On September 19, 2024, the first model of Ledao Automobile, L60, was officially launched, and the starting price of 149,900 yuan after BaaS (rental battery solution) can be said to be a blockbuster in the mid-size SUV market. From the product point of view, as a model focusing on the family market, it not only takes into account the interior space, intelligent cockpit, and intelligent driving, but also has the same battery swap advantages as the NIO brand, which solves the problem of battery life anxiety of pure electric vehicles.
Although Ledao officially did not release an order battle report, according to insiders, L60 has exploded, and in order to ensure smooth booking, the server has to be expanded by 5 times, which shows the popularity of this car in the terminal market, and the corresponding L60 sales will inevitably promote the upward development of the two brands of Weilai and Ledao.
The success of the first model of the new brand is not something that can be summed up in a few simple sentences, but more about NIO, Ledao and the new car L60, Li Bin, founder, chairman and CEO of NIO, and Ai Tiecheng, senior vice president of NIO and president of Ledao Automobile, were interviewed by the media.
Li Bin, founder, chairman and CEO of NIO, and Ai Tiecheng, senior vice president of NIO and president of Ledao Automobile
The following is a transcript of the interview:
Media: I would like to ask about the follow-up production capacity plan, it is said that the production capacity will be 20,000 units this year, and I would like to ask if there is any plan to continue to increase production in the future. In addition, I also want to ask for a friend who ordered a car, he ordered a purple one, does this color have any impact on the delivery? By the end of the year, will the hidden color purple be able to be delivered smoothly?
Li Bin: I said earlier at the earnings conference that the earnings report meeting is generally a little more conservative, this is a public information to investors, and we are still going all out internally to strive for more than 20,000 yuan. Now it is certain that the vehicle factory manufacturing has started double shifts, and it will gradually climb up. The main thing is the quality ramp-up of the whole supply chain, which will take some time. No car company can produce 10,000 units in the first month, not in the world, and it has an objective rule, unless you stock up on some there, and we don't want to do that.
We will definitely have no problem producing 5,000 units in October, 10,000 units in December, at least 16,000 units in January (next year), and 20,000 units in March (next year). I am also very grateful to our partners, all of us who have done our best together. This afternoon, there was a partner conference at the same venue as yesterday's press conference, and the main message was that we hope that everyone will go all out to ramp up production capacity. We have two factories in Hefei, and the production capacity of the second factory of Xinqiao NIO can support "1+2" for a month, that is, 10,000 NIO and 20,000 Ledao, and now we mainly need to do a good job in the production capacity of supply chain partners. The automotive supply chain is particularly long, and we must also manage this quality well, on the one hand, to ensure quantity, and more importantly, to ensure quality, these two must be improved together.
Special thanks, now the main pressure is production and delivery, but "good food is not afraid of late", please be a little patient, thank you!
Ai Tiecheng: I listened to me talk for two hours last night, and I would like to thank you all for your support. Continuing from what Brother Bin said, let me mention it slightly, December is the third month of our delivery, the third month is more than 10,000, Brother Bin said in January next year that it can do 16,000 vehicles, and in March next year, it will be 20,000 vehicles. In fact, the ability to deliver 20,000 vehicles per month is what I and my team have been doing since the first half of 2022, and Brother Bin has given this direction very early, and we have been working with all supply chain partners since the first half of 2022, from their planning, including their subordinate supply chains. It's not just today, we've been preparing for more than two years since we started in 2022, so I'm very confident.
The second thing is, will the choice of color affect the delivery? It will not affect, we have made an estimate of each color, which can ensure that the choices made by users can be supplied in time.
Media: In June, July and August, the market share and sales volume of more than 300,000 yuan are declining, and the sales volume has fallen year-on-year, and the share has fallen from a high point of 15% to 11.9%. With more than 300,000 yuan, NIO has stayed in this market for the longest time among all car companies in China. The same question is given to Tiecheng, will he have to rely on Ledao to "support his family" in the future? Stressed? In addition, can you tell us what is the proportion of BaaS?
