Can Ledao become Li Bin's first hit? NIO resources are fully supported, and the monthly sales cannot be less than 10,000 units

High beams

2024-05-17 11:14Published on the official account of Beijing Tencent Automobile's "High Beam" column

Tencent Auto "High Beam" Author Guo Yifei

As night falls, at the entrance of the West Bund Dome Art Center on the banks of the Huangpu River in Shanghai, Ledao employees in Dawn Orange T-shirts wave their hands to welcome everyone who attends. Amid the cheerful music, coffee, snacks, and sandwiches are served everywhere, and the photos flashing on the big screen in the infield are all family photos, not a single dog.

"It is worthy of being a person from Disney, Weilai's temperament is slightly serious, and Ledao's press conference is like a family party, and the atmosphere is so joyful." A NIO employee who attended the meeting lamented Tencent Auto's "High Beam".

Ai Tiecheng, who runs the Ledao brand, was previously a layman in the car door. He has long been engaged in brand management in foreign companies, and as a former colleague of Qin Lihong, president of NIO, at Procter & Gamble, he is called "the main contributor to the construction of Shanghai Disneyland". In 2021, Ai Tiecheng was recruited by Li Bin Xiangzhong to take charge of NIO's second brand, Ledao Automobile.

An employee of Ledao commented on Tencent Auto's "High Beam" that although he was a layman, Ai is very smart, not only at the brand market level, but also at the research and development level, he has understood a lot in a short period of time, "the work is very clear, the key people are very positive, and the group of people he brings are considered to be working."

Brewed 10 years ago, preparations were started 3 years ago, and on May 15, NIO chose the day of International Families to officially launch the Ledao brand.

On that day, in addition to the management team, Li Bin's wife Wang Yizhi, the couple has three children, and the company also happens to have three brands of NIO, Ledao, and the project code name "Firefly".

At the media conference on the second day, Li Bin explained that NIO cuts into business and personalized performance needs, taking into account families, from ET9 to ET7 executive version, it is in this vein, and will increasingly emphasize business attributes; Ledao is aimed at the mainstream family market; The third brand is the entry-level level, but it does not mean that it is a cheap car of 70,000 or 80,000 yuan, and there will not be only a few gross profit margins, just like mini is to BMW, Smart is to Mercedes-Benz.

NIO was established less than 10 years ago, and among the new car-making forces, Li Bin was the first to take a multi-brand strategy. Capturing the minds of different audiences with a richer product portfolio may seem like a good plan, but it is not easy to implement in reality. At present, the main brand of Weilai has not yet come out of the quagmire of loss, and the battery swap mode still needs to be verified by more brands in the market.

"Whether the Ledao brand can become popular is a key step for NIO to survive." Zhu Kai, general manager of Jielan Road, an automobile consulting agency, told Tencent Auto's "High Beam" that in the past, every new car in Weilai, the outside world had high hopes and called it "the last straw", but now the cards have been out, and the sales volume of 134 per month is relatively stable, but it is difficult to pull it significantly, and there is no way to turn this sales into a profit.

Li Bin and Weilai are waiting for a hit, will Ledao be?

Benchmarking against Tesla's Model Y? Monthly sales of 15,000 units are considered explosive

Explosive models are the most obvious weather vane for starting the brand and achieving sales, just like Xiaomi SU7, ZEEKR 001, Huawei Wenjie M7, Denza D9, etc.

Among the 8 products of the NIO brand under the Chehai strategy, the closest to a hit is the ET5, which was launched at the end of 2021. During the pre-sale, the APP collapsed due to too many orders, but the epidemic caused a shortage of supply chains, and the listing to delivery was extended to 9 months, which led to a large loss of orders.

The NIO brand has always adhered to the price bottom line of 300,000 yuan, and there will be no new products on the market in 2024, and it is difficult to continue to break through the monthly sales mark of 20,000 yuan based on the current product matrix. The Ledao brand, which focuses on 200,000 yuan and the mainstream family market, has become the hope.

