In 2024, when there are "no new models", why is NIO selling better and better?

Tong Jiren car review

2024-06-05 13:19Posted on the official account of Shanghai Tong Jiren Auto Review

In May 2024, NIO delivered 20,544 vehicles in a single month, which is the second time that NIO has achieved a monthly delivery of more than 20,000 vehicles, after delivering 20,462 vehicles in a single month in July 2023.

However, compared with the order growth after the divestment of the new car battery swap rights and interests dropped by 30,000 yuan last year, this time NIO has achieved contrarian sales growth under the market price war, no new models throughout the year, and high-end pure electric vehicles are not easy to sell, and the gold content is obviously more sufficient.

Because you will find that NIO's system layout over the years is ushering in harvest, and NIO is not the "inflexible" and "incapable" NIO in some people's mouths. High-end pure electric vehicles are not easy to sell, but it does not mean that high-end pure electric vehicles cannot be sold.

How high is the gold content of NIO's sales exceeding 20,000 units?

NIO's sales exceeded 20,000 units in July last year, partly due to the accumulation of new car orders for the all-new ES6 launched at the end of May, as well as the price reduction adjustment after NIO split its service rights in mid-June.

So at the beginning of the year, there was a saying in public opinion that NIO did not have a new model this year, and it was difficult for sales to improve in the sea of competitors.

But if we look at this point of view the other way around, if a brand can only rely on new models to achieve sales growth, then won't the old cars become "annual sales", "quarterly sales" and even "monthly sales"? How sustainable is this so-called growth? Are there pros or cons to the user experience?

Looking back at the progress of Chinese automobiles in the past 30 years, the brands that are truly deeply rooted in the hearts of the people will never rely on new models to grow, and there will always be a few "classic" models that can continue to sell well.

So the argument itself is untenable.

What's more valuable is that when the entire new energy vehicle market suffered a huge impact on the sales volume and price system in the first half of this year, the premise for NIO to achieve continuous sales growth was based on the unchanged overall price system. Compared with most of its competitors, who can only achieve sales stimulation through price reductions, the strategic depth of NIO's unique system determines that there will be more ways to play.

Specifically, NIO's sales exceeded 20,000 units again, mainly due to the following reasons:

First of all, strong product strength is the foundation.

This year, NIO has several major intelligent events worth mentioning: more than 220,000 NT2.0 models have been fully pushed with global navigation assistance, including urban areas and highways, covering more than 1.4 million kilometers of roads in 726 cities across the country, the intelligent cockpit has been added to the GPT model, and the human-vehicle interaction experience has been fully upgraded, and the 4D chassis of the aerial suspension model has been upgraded, leading the chassis into the intelligent era.

These intelligent experience upgrades are the result of NIO's forward-looking pre-embedded high computing power and high-specification hardware, integrated independent development of software and hardware, and systematic thinking about the continuous upgrade of each generation of models, and are also the most difficult capabilities to be replicated by competitors. Coupled with NIO's consistent design aesthetics, performance, and quality, the strong product strength constituted by these will become more and more attractive after the hustle and bustle subsides.

Secondly, the advantages of vehicle-electricity separation are gradually amplified.

3-minute battery swapping, flexible upgrades, battery health and worry-free life, these advantages of vehicle and electricity separation are gradually being recognized by more people. The construction of more than 2,400 battery swap stations and the increasing number of car companies joining the NIO battery swap alliance highlight that the separation of vehicles and electricity is becoming an important direction for electric vehicles. "If you buy a tram, you have to buy something that can be replaced" is no longer a joke.

Moreover, the business model brought about by the separation of vehicles and electricity has become a direct driver of NIO's sales increase. In March this year, NIO released a new BaaS battery rental service, which reduced the monthly battery rental fee, and also provided limited-time benefits such as paying 4 free 1 for the monthly fee and giving free battery replacement coupons, which means that the threshold for consumers to buy NIO is greatly reduced, and they can also save purchase tax, but NIO's price system and gross profit have basically not changed. After the release of the new BaaS solution, more than 80% or even more than 90% of users in some regions have chosen BaaS to buy cars. This includes a large number of users who were originally interested in NIO, but were slightly tight on budget, and the entire user disk was reactivated.

