addition to ensuring the long-term investment in sales and technology, it also includes ensuring that 9 core products of 3 brands are listed on schedule. Among the new forces of car manufacturing, NIO is the only car company that has announced three sub-brands, and in addition, NIO has also laid out a number of heavy investment projects such as self-developed batteries, mobile phones, and chips.

Regarding the doubts of the outside world, Li Bin explained.

In the battery business, NIO has suspended plans to produce its own batteries. An insider told reporters that NIO had previously planned an F3 factory as a battery factory, but the plan has been suspended indefinitely. NIO will produce its own battery packs, cells, and materials in cooperation with suppliers. Li Bin said that independent R&D allows partners to manufacture, which can improve financial performance in the short term, but self-production requires a lot of investment in fixed assets, and the return cycle is longer.

In the mobile phone business, Li Bin bluntly said that he still uses the iPhone more, the main reason is that the mobile phone needs to transfer a lot of data, and he will definitely use more Weilai mobile phones in the future. However, for the project of self-developed mobile phones, its value needs to be seen after the cars of mobile phone giants such as Xiaomi and Huawei are sold more and more.

As for the layout of multiple brands, Li Bin said that unlike the era of fuel vehicles, the reuse of electric technology and intelligent software can bring more obvious cost reductions, and one of the main reasons for launching new brands is the need to realize the investment in intelligence and electrification.

It is reported that in the recent organizational structure changes of NIO, the quality, cockpit and other business units of the Alps project and the Firefly project have been merged with the NIO brand, and the smart cockpits of the previous three brands have been independently developed.

In response to the previous product definition, Li Bin reflected that the core strategy of the automotive industry is product strategy. If we could do it all over again, NIO's existing product planning and definition would include some details, and it would do a better job.

"Because of the imprecise product definition, we did lose some sales, which is also the tuition fee paid by NIO. Li Bin said that for the subsequent product definition, NIO will have a clearer understanding of who our products need to be sold to and what the real needs of users are.