Li Xiang, Founder of ideal Automobile: "I believe that within the next 10 to 15 years, China will be able to produce world-class automotive brands."

On the afternoon of January 16, 2021, the China EV100 Forum Senior Executive Summit was opened in Beijing. Li Xiang, founder, chairman and CEO of NIO, gave a speech online.

Li Xiang mentioned that before starting to make smart electric cars, he had been running an automotive website, Autohome, for over 10 years. He discussed with many automotive brand managers about what a brand truly is, and how to consider it from a positioning and user psychology standpoint.

After over five years of experience, he realized that mindset and positioning are merely sales behaviors. If we return to the essence of a true automotive brand, because we don’t know how these brands thought over a century ago, brand is not a means, but the ultimate goal of a company. Brand equals who we are, which answers the most important question.

In addition, they conducted a very interesting study on brands they like, including Starbucks, Apple, Nike, and Nintendo. They found an intriguing phenomenon, which is closely related to China’s development over the years. These brands were born in the 1970s, including Nintendo, which actually started to develop in the 70s despite having existed for over 100 years. During their research, they found that these countries, such as the United States, Japan, and Germany, successively achieved a GDP of $10,000 in the 70s and kept developing up until now. Many brands were shaped during this period, and it is truly related to the country’s economy and development. Interestingly, China happened to be at the same point of development during that time.

Moreover, they found another interesting phenomenon regarding brands. They carefully classified them into two major types: product value-driven brands and channel value-driven brands. These two types of brands are related to the company’s personality and choices. However, the driving forces behind these types of brands are completely different. For example, in terms of mission and spirit, product value-driven brands are more self-oriented, often displaying the radiance and virtue of human nature. In contrast, channel value-driven brands pursue social value or a major mission, such as making transactions easier for everyone. Different companies make different choices based on their personality, but many things behind them will be completely different.It has been proven in the past few years that Chinese automakers can also produce high-end products sold at a price of more than RMB 300,000 or even RMB 200,000 in line with the development of GDP and intelligent electric vehicles. The sales of these products, which are even better than mainstream terminal products, are increasing, and this is closely related to the entire brand behind them.

In addition, if we want to create a product-driven brand like the ideal car, there are many theories to support the many ways in which this can be achieved. At the most basic level, we apply Maslow’s hierarchy of needs to our brand and divide it into three levels, each of which is crucial.

I believe that the 0-60 points are the brand’s value and are very rational. High-quality products, services, and technology are necessary for a brand to survive. This is the same for consumers and is even more important as consumers become wealthier and the country develops further.

The next layer on top of the brand is the brand relationship, which we define as 60-90 points. This is about the relationship between people and people, which, according to Maslow, refers to the needs of socializing and respect. The most important factor here, and one that is closely related to intelligent electric vehicles, is how to build a community with users.

We don’t talk to users about what we are doing, but we explain why we are doing it and we listen to what they have to say. By providing enough opportunities for user participation, we can create a sense of belonging and identification.

At this point, we measure a new intelligent electric vehicle brand not only by user satisfaction but also by the degree of user support. For example, when it comes to the ideal car, many users may say that the suspension of the Ideal ONE model is not good and voice their opinion in the community. Rather than telling the user that our suspension is good, we would ask why they think the suspension is not good. Many users may say that their friends have told them that McPherson suspension is not as high-end as the double wishbone suspension.

Many users may not be able to explain the difference between McPherson suspension and double wishbone suspension, but we will tell them the reason behind it. McPherson suspension allows for an additional 10 centimeters of longitudinal space in the extended structure, but it sacrifices 3% of handling. As the Ideal ONE is a mid-to-large SUV with three rows of seating for family use, we believe that the extra 10 centimeters of space is more important than the 3% loss in handling. Therefore, there is no right or wrong answer, only different choices. Users’ psychological doubts are resolved, and they will better support our products.This is the second level of branding. This is not an advertisement, it requires a very serious management, including the management between our own employees, the management between us and our users, and the management between us and our partners. This also reflects a phenomenon, which is why new forces in car making tend to choose direct sales. We need direct contact with users to build such user relationships.

Of course, with the development of the whole of China, we believe that in 10 or 15 years, China will also produce top global brands. We say that 90-100 points are on the spiritual level. This spiritual level may be small at first, but with the success of the enterprise and the connection to some effective people with spirituality, it will become what everyone yearns for.

The second insight is related to organization.

What is organization? Like branding, branding tells us who we are, and I think the organization tells us that we are a group of people, where we come from, and where we are going. This is very interesting. In fact, we have made a horizontal axis for what the entire organization needs to solve, and a vertical axis for what kind of organizational structure is suitable, with the left being relatively convergent and the right being open. Up is uncontrollable and down is controllable, which determines what kind of organizational model to cooperate with.

The industrial system that appeared hundreds of years ago is called the standard industrial organization. The biggest characteristic of the industrial organization is actually process and control, and it attaches great importance to professional managers.

With further development, big differences will emerge. Everything we do will start to become an intelligent organization, because the appearance of intelligent products and ecology will appear in a world that is uncontrollable and outwardly open. Cars have vitality and can continue to grow. We actually don’t know what the specific software functions on these cars will be like in six months or a year, and many times they are defined by the community and users. So at this time, there will be great differences in enterprise requirements, requiring each person to be able to make independent decisions instead of executing processes like in the past. Each person is an independent, distributed decision-making unit that can make decisions and connect with the outside world. This creates three essential differences.

The first essential difference is that everything needs to be data-driven, whether it is offline, online or product. However, the purpose of dataization is to empower employees, not to control them, because sufficient information transparency is required to make decisions.

The second essential difference is that all power must be decentralized, because in an uncontrollable world, employees can make better decisions on their own.The third fundamental difference is that the focus of enterprises will shift from pursuing perfection and avoiding mistakes in the past to caring about growth and debriefing, forming such a unique organization. This is a different discovery we have made in over 5 years, and I would like to take this opportunity to share it with all the leaders and colleagues present here while retaining HTML tags in Markdown.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email