To this end, the first car, the Ledao L60, is fully equipped and directly benchmarked against the Model Y, which is the world's best-selling product, with 456,300 vehicles sold in China alone in 2023.

According to the product information disclosed at the press conference, when NIO's products were still at 400V, Ledao L60 took the lead in becoming the first mass production model of NIO's third-generation technology platform, directly upgraded to 900V high voltage. In terms of range, the lowest version of the CLTC has a range threshold of just 1km more than the Model Y rear-wheel drive version, reaching 555km, in addition to two range versions of 730km and 1000+km.

In terms of energy consumption, it is also not inferior to Tesla, which has the lowest energy consumption of a mid-size SUV in the industry, which is 10% lower than that of the Model Y, reaching 12.1kWh. In addition, in order to reduce costs, it is not equipped with lidar, and uses a pure vision solution to achieve high-speed and urban NOA.

In terms of price, the pre-sale price of the Ledao L60 starts at 219,900 yuan, which is 30,000 yuan cheaper than the lowest version of the Model Y. It is worth noting that under the BaaS (battery rental) model, the price of a 75kWh battery will be reduced by 70,000 yuan, and the price of a 60kWh battery may be reduced by 60,000 yuan. According to this calculation, the price of Ledao L60 entry-level products may be reduced to about 160,000 yuan.

In this regard, Li Bin responded to Tencent Automobile's "High Beam" and said that 219,900 yuan is the price of batteries, and the market also knows that we are 60 kWh, and like Tesla, the price of subtracting the battery will definitely enter a range of 1, but it will not overlap with the third brand.

After the Ledao brand press conference, at 12 o'clock in the evening, Li Bin convened the management team for a review. In terms of order volume, he revealed, "24 hours have not arrived, the order has been two to three times higher than the original expectation, it should be far beyond expectations, the order can be refunded now, and the final delivery shall prevail." Li Bin's previous expectation was that the monthly sales target of the three Ledao brand cars was 50,000 units.

Zhu Kai believes that the market capacity of the Ledao brand is much larger than that of the NIO brand, but the competition is also more intense. From the point of view of Ledao's first car L60 products, SUVs of this size are the easiest mainstream models to sell, "If you want to become a market hit, you should at least reach 70%-80% of the sales of the ideal L6 or half of the Model Y, almost 15,000 units per month, and the possibility of a popular model is very low if it is less than 10,000 units."

An insider of NIO admitted to Tencent Auto's "High Beam" that although Ledao has always claimed to be benchmarking Model Y, it is still not easy to compete with it, after all, Tesla's brand power is there, "but Ledao should grab the market share of Tesla's other competing products."

In the price range of 20-300,000 yuan, only in the new energy SUV product series, there are competing products such as Zhiji LS6, Xpeng G6, and Ideal L6.

Fully sharing NIO resources, Ledao wants to "make money to support the family"

"It's not about a decisive battle, this one likes to use a war as a metaphor." Li Bin categorically denied the external evaluation of the final battle, but he also admitted that Ledao is undoubtedly very important to Weilai, we have always said that the marathon on the muddy road, it is definitely not possible to run a marathon in a 10,000-meter way, and the road in the future is very, very long.

Increasing the volume of Ledao is the most urgent task at present, especially in the context of the fact that it is difficult to turn losses into profits by relying on the NIO brand alone.

In 2023, NIO has received two key investments from CYVN, an Abu Dhabi investment institution, totaling US$3.3 billion, to temporarily alleviate cash flow pressure, but at the cost of Li Bin losing the company's position as the largest single shareholder, CYVN's shareholding ratio has risen to 20.1%, but with super voting rights, Li Bin is still the actual controller of NIO.

From the perspective of financial pressure, as of the end of 2023, the company's cash and cash equivalents were 57.3 billion yuan, and the net loss in the same period was 20.72 billion yuan, a year-on-year increase of 43.5%.