Li Bin: You really know us very well. Indeed, the proportion of the high-end market of more than 300,000 in new car sales has decreased a little this year, and this is all about it, not only referring to BEVs (pure electric), I think there are several reasons:
First, it is undeniable that there is consumption pressure, and there is a large macro environmental pressure. Second, the price of many brand cars has dropped to more than 300,000, and it may also be a high-end brand, such as BMW and Audi, his brand is a high-end brand, but due to market pressure, he has reduced the price to below 300,000, and his price cannot be kept. If we only look at the price line, this does account for a very important reason, for example, the volume of Audi has not changed much, but the price stratification has changed. Third, there are a lot of very good electric vehicles in the range of more than 200,000. The competitiveness of electric vehicles in the 200,000 range is very good, such as Model Y, which forms a gravitational field at the line of 250,000. There are many very good cars on the top and bottom, such as ideal cars, including Zeekr, which are all in the range of 200,000 and 300,000, forming a new product gravitational center, which pulls down some of the 300,000 cars above.
It is a comprehensive factor, from this point of view, NIO has been able to stabilize the share of high-end pure electric vehicles of more than 300,000, and our own sales can continue to rise steadily, and our gross profit margin is gradually increasing, which is not easy. NIO's approach is that the price of batteries makes it easier for everyone to compare its brand status with trams, such as ET5 298,000, ES6 more than 300,000, and ES8 more than 500,000, which is very convenient for positioning. However, we use the price after BaaS, so that it is more convenient to make a comparison with the oil car, and when the user buys, whether it is for the tram user or the oil car user, it is more convenient and easy to make positioning.
Otherwise, it is more troublesome, such as how to position the oil car and the tram, the price of the oil car will be cheaper, but the cost of use is high; Trams, we already have a set of positioning system, and it has always been difficult for oil cars and trams to do price positioning. The tram is equivalent to paying the money saved for many years in advance, and we have the price after BaaS, which is also convenient for positioning from the perspective of gasoline car users. Therefore, the battery is convenient for the positioning of the tram user, and the battery is convenient for the positioning of the oil car user, which is the benefit of decoupling the car and the battery.
The NIO brand's numbers are more realistic, that is, the penetration rate of BaaS, which has always been above 80%, and the highest time is 90%, why? Some banks will issue a policy of order grabbing, which will have a slight impact. Long battery life and standard battery life, the proportion of standard battery life is now 97%, and long battery life is 3%. What do you mean? From this point of view, it not only saves money for users, but also saves resources for the society, and finds the best solution for long-term battery life and long-term user cost / social cost in the future, and the user is also recognized.
Two days ago, I was in Xinjiang for 40 hours, and I met 7 groups of our users, as well as users who opened the 1st generation ES8 (the original version of ES8), and they all had a lot of fun. Some rent 100 kilowatt-hours of electricity at the battery swap station, and some use 75 kilowatt-hours of electricity more exaggeratedly, which he thinks is also very good, and there is no problem. The key is infrastructure, and after the realization of charging counties and battery swapping counties, the perspective will be different.
You just talked about buying a car and renting a battery, we are also looking at public opinion, yesterday I saw that the response was really good, and the car that everyone is most concerned about now is L60, I understand very well that friends and companies have to organize a lot of words, one of which probably means: you just bought an empty shell. In short, no one should get along with money, 206,900 yuan, you are buying with batteries, because we can change the battery, we give the battery a lifetime warranty, which is equivalent to lifelong medical insurance. If you think it's good to rent a battery, you'll have 149,900 yuan. We can't "spring and autumn penmanship", we can't compare 149,900 yuan with 250,000 yuan Model Y, which is a bit nonsensical. I also hope that everyone will pay more attention to NIO's system innovation under the business model of vehicle power separation, battery rental, charging, swapping and upgrading.
Ai Tiecheng: Ledao is particularly focused, and we are committed to making high-quality family cars of about 200,000-300,000 yuan. In fact, netizens have already summarized it for us, and they all say that L60 is a hardcover large battery swap Model Y, I think the summary is very good, this is the real product positioning of Ledao L60. Our pricing and product definition are all based on "family fun, family care", and I spent nearly two hours talking about it in depth yesterday.
