Li Bin admitted that he said the wrong thing: so many people buy fuel vehicles for a reason

DoNews reported on December 14 that according to the Super Charging Station, at the 2023 NIO face-to-face meeting, Li Bin, CEO of NIO, answered many questions from the media, including his previous conclusions on fuel vehicles.

In December 2021, Li Bin made a remark about fuel vehicles in public, which aroused heated discussions among netizens. Li Bin said, "I don't understand at all, why do people still buy oil trucks now? What else is good about oil trucks except for smelling some steam?"

Li Bin's remarks undoubtedly put fuel vehicle users on the opposite side, which caused many netizens to complain and be dissatisfied. Some people even threatened that "because one person doesn't buy a car", Li Bin said that it was too difficult for him.

Regarding his remarks 2 years ago, Li Bin said: "First of all, I want to admit that I said the wrong thing, so many people buy fuel vehicles, there is a reason, I said it too early, maybe it will be better in another 10 or 5 years." I said this sentence must be reviewed, and it may be right to say a word at an inappropriate time, but I said it five or six years earlier, so I said it less. ”

The following is the full text of Li Bin's Q&A (with deletions):

Media: Is battery swapping a moat for NIO?

Li Bin: That must be, just like Amazon Cloud and Alibaba Cloud are the moats of these two, battery swapping is NIO's layout in terms of energy cloud, and the logic is very consistent.

Three characteristics: 1. The network effect is very strong and requires scale; 2. There is a long construction period, and Amazon's cloud service has been under construction for 20 years now;

Amazon's fixed assets are $260 billion, and Google's plant and equipment is $140 billion. My 100,000 battery swap stations cost less than 100,000 gas stations.

3. Use it yourself. If you don't use it yourself, it's hard to prove it to others, and it's hard to make the interface very good.

If you want to change the battery and can't figure it out, just look at what the world's leading technology companies and China's leading technology companies are doing. Of course, battery swapping is NIO's moat, and with the expansion of this scale and the addition of peers, the more we sell, our moat will only get deeper and deeper. What we do is more similar to what Tesla did in North America, so if we can't beat it, we join him.

Media: Will the opening of the battery swap network of the second brand affect the user experience of NIO car owners?

Li Bin: Battery swapping is a distributed network, building a battery swap station is equivalent to buying some servers, we are a large network, but it can operate flexibly.

Some of them are equivalent to private clouds, and some of them are shared clouds, which is mainly an operational issue, which is a technical theory. The company I admire the most in the world is WMware, they do virtual servers, and we have to work on them a lot through technological breakthroughs.

Media: Why will the models of the cooperative battery swap brands only be available in 2025?

Li Bin: It takes time for other brands to develop battery-swapped models, and the chassis needs to be adapted.

Media: Is battery swapping risky for other brands?

Li Bin: There is no loss to other brands, they don't need to build battery swap stations, the development of chassis only needs one or two million, sell more than a thousand cars and come back, I even call on all brands to see which cars can be replaced, I now not only hope that NIO sells well, I also hope that other brands cooperate with battery swap cars also sell well.

Media: Is battery swapping a burden for NIO?

Li Bin: In many cases, the cost of free energy services is mainly due to the high cost of electricity, not the expensive site, the cost of a battery swap station in NIO is three or four hundred thousand yuan a year, and I can also earn some money for energy storage, battery swapping is not a burden for NIO, if 60% of the cars in China use my battery swap network, I can wake up with a smile when I sleep at night. Evaluating NIO depends on how long you take to evaluate it.

Media: Why is it open to battery swapping now, is it because of financial constraints?

Li Bin: Definitely not, because our next generation is an 800V platform, and we need partners to develop it as early as possible, so it just happened to be this Timing.

Media: Plans for next year?

Li Bin: Next year's plan is to continue to build battery swap stations and continue to expand other brands, and I just signed a new agreement in the morning.

Media: Why did you bring in your partners?

Li Bin: Mainly to reduce costs, for the entire industry to reduce costs, last year NIO users 75 degrees and 100 degrees of option ratio was 90:10, now it is 92:8, because everyone found that there is no need to simply use battery life to compare.

