On August 20th, NIO announced the specific plan for BaaS (Battery as a Service): customers who choose to rent NIO batteries will have a down payment reduction of ¥70,000 ($10,000). The monthly rental fee for 70 kWh power batteries is ¥980 ($141), plus a battery insurance fee of ¥80 ($12). Therefore, customers who choose to rent NIO batteries need to spend ¥1,060 ($153) per month. If users opt for the BaaS package, which is called “Service Without Worries,” they don’t need to pay the ¥80 ($12) monthly battery insurance fee.
After the announcement, we conducted a poll in our car enthusiast group regarding the BaaS policy, and below are the results of our survey.
A total of 148 people participated in the poll. Among them, 61 people said they would choose the BaaS policy when purchasing a vehicle, accounting for 41.22% of the total number of voters. Two other car enthusiasts added their opinions about the policy:
@米爆
BaaS is not just a math problem. It’s true that it is not cost-effective on the surface over a period of more than seven years. If we take a long-term perspective toward BaaS, NIO could have continued with its original financial plan if it had only wanted to balance its books with BaaS.
Investing so much in BaaS is meant to pave the way for more possibilities. For example, flexible upgrades and renting by the day or month, or even various kinds of packages (such as renting for three months and getting one month free) like those offered by mobile phone operators.
As battery technology advances, batteries will be increasingly better at the same price, or rental fees for the same specifications will decrease. Therefore, choosing BaaS is more like betting on the future, looking to see if NIO can provide more possibilities and better prices with BaaS in the next 3-5 years.
Since it is betting, there is a chance to win or lose. If you don’t believe NIO can achieve it, buy the car outright for peace of mind, which is not a bad choice either.
@孙开开
The cost of capital for ¥70,000 ($10,000) is ¥233 ($33) per month (calculated at 4% annual profit rate). Therefore, the monthly cost of leasing a battery is ¥755 ($109), which is about 7.7 years, and additional costs will need to be paid afterwards.
When selling the car, having the battery included will make it an easier and more profitable sale. It could be worth at least ¥30,000 ($4,329).
Overall, I feel that this plan is not cost-effective and it is better to buy the whole car outright.
If you want to participate, please scan the QR code in the picture above to join the activity.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.