Li Bin admitted that Ledao's listing, whether it is the allocation of R&D fixed costs, the reduction of supply chain and manufacturing costs, has a lot of benefits, helping the whole company to increase profits, "like our AD autonomous driving, two brands can also do it, it is impossible to double the team, only need to add a small number of delivery teams", "Quantity is very important, without the support of quantity, many things cannot be done". Previously, in the earnings conference in March this year, he said that the growth of new brands for the mass market is the company's top priority in 2024.

Li Bin said that the pre-sale price of 219,900 yuan is still a good gross profit, we will not sell one and lose one, Ledao also has to earn money to support his family, and now it is time to realize it.

Since 2021, the Ledao brand has started preparations, and since then, NIO's overall R&D expenses have begun to increase sharply. According to the financial report, the R&D investment in 2021 will be 4.592 billion yuan, and in the next two years, it will jump directly to 10.836 billion yuan and 13.431 billion yuan. The above-mentioned NIO insider said that Ledao was established from the beginning, and its R&D team and NIO are completely independent, two teams.

After years of blood transfusion, in order to "earn money to support the family" as soon as possible, Ledao will fully share the resources of NIO.

For example, in terms of energy replenishment, Ledao will support NIO's third- and fourth-generation battery swap stations, which will have 1,000 battery swap stations at birth; In terms of channels, Ledao's delivery will be fully connected to the service network resources of the NIO brand, and the after-sales service will be shared with NIO, with 333 service centers in May; In terms of production, it will also be located at NIO's second advanced manufacturing base in Hefei, which is also the production plant for NIO's ET5, ES8 and other models.

However, in the future, Ledao's sales network still needs to be invested, but efficiency is paramount. According to the plan, it will not have NIO House, but it will still adopt a direct sales model, and before the listing in September, "at least 100 stores will maintain the ability to jump in place", but the overall scale has not been disclosed.

"The return on investment efficiency of the Ledao brand is better, and the accounting cycle should be short, such as investing in 2 stores first, and accounting after 3 months to see if to add new stores. NIO is allowed to raise more high-end brands, and there are some advances. Qin Lihong told Tencent Auto "High Beam".

In his view, dealing with the relationship between many brands, there is no doubt that it is an important proposition, the core is to be clear and profound enough for brand differentiation, the recent automobile market is more volatile, we are talking about the comparison between cars, especially the comparison of physical conditions, the spiritual temperament and rights and interests system between different brands will still be different.

"Rechargeable, exchangeable and upgradeable" is a unique model created by NIO. However, in the NIO APP community, many users who perceive backstabbing ask: "After a large number of Ledao or other sharing influx, the exclusive battery swap resources of NIO car owners will become less and less, until they are leveled, how to ensure the interests of NIO car owners?" ”

In this regard, Li Bin promised that as a high-end brand, the exclusive service of NIO car owners must not be discounted. He said that Ledao users also have a climbing process, after the number of users is more, we are very easy to increase the service infrastructure, the construction of battery swap stations is much easier than gas stations, today there are only more than 2,000 stations, this year will be distributed 1,000, and then the battery swap alliance will join more, I hope that in the near future it can break through 10,000 and support 10 million holdings.

At present, NIO has established more than 6 battery swap alliances, including GAC, Changan Automobile, Geely Holdings, Jiangqi Group, Chery Automobile, Lotus, etc. However, it will still take two or three years for this shared battery swap network to be truly operational, which means that NIO still needs to invest financially.

Li Bin told Tencent Auto "High Beam" that the investment in the battery swap station is currently within the company's financial acceptance range, we are two years ahead of the real order demand, and an average of 60 orders for a battery swap station will reach breakeven, and we are now more than 30 orders.

At present, the right to free battery replacement for early NIO owners is the bulk of the financial investment. In 2019, NIO launched an unlimited lifetime free battery swap service, and with the expansion of the user scale, the battery swap rights and interests have been adjusted several times, and finally canceled in 2023, but the rights and interests of old car owners are still retained, with a scale of up to 300,000 users.

Tencent Auto's "High Beam" learned that NIO's current annual electricity cost is as high as more than one billion yuan, and each battery swap station still has a fixed depreciation amortization cost of hundreds of thousands of yuan.

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