Just like the NIO Phone has better battery life than the iPhone, can I say that the NIO Phone is far ahead? I'm embarrassed myself. We change the battery in order to save costs for consumers, and it is not easy for anyone to get the money.

We are not simply reducing costs, but saving resources. We can save 17% of our resources ourselves. Endurance is not a technical issue, it is a matter of trade-offs. I hope to pass on what is real technology to the industry, which is a great merit.

Media: Can you make money by swapping batteries?

Li Bin: I can definitely make money, but I won't be able to make money next year.

Media: What kind of companies are welcome to join NIO for battery swapping?

Li Bin: All kinds of enterprises are welcome.

Media: What are the characteristics of the open battery pack?

Li Bin: We have two types of next-generation battery packs, one is for the high-end market, and of course we can also open up. One is for the mass market, we call it the supercharge quick-change battery pack, which we have repeatedly polished and verified for two years, and is the standard of the battery pack we mainly share, because the range of products covered is relatively large.

After that, we will also have an entry-level battery pack. You can understand that NIO has three battery standards open to the industry. Each type of package has a standard battery life, a long battery life, and an ultra-long battery life. Meet 90%, 9%, and 1% of product scenarios, respectively.

Media: How open are the technical standards for battery swapping?

Li Bin: It's completely open.

Media: Will a third party be introduced in the construction of a battery swap station?

Li Bin: Recently, some companies have come to invest in and join the NIO battery swap station system.

Media: How much will the battery swap station be built next year?

李斌：NIO Day 公布。

Media: How to talk down with the partners?

Li Bin: You will find that those who have cooperated have done battery swapping on their own, and they understand the importance of this scale effect. You can imagine that when you are faced with the fact that 60% of Chinese consumers are unable to install charging piles, are you engaged in range extension? or gasoline vehicles? Obviously, you will choose to change the battery, so do you start from scratch?

Media: There are no high-end brands, only high-end products?

Li Bin: I completely agree that the product definition should be done well, but NIO is on the road to a luxury brand.

Media: Why make a flagship model?

Li Bin: We have a second brand to do the mass-market models for families, and only by leading technology can we create a high-end brand, and this is also the case in the era of oil vehicles, and we will continue to build a leading technology in the brand building of NIO. This car volume will not be as high as everyone expects, and the car that everyone expects to walk is behind.

Media: Will you consider abolishing the subscription system for assisted driving?

Li Bin: No, the subscription system is still more conducive to users, everyone can not pay if they are not easy to use, this is the real test of technical ability standards, real technical strength of enterprises, the way of subscription is in line with the interests of users.

Media: Will there be a five-seater ES8?

Li Bin: Without this plan, it's good to buy an ES7.

Media: Do MPVs have them?

Li Bin: The MPV project was established, but not so quickly. After doing it, we simply don't worry, we will strike later.

Media: Is there anything you can reveal about the ET7 and ES7 next-generation?

Li Bin: It's all in the process of optimization.

Media: What are the highlights of the flagship model?

Li Bin: It is definitely the world's most comprehensive leading car, I can't say that it is far ahead, but the comprehensive leading, all your imagination for smart electric vehicles is available in this car.

Media: When will the intelligent driving ability be surpassed?

Li Bin: We have overtaken, our technical route is to lay the foundation first, and then out of the ground, we are now and the time to go out of the ground, our technical route is to start from the bottom.

Media: What do you think of Xiaomi cars?

Li Bin: It's not that you haven't come yet, let's take a look again.

Media: How does NIO Phone sell?

Li Bin: I think it will take 3 years to see if this is right, I think we have to wait until the third generation, and when the cars of Huawei, Xiaomi, and Apple are sold more and more, we will know that this thing is right. The natural flow of information between mobile phones and cars is in high demand.

Media: NIO's positioning?

Li Bin: We only do high-end, do not fight price wars, ensure that the service is leading, in line with the expectations of users, we have always done this, nothing has changed. It's just that today's communication environment, for a company with strong comprehensive capabilities like Weilai, is the most at a loss, Weilai is the biggest victim of the duality, our charging service has served so many people, but just because we do battery replacement, everyone seems to selectively ignore it. Our service is okay, but everyone puts labels, as if the product is not good and the technology is backward, where does this statement come from? You can't just say that I am not good at Chinese because I am good at math.