Media: Yesterday Ledao gave a very pleasant price, have you considered other prices before? Why did you choose the price of 206,900 in the end, and how many times did you discuss it internally? The second question is that the layout speed of Ledao in third-tier cities, including the layout speed of fourth-tier and fifth-tier cities, is very fast, and the number is more than some friends, but I went to the Zibo store some time ago and found that in the sinking market, such a new brand is still facing the problem of insufficient brand power.
Ai Tiecheng: When it comes to joint venture brands, I also mentioned a little bit when I talked about BaaS pricing yesterday. In the past, there was no doubt about the product power of smart pure electric vehicles, but when booking, there were many booking users, and we did a very in-depth study of the reservation users. Considering the L60, we also considered other cars, the Model Y ranked first, but it did not compare much with the joint venture RAV4 and Tiguan L, and we had not released the price of BaaS at that time, and the pre-sale price was 219,900 at that time.
I think we're getting into their price band by doing BaaS that users can consider, and that's the first point. The second point is that the user calculates a little more carefully, we calculate very carefully, and calculate the fuel cost of the national user to drive a fuel car according to 810-850 yuan, driving 1,500-1,600 kilometers a month, using No. 92 oil. Looking back at our battery monthly rent + founding rights. It's a 60L tank, 92 gasoline, and the price of a tank of oil. On average, a user has a tank and a half to two tanks of oil a month, and the price of our tank of oil is the monthly rent of the battery, plus the electricity bill of one or two hundred yuan per month, in fact, our monthly cost of use is lower than his, we have calculated this matter very clearly, and I believe that the people will also calculate it clearly in the future.
Third, the maintenance of Ledao can be done for three years without returning to the store, we think very well, three years without returning to the store, maybe in the third year to change the brake fluid. From the perspective of "housekeeping", the survey of third- and fourth-tier cities found that many people only drive on important occasions due to high fuel costs, and sometimes the car is reluctant to drive, and the fuel cost is indeed very expensive. The monthly rental battery of the L60 is the money for a tank of oil. Everyone should help us think about it, everyone should understand this point, we are more suitable to enter the third-tier cities, fourth-tier cities.
Li Bin: The L60 is a car that can be used in third-, fourth-, or fifth-tier cities. When I went to Xinjiang this time, there was another very interesting thing, in several counties under Kashgar, I saw a lot of Hyundai and Kia, which surprised me, so I think we all have a chance.
Back to the pricing, we've calculated it very carefully. A single must be viewed from the perspective of target market competitiveness, everyone thinks it is a 200,000 car, and we hope that it will be compared with Model Y. Of course, I admit that there is a gap between Ledao's brand competitiveness and Tesla, but from a product point of view, there is no need to be modest, speak with strength, everyone compares one by one, and then reflects it on the price, from the user's point of view, the user rate of return is higher, the user thinks that the purchase is cheaper, the thing is better, and we are 43,000 cheaper than him.
Another very important anchor point is the price of the battery after rental, just now Tie Cheng talked a lot about the comparison with a tank of oil, we finally hope that even if we do not consider the purchase tax incentives, we are more competitive than the traditional joint venture brands, traditional oil vehicles, such as Tiguan, CR-V, they are 15-200,000 range, more competitive than them.
The price of BaaS, the price after the founding version of the discount is the money of a tank of oil, which is the pricing principle, the price is better than that of CR-V, RAV4, Tiguan, even if the purchase tax discount is not considered, it is more cost-effective, the battery rent is the money of a tank of oil, the maintenance cost is cheaper, and the other experiences will be better. Product competitiveness is not a dimension, I hope that Ledao L60 is a traditional, joint venture medium-sized SUV oil car important challenger, in the 15-200,000 market, there are more than 100,000 oil car SUVs a month, we hope that the users of these oil vehicles can have the opportunity to experience the intelligent electric vehicle as soon as possible to bring a completely different upgrade experience, accelerate the transformation of oil and electricity This is the mission of Ledao L60.
Media: Ledao will share the battery swap station with NIO, will this battery swap station resource exacerbate the tension and affect the experience of NIO? NIO's service and experience in the new forces have always had a very good reputation, will it affect such a foundation?