Next, the construction of sales energy comes into play.

Since the third quarter of last year, NIO has begun to build sales capacity with a monthly sales of 20,000 units as a baseline, that is, to expand the scale of the front-line sales team and strengthen the reach and conversion rate of terminals. It takes about half a year for a sales person to generate sales. Considering the timing of the Spring Festival, the sales capacity that NIO began to build up in the third quarter of last year should be converted into sales in the second quarter of this year. Sales exceeded 20,000 units in May, which is also a testament to this.

Then, the number of high-end pure electric entrants increased, and the base expanded.

In 2024, there will be more players entering the pure electric track. In particular, Xiaomi, Huawei, two brands with national influence crossed over, Xiaomi SU7, Zhijie S7 and other pure electric new cars, attracting a large number of users who did not pay attention to new energy vehicles to enter the sales pool. And once users begin to understand electric vehicles, then NIO's product strength advantages will have more room to play.

Finally, Li Bin's personal circle-breaking effect enhances brand favorability.

From last year's live broadcast to the first test of 1,000 miles of battery life, to this year's live broadcast of urban intelligent driving, close interaction with users on short video social platforms, etc., the sincerity of Li Bin, the founder, chairman and CEO of NIO, has been recognized by netizens, and a real NIO has also been shown in front of more ordinary consumers. Driven by the traffic effect of Li Bin's live broadcast and short video, NIO's cities and stores have also achieved better results in content, interaction, and live broadcast on social platforms, and the brand's favorability has been improved, which will play an important role in the long-term sustainability of sales.

The layering of EV brands is coming

In the early stage of the development of new energy vehicles, because it is a new thing, everyone has no concept of brand grade and product evaluation system. For example, a 500,000 yuan electric car can last 500 kilometers and accelerate from zero to 100 seconds for 5 seconds, and an electric car with 150,000 yuan may also be able to achieve a range of 500 kilometers and 000 acceleration for 5 seconds.

In addition, the price system of the entire new energy vehicle market is not stable, yesterday sold more than 400,000 yuan of cars, after a few months may become more than 300,000 yuan or even more than 200,000 yuan, the first car price of a brand is more than 500,000 yuan, the second car of similar size may become only 300,000 yuan, the reference benchmark has not been formed, consumers will naturally not have a deep understanding of the brand.

However, after the replacement of fuel vehicles by new energy vehicles has become a major trend, new brand stratification will definitely be formed among new energy vehicles. The symbol of this brand stratification is that the competition of electric vehicles will return from a simple range and power to a comprehensive brand value competition similar to the era of fuel vehicles. When users choose new energy vehicles, they will also choose according to the budget, brand value, etc., and the phenomenon of skipping will gradually decrease.

This is the biggest benefit for brands that are rooted in brand building for a long time and are not affected by short-term sales fluctuations. There is no doubt that NIO is one of them.

For example, when lithium prices soared that year, many pure electric brands also went to extend the range or plug hybrid. However, after the entire supply chain system returns to normal, users will have new thoughts on choosing whether it can be oiled, electric, or rechargeable or replaced, because of the needs of the scene and careful budgeting, and will eventually return to a single energy source. However, NIO's insistence on the concept of charging, swapping and upgrading has never changed, and it has continued to invest, and it has seen results today.

For example, many brands will distinguish the intelligence level of high- and low-end models, but NIO insists that the whole system is equipped with the same top-level intelligent hardware as standard, and the whole system is equipped with dual motors as standard. When the timeline is extended, the user experience can still get exactly the same common and always new experience even after eight or ten years. You pat you, you pat these things that may not be strongly perceived when buying a car, but can get a strong sense of happiness when using the car, will one day become the unbreakable cornerstone of the brand.

Therefore, 2024 will be a watershed for high-end pure electric vehicles to begin to take off. Of course, judging from the fact that NIO occupies more than 60% of the high-end pure electric market of more than 300,000 yuan today, whether high-end pure electric vehicles can rise mainly depends on whether NIO can do it. We have reason to believe that NIO is currently in a period of smooth sales, and 20,000 units in May should be the beginning of a new steady upward trend.

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