Media: What do you think about the overseas strategy?

Li Bin: We are prepared for the long-term nature of this matter, and the short-term effect on sales is not as good as that of a medium-sized city in China, but these experiences are very important. In addition, we sell high-end brands, and it doesn't make much sense to go to too many places, because the area we are in now accounts for 90% of the sales of luxury brands.

Media: Is there an expectation of 20,000 monthly sales?

Li Bin: Our actual sales situation is not far from our target, but we also see the strategy of improvement, and as we improve, the sales volume will also increase naturally.

Media: The average sales price of NIO is declining, the purpose of launching the flagship?

Li Bin: Our average price will be higher and higher, don't expect to buy NIO that is cheaper than ET5 and ET5T, our judgment is not to go to the range of 200,000.

Media: What is NIO's sales after that?

Li Bin: From July and August to the present, NIO's net lock orders have continued to grow every month.

Media: How to sell a car?

Li Bin: When stepping on the ground, see if each link can be improved by 0.5% or 0.1% to improve the system capacity.

2021 was the best day for NIO, with a gross profit margin of more than 20% and positive cash flow because there were no new cars at that time. The old new car will fight itself, our current car is very leading, all aspects are still the ceiling, after our software and energy network are better, the experience will be better.

My judgment is that 2024 and 2-25 will be the explosion of the high-end pure electric market. After the price of lithium comes down, do you buy a range extender, buy DM, or buy forty or fifty kilowatt-hours of electricity for the same money? I think the answer is obvious. High-end pure electric users are relatively less sensitive to cost, but the consensus will change.

In Shanghai, we are more than 300,000, and our sales volume is more than other brands, regardless of the form of power. And our lead is getting bigger and bigger. This is the trend, once the infrastructure is established and the brand value is established, the adoption rate will be very fast. Recently, everyone has been talking about ultra-fast charging, and I am the happiest, because I am engaged in pure electricity, and you can't change the battery fast for a few Cs, and I can also upgrade.

Media: The new model is said to be a million-dollar luxury car?

Li Bin: We are a million-dollar luxury car, and we won't price millions, we think it's too high.

Media: What is NIO's current sales capacity?

Li Bin: The industry generally believes that sales consultants will become proficient in about 6 months, and we estimate that by the second quarter of next year, the sales ability will be greatly improved.

Media: What is the progress of the second brand?

Li Bin: We decided to wait for a while, and when everyone is exhausted, we will lift the table again, otherwise you go in now, everyone will reduce the price, and there will be no splash.

Media: Second Brand Advantage?

Li Bin: The family market is easier to define, and we don't push too many cars, we only have 3 cars in the life cycle in our planning.

Media: Sales target?

Li Bin: After the sales volume in the first quarter, we hope to take 20,000 monthly sales as a baseline, which we think is a reasonable goal.

Media: Why was the Series 9 released so early?

Li Bin: Fortunately, ET7 was released so early, and it sold very well.

Media: What are the expectations for next year?

Li Bin: We must survive first, to ensure that our product technology is leading, to ensure the sales and service network, as well as the research and development of the three brands.

Media: What are the lessons learned this year?

Li Bin: Our biggest review this year is the late sales ability, if we start to follow up in February, in fact, a lot of orders will not be lost, this is our biggest lesson this year.

Media: What do you think of the speed at which NIO spends money?

Li Bin: We spent 10.8 billion on R&D last year, 30-4 billion R&D per month this year, we will continue this R&D range, survival is not the goal, development is the goal, participation in competition is not the goal, winning is the goal, we do high-end brands, if we do not ensure the intensity of an investment, we will not survive. Of course, reducing costs and increasing efficiency is an eternal topic, and we can save 5% of the cost every year, which is a lot of money.

Media: How do you view NIO's narrowing losses?

Li Bin: We now feel that we should spend the money that should be spent, and we should resolutely save the money that should not be spent.

Media: What does it mean that NIO did not do anything that had a positive effect on gross profit in the past 3 years?