Li Bin: There's no need to worry about this at all. Let me give you an example, take the mobile phone that everyone is using, is the current traffic and communication speed much stronger than before, not because there are more mobile phones. But if there is any problem with traffic or mobile phone communication, it will only get better and better. What do you mean? It's a network effect, NIO battery swap station is distributed thinking, it doesn't mean that I want to build a big hotel, it's actually only three or four parking spaces, although it adds up a lot, but the single-station investment is equivalent to some Nvidia training chip money, it's distributed thinking. The bigger the network, the better the experience, and if our "battery swap county pass" is not supported by the volume of Ledao, it will have to be pushed back for at least two years, because it is more difficult to support the volume of NIO alone.
In urban areas, where there are more users, the number of users has really reached a certain amount, and we use data to make decisions, and it is very easy to add a new battery swap station, so there is no need to worry about it at all.
You think, NIO has more and more users, but we also have more and more battery swap stations, from the perspective of station ratio, in the early days, there were fewer users served by one station, and now there must be more users served by one station. But now the service will be better, so it's not a single point of thinking, it's a network of thinking.
Media: NIO is a city NOA with lidar, Ledao is a visual solution, NIO's cockpit is a vertical screen, Ledao is a horizontal screen, its cockpit is a little different from the intelligent driving solution, will there be an impact on the follow-up experience?
Li Bin: If you have two children in the family, you know that there must be some differences between the two children, and it is understandable that they cannot be exactly the same. Weilai's current models on sale, whether in terms of computing power or from the perspective of sensors, are indeed stronger than the computing power used by Ledao, and the sensor is also stronger, it must have its benefits, which is like more airbags in the car, and the safety level that can be protected must be higher, which is a simple technical problem. But the whole baseline, from the bottom of the intelligent driving, we provide the best experience in this price range to the users of each car and each brand, which is what we are committed to doing.
At home, how to compare two children, we hope that they can both be successful and do their best in the field he loves, and we will definitely not pursue the same two children. Even if they are twins, they have different personalities, thank you!
Media: The first rights and interests are given relatively little, and they can't be exchanged for anything, and he thinks that if he chooses the Founding Edition gift package, if these rights and interests are not needed, can they be converted into points and exchanged for what he wants more? Why didn't Ledao set up an interest-free plan, and whether the BaaS ticket price was 149,900 or 206,900, and could it be bought out like NIO? This detailed rule does not seem to have been announced, as well as the battery swap station behind, his 60-degree and 85-degree batteries, and how the NIO battery is distributed, do you have any plans?
Li Bin: There are many problems, and we will introduce policies for buyouts in the future, and there will be policies similar to those of NIO.
Battery distribution, the fourth generation station, including the battery compartment of the third generation station are more batteries, now on average, only 50% of the position is used in the battery compartment, and there is enough capacity to expand according to demand, this is relatively easy, not a big problem, interest-free things, now there is really no.
Ai Tiecheng: Five-year interest-free, that is, 18,000 to 20,000, you can do the math. We are 43,000 yuan lower than Model Y, and he is now more than 10,000 yuan interest-free, in fact, our strength is very large, we calculate it very clearly.
Ai Tiecheng: The rights and interests of our founding version are also well thought out, and I talked about a few points yesterday, which can be expanded a little. First, AD is a subscription model, users are also very concerned, the whole system is equipped with pilot capabilities, the first one gives 5 years of free OSD, the second battery monthly rent that everyone is very concerned about, we say that 480 yuan is the price of a tank of oil, there is this logic behind it. Second, users have been asking if there is a lifetime free battery replacement, Qinghua and the two of us said in the live broadcast room, saying that our company will never have a lifetime free battery replacement, but we provided a battery replacement coupon.
In this right, we are a user company, and in the past, the voice of users, 80%, the greatest common divisor. However, it is true that we cannot meet everyone's individual needs, but our rights and interests are provided in the greatest common divisor.
Media: What are our plans to introduce relatively low-cost products such as Ledao in overseas markets?
Li Bin: Ledao and the next third brand, because of the mainstream market, the cost is definitely lower than that of NIO, and we will definitely rely on these two brands to enter the global market more actively, including the layout in Europe. This has to give us time, and now the main thing is to meet the needs of the Chinese market.
Media: In view of the less ideal and less rational automotive industry now, the price of Ledao yesterday has been raised by one step, in the follow-up of the development of the automobile market, what is the moat for the development of our NIO brand, and what is the moat for the development of the Ledao brand? Why do you ask this question, now in the field of public opinion, everyone mentions NIO, it is a tried and tested question for profitability, what do you think is our moat that is not easy for competing products to catch up with or cannot catch up with under the follow-up NIO system?
Li Bin: From NIO's point of view, our vision has always been clear: to be an existence that satisfies users, to become a user with leading technology and experience, to develop the ultimate product, to provide services that exceed expectations, and to create a community that grows together. This applies not only to the NIO brand, but also to the Ledao brand, and also to our next Firefly. Of course, the definition of the product in different target markets is different, the definition of experience is different, and the definition of community is not the same, which is normal, not that everyone should be the same.
For example, NIO receives a lot of requests every week and every day, and there are MBA and EMBA students who want to study with us, and we receive tens of thousands of people a year, who want to come to NIO to learn about our business model innovation and technological innovation, which is the definition of NIO user community. For example, in many business aspects, the attention to the NIO brand is much higher, and we hope that the NIO user base is an enterprising and socially responsible backbone. Ledao is a mainstream family user, for the "family fun, family-oriented", he has his community, we will continue to do community cooperation with many companies that provide products and services for families. If you do community operations around each target user and market, it is very different. These three brands will have their own definition of the target market, and they will all have products, services, and communities that meet the target market, and they will be defined separately, and of course, there will be business models that match it.
Back to NIO, we have endured a lot of things over the years, and since our peers are very good, there will be many ways to condense us and disassemble them, which is normal, and everyone is doing this now. The method we choose is not to dismantle, but to directly compare joyfully, just like yesterday's joyful comparison, we also have to compare, not to compare, but we generally don't do things behind our backs, and generally communicate more positively and honestly.
One point, yesterday I answered some questions during the live broadcast with Qinghua in the car, and there are also some connotations of ours, often saying that we lose money. I think if we make a lot of money at the current level, then there is a problem. The industry is a capital-intensive, technology-intensive, talent-intensive and very long industrial chain industry, industry companies have experienced decades, hundreds of years of history, some time ago I and Chery Yin always had a test drive exchange, I said Mr. Yin you have been doing good recently, he said I have been engaged in 27 years, the first 24 years are bitter haha, the last two or three years are slightly better. I think this is a true portrayal of the automotive industry, there is no quick win, no fluke. Even Tesla was only profitable after 16 years of existence.
We are in a market like China, if I make a profit in seven or eight years, eight or nine years will be profitable, of course there are a lot of companies that are very good and do this, but I think we are definitely working towards a more long-term goal, and a lot of the things we do take a long time to see the value of it, and the foundation we dig is deep enough, we don't want to build a five-storey or ten-story building, we want to build a 100-story building. Maybe after five or ten years, we are still digging the foundation, and others say that other hotels have opened and made money, and you are still building this building, so what does it matter? I'm not trying to build a 10-story building, I'm trying to build a 100-story building. I think a lot of things need time to evaluate whether they are right or wrong, and we must look at them in a certain time dimension. You look at a thing in different time dimensions, and it's very different.
For example, Stellantis was the world's most profitable car company last year, with a profit of more than $20 billion, do you think we should follow their example? You say that Stellantis is a very profitable company, and you can learn from NIO, and you can go to the oil truck, that's not what we have to do. Just like before I started NIO, I spent three years thinking about battery replacement, because of user needs, in line with China's market demand, and in line with China's user scenarios, I spent three years to understand, research, and study failure cases, not successful cases. Two days ago, a user asked in the live broadcast that Tesla wanted to do it back then, but gave up, he didn't call it giving up, but he didn't do it, or when he did it, he found that his car was not designed like this, and he wanted to do it, and the cost was too great. And we are native, thinking about this thing from scratch, designing the car according to this, designing our whole concept according to this, we are pushing for a lot more things than everyone thinks. Today, with more than 50 million battery swaps, it has proven to be a very reliable and popular way to power up, and it has not affected us to make charging the best in the country.
Our thinking is very simple:
First, starting from the interests of users, whether it is useful to users is the foundation, which is written in our company's mission and vision, written in the driving force of our company's vision, starting from the interests of users, and existing for user satisfaction.