Li Bin: We will definitely engage in R&D for gross profit, we will push back the exchange of fixed assets for gross profit, and it is a sure thing for scale and management to exchange gross profit.

Media: At what point has efficiency been achieved?

Li Bin: I have done everything I said in my letter some time ago, but recently some people say that we are laying off employees, but that is not happening, but continuous efficiency and organizational adjustment are definitely being done. We had a two-year economic plan for one sector at a time.

Media: What do you think of Xpeng's efficiency improvement?

Li Bin: Congratulations to Xiaopeng.

Media: How to reduce costs and increase efficiency?

Li Bin: NIO will not do that kind of thing of opening and closing, and will not do things that cut one by one.

Media: What does NIO continue to invest in?

Li Bin: According to BMW's 760 stores, although we have 400 stores, we can put a quarter of BMW's cars, and our capabilities in this area still need to be improved.

Media: Loose R&D budget?

Li Bin: The budget control of our R&D is still very tight, we can launch five cars in four months, we do do more than others, which is also the basis for us to stay ahead of the curve, and we think this is meaningful in the long run.

Media: What indicators do you focus on at the operational level?

Li Bin: We will look at the ROI in a very detailed way, to look at the ROI.

Media: What to expect for the new year?

Li Bin: Sell cars well.

Media: NIO is laying off employees?

Li Bin: There is no such thing.

Media: Is NIO's strategy good or bad?

Li Bin: NIO will make a bad strategy in good times and a good strategy in bad times. We used to have a 5-year strategy discussion, but this year we changed it to a 2-year business strategy. What we don't do well is that we don't estimate the risk enough.

Media: How can the brand continue to grow?

Li Bin: I think we should insist on the improvement of the system in terms of products, communities and services.

Media: Why launch a new brand when you're losing money?

Li Bin: We and Tesla are taking two paths, Model S and X sold 120,000 a year at the best time, but now they only sell 12,000 a quarter, and the price difference between Model S and X and Model 3 and Y is very large, and it just so happens that NIO's products are in this range.

The philosophy we chose was similar, but the roads were different, we chose to use another brand to do the Model 3, Y things, I watched the Ford biography and "My Years at General Motors" during this time, and it is more in line with consumer common sense to serve different consumers with multiple brands.

We hope that NIO can have a share in the high-end market, and the second brand can serve more users. Why is there so much sharing now, because there is more sharing in the software, and the reuse of software in terms of intelligence brings a lot of intensification, and I don't need to recruit so many intelligent people for the second brand. In the past, it was too difficult to share the engine.

Media: Why is NIO so negative?

Li Bin: I don't understand, let's go to hack others in the future, there are so many people who can be hacked, don't say much, it's all tears, and there is no traffic on the front. It's okay to do your job.

Media: What is the difference between NIO and other new EV manufacturers?

Li Bin: We have grown by 33% this year, which is still about the same as the 39% of the broader market, but we have many peers who are doing very well, such as BYD, let's continue to work hard.

Media: What do you regret in the past?

Li Bin: If we can do it all over again, the definition of many of our products is not accurate and the planning is not meticulous, so that we sell a lot of cars less, there must be thousands of units, this is to pay the tuition, and our next-generation models will be more clear about who to sell to.

Media: Worried about Flag being turned over and slapped in the face?

Li Bin: If you slap your face, who can guarantee that what you think is good? But I thought so at the time, and I think so now, and I can only guarantee that I thought so at that time.

Media: Is NIO's second brand really called Alps?

Li Bin: It's really not called this name, when the project was first established, everyone said that it would be the highest sales of the public, or it should be called Everest, but I said it was too cold, so it was called Alpine. We are now internally codenamed Dabie Mountain, and I asked them to go to the fourth and fifth tier cities to understand users, and the users in Shanghai are different from Anqing, and Taihu County in Anqing.

Media: How do you see the company in the long term and short term?

Li Bin: If a company only talks about Vision, and if it doesn't talk about Action, it is a hooligan, and in the future, we don't say that we are a long-term company, but that we are a company that attaches importance to short-term execution, and is a company with execution.

Media: Is the scale and quantity of NIO's products too large?