Second, commercially sustainable, I'm a businessman, wouldn't I consider commercially sustainable, and I'm not a fool. Although the whole network taught me to be a CEO, when I was in college, I started working 30 years ago, and my first job was selling office supplies, and I also made money. Many people say that Li Bin lives on financing, how did I finance at that time? I am a person who has made money, not that I don't make money, so it is very important to be sustainable in business, but in terms of business sustainability, we must add the dimension of time to look at it. A business that makes money on the first day must not be a good business, Amazon Cloud Services has lost money for more than 20 years, Tesla has lost money for 16 years, and we have lost money for more than 9 years. What I want to say is that our $18.9 billion in financing comes from all over the world, and we raise so much money from around the world to China to develop China's smart electric vehicle industry, and most of the investment we make is used in basic research and development, even if these employees don't work at NIO, they are also very important seeds. Even if this supply chain serves others, we are very happy, we have promoted a lot of innovative supply chains, and now many innovative supply chains are not mainly from NIO, but from competitors, and we never sign an agreement that you can only use for us, we don't do this. How much more do I have to spend when I go to promote an innovative supply chain, and how much money do others save a year or half a year later than us. But why do we think it's important to be commercially sustainable? Commercially sustainable, of course, it is necessary to return to shareholders and employees, and the long-term interests of users are also guaranteed.
We do some things, we are not stupid, we will settle accounts, but we do not calculate accounts for a quarter or a year. Just like we have been doing battery swapping for six years, and now we are still engaged in county-to-county communication, and we see that the stronger the network effect, the more it will help us sell cars. Therefore, we are in the high-end market, and the market share of high-end pure electric vehicles of more than 300,000 has been more than 60%, and we do not count according to high-end brands, but only by price, which is also more than 40%. Therefore, although the high-end market and high-end pure electric market are so difficult, NIO is still unique.
Now more than 60% of the users who buy Ledao are because they can change the battery, so of course we will calculate the big account, and this big account can be calculated. I think it is commercially sustainable, we don't see that we are going to make a profit at the moment, we will definitely make a profit. Our gross profit margin is gradually rising, before the price of batteries rose to more than 20%, and then fell because of the price of lithium, and now it has risen again. Ledao's pricing is also gross margin, it is also cost competitive, and we are commercially sustainable.
Third, it should be beneficial to society and sustainable. Our mission is to create a sustainable and better future together, and this is written in our company vision.
For example, why Ledaoding 60 kWh of electricity as the basic battery life is because more than 500 kilometers is enough for daily use for users, it is enough to change the battery several times a month or charge it several times, and it is enough to change the battery of 85 degrees and 1,000 kilometers of longer battery life in the future when going out for a long distance. Because of the replaceable battery, the option of 75 kWh is 97%, and the option of 100 kWh is 3%, which not only helps users save money, but also saves how much social resources. Why do we want to put a little engine on the car, why do we want to put such a large battery pack on the car, although the various performance of the product is better, it sounds better, but how much social resources are wasted, I think these things need to be thought about deeply.
For example, the battery life problem, the battery is an electrochemical, why should it be coupled with the car? An electrochemical and a mechanical thing are decoupled, and everyone thinks about what can happen. It is equivalent to the original oil car, when you put the small battery to 15 years without breaking, how much is the small battery worth to you? Amplify this, 8 years and 160,000 kilometers, out of the warranty, the solution is to let users spend 80,000 yuan, 100,000 yuan for a battery pack? Just because you don't solve this problem doesn't mean it doesn't exist. The population is aging, and the batteries are also aging, so will I not care about it then? The car will be used for 15 years, or even 20 years, and how many years the battery will be used, don't you care? Isn't that the answer to that question? Do we just care about making money now, what will we do in 5 or 8 years? In the past eight years, China has already had 20 million new energy vehicles, and in the next eight years, it means that these 20 million vehicles will gradually come out of the battery warranty period. A battery pack, spending more than 60,000 yuan to buy, also costs 1.2 trillion, isn't it solved?
Therefore, it is beneficial to users, and the company can operate sustainably, but in the normal evaluation cycle, and then the society and industry are sustainable, which is actually the way NIO does things. That's what I think, I'm right, do I have to tell a lie, it's very simple.