Li Bin: We have always said that high-end brands have more pursuit of product design, more design and personalization are more in line with everyone's needs, which brings us the benefit of attracting a lot of people who attract NIO, and we now only have 8 cars, and Mercedes-Benz BMW now has more than 50 cars The scale is still small, and the things that our software can define, such as our battery pack is universal, there are two sets of motors, and software and intelligence are one, and we have a sense of what can improve efficiency. When we get to the second market, we change the way we play, and we define the car according to the size of the family.

Media: Will NIO 2023 be harder than 2019?

Li Bin: That's definitely not, we now know where the next six months' wages are. And we now have such a large user base, which can only be said to be more stressful.

Media: Is there a plan for the right drive?

Li Bin: Actually, we have it, but if the market doesn't enter, we don't need to produce, which is not our current high priority.

Media: Is there a plan for North America?

Li Bin: We started planning in 2017, and our colleagues who did the planning had gray hair, but we had to consider the company's operation and geopolitical risks.

Media: Can you tell us about your plans to go to sea?

Li Bin: The three markets of China, the United States and Europe account for 90% of the sales of luxury brands, and we will definitely go back to the UAE next year.

Media: What are the expectations for the Alps?

Li Bin: I think in this market, there may be products with monthly sales of 5 or 60,000 yuan, and the Model Y has proven this, so we won't make too many cars in this range, we will be based on the family market and be efficiency-oriented.

Media: How do you see the market next year?

Next year and the year after will be very miserable, the brand of NIO will not do price for volume, I told my market colleagues to give up illusions about the tragic degree of the market, and to give up illusions about the strategy of exchanging price for volume.

Media: The relationship with JAC is over?

Li Bin: It won't end, we still have a Jianglai, we can't say that Jianglai has no future.

Media: When will the Alps be delivered?

Li Bin: Let's take a look at the market situation first, and we will play the cards after everyone's price, but it will not be too late.

Media: Do you still want to buy a fuel car?

Li Bin: First of all, I want to admit that I said the wrong thing, so many people buy fuel vehicles, there is a reason, I said that too early, maybe it will be better in another 10 or 5 years. I said this sentence must be reviewed, and it may be right to say a word at an inappropriate time, but I said it five or six years earlier, so I said it less. I later read a lot of comments saying, "Because one person doesn't buy a car," and it was so hard for me.

Media: What do you think about range extension?

Li Bin: I won't comment on the range extension, it's selling very well now, there must be a reason. For those who can install charging piles at home and often have to go far away, it is very meaningful, if you don't have a charging pile, then it's a little harder. Of course, pure electric vehicles also sell well, Tesla, BYD, and the best selling is still oil cars, 60% of which are oil cars.

Media: How is the third brand progressing?

Li Bin: Now it has done a good job, and it is already making molds.

Media: Will the launch of the flagship model affect the sales of existing vehicles?

Li Bin: You can think of the new flagship as a sequel to NIO In, and we are demonstrating the capabilities of the previously announced product technology after it is implemented.

Media: Is the new flagship to boost sales or boost the brand?

Li Bin: That's definitely for the market, this car is for business, we are now ES8, ET7 is trying to conquer this market segment, otherwise our profits, the ceiling of the brand will be limited, this is BBA's current base, but also China's car brands have never reached the height.

Mercedes-Benz S, BMW 7 Series, Porsche Panamera are the real cornerstones of these brands, we must resolutely enter the executive flagship market, different times have different executive flagship needs, but it must be a technical flagship, we believe this car can represent the demand of this range.

The market in this range is 100,000 units per year, but the gross profit of selling an S is dozens of times that of the A-class, and we will enter this market very resolutely. Also, is there any high-end brand that hits the family? There's a reason for that. Every year, when we have a second brand, the way NIO plays is different.

Media: Is NIO an anti-marginal benefit?

Li Bin: That's definitely not, but we reflect that compared with our plan at the beginning of last year, we spent 15 billion more, and the specific reason will not be said, but there is nothing to complain about in this matter, that is, to move forward, we generally think that it is very important to maintain concentration, and to maintain the resource margin is something to do.

Media: What do you think of the NIOPhone business?