Author: Feng Jingang
Introduction: The ET5, the most beautiful blooming of NIO’s 7 years of hard work.
On December 18th, the 5th NIO Day was held in Suzhou. NIO Day is known as the “Spring Festival” for NIO users and the ceiling of automotive event planning. Almost every NIO Day, NIO will release a heavyweight new car. This year’s release is the medium-sized intelligent electric coupe ET5.
Compared with existing products, the ET5 is further downgraded and can be regarded as the entry-level car of the NIO brand, bearing the burden of large-scale production. In other words, NIO ET5 is aiming at Tesla Model 3 and the pure electric BMW 3 Series to be released next year. NIO believes that “5>3”, meaning that the ET5 is stronger than the above two.
After each NIO Day event, the circle of friends will be routinely “bombarded”. This time is no exception, but the difference is that it seems embarrassing not to place an order for ET5 before posting. Later it was also verified that because the orders were too hot, the NIO APP crashed, a grand Versailles scene.
So why did the NIO ET5 explode? This is a question worth exploring.
Superficially, it is because the ET5 has strong product power, invincible appearance, luxurious interior, outstanding performance, and the use of the BaaS battery rental subsidy plan with a pre-sale price of 258,000 yuan, competing with the Tesla Model 3. However, in reality, the ET5 is not just a product, but a mature high-end social product accumulated by NIO over 7 years.
Establish a new benchmark for luxury mid-sized cars, but not easy
To say that there is currently no product that everyone can reasonably accept for luxury mid-sized cars: Tesla Model 3’s workmanship and texture have been criticized, and XPeng P7 and BYD Han are playing the edge ball in brand competition. Therefore, the arrival of the ET5, and the establishment of the benchmark, seems to be a popular desire.
In terms of product power, it is difficult to find obvious shortcomings on the ET5. It has a supercar appearance that meets the aesthetic standards of Chinese people, a simple yet luxurious interior, strong electric performance, leading intelligent configuration, and NIO’s high-end brand power, etc. Examining the above three cars from this standard, each has its own shortcomings.
So, ET5 has established a new benchmark for luxury mid-sized cars. However, pushing ET5 up is not easy for NIO’s automotive logic.Reduce cost is the priority. In order to maintain their brand faith, NIO has always spared no effort to go against cost reduction. Now, to compete with Tesla’s Model 3, NIO has to launch ET5. When the market pace exceeds the company’s pace, problems arise.
This time, two versions of ET5 were launched: 75kWh priced at 328,000 CNY and 100kWh priced at 386,000 CNY, which are the pre-subsidy prices. They are still more expensive than Model 3, P7 and Han. In addition, ET5 has many options, which will increase the price. Of course, if ET5 is directly compared with the Performance version of Model 3, it seems more normal.
Therefore, from the perspective of emergency cost reduction, NIO’s release of ET5 is not considered a success. However, NIO is not simple. Because NIO has a BaaS battery rental scheme, after adopting it, the starting price of both models of ET5 is reduced to 258,000 CNY. This looks very sincere, even though customers still need to pay monthly fees of 980 or 1,480 CNY.
Li Bin’s style is not to move mountains, he will build an unmapped road beside them. This is also the case with battery swapping and the launch of ET5. Judging from the feedback from consumers, ET5 with BaaS has received great praise and may achieve great success.
In addition to cost reduction, product compression is also a problem that NIO has to face after the launch of ET5. It is reported that due to various reasons, NIO’s flagship sedan ET7, which was released on NIO Day 2020, will begin delivery in March of next year. However, the entry-level sedan ET5, which was just launched, will be delivered in September of next year.
The problem is that ET5 and ET7 are too similar and there is not much difference in product performance, but the delivery interval is only 6 months. Who will consumers choose? The answer is obvious. From the perspective of car manufacturing, ET5 becomes a compressed version of ET7 without much problem. It’s just that the pace of release is too tight, and the cheaper ET5 will inevitably erode the market of the more expensive ET7.
In any case, ET5 is an important part of the NIO brand and bears the heavy responsibility of increasing sales. It is urgent to be launched. Based on this trend, it is necessary to make some sacrifices on a partial level.
The ET5, which is about to be launched, is not simple for NIO. For those who are not familiar with NIO, the product performance of ET5 is indeed very powerful, but whether it is as praised as some media outlets claim is questionable. In fact, there exist differences in product definition. Many people only see one side of ET5’s product, but haven’t seen the product power composition behind it, such as the most core charging and swapping system.For traditional luxury brands, the brand logo is the core, but for NIO, the battery swapping system is the strongest moat. Of course, after seven years of cultivation and accumulation, NIO’s brand power and appeal are also strong. Why is battery swapping NIO’s moat? This involves the bottleneck of electric vehicle development, which is a real problem.
Currently, the biggest challenge in the popularity of electric vehicles lies in the battery, including endurance and degradation, and swapping can be said to be a good and perfect solution. But because of the huge investment needed for swapping, it is not suitable for the end consumer market, and it has been rejected by almost all car companies. However, Li Bin insists on promoting swapping for end consumers from the perspective of users, shifting the battery development issue from users to enterprises, in order to win the trust of users.
This leads to the increasingly mature BaaS battery rental program. Purchasing BaaS, the minimum purchase price for ET5 is only 258,000 yuan, while eliminating long-standing problems such as endurance anxiety and battery degradation. So who doesn’t love such an ET5? Especially for those old users who are familiar with how great BaaS is, they can’t get enough of it. Data shows that 60% of current ET5 orders are from old car owners, more than half.
As for other questions about ET5, including product reliability and whether NIO will go bankrupt, there may have been topics in previous years, but for NIO, which has been standing strong for seven years, these are non-issues. Therefore, the core of competition has come to a single product end, and ET5 is impeccable with the strong support of BaaS.
At the press conference, Li Bin revealed a very important piece of data. As of this year, NIO has 733 battery swap stations, exceeding the expected 700, and it will almost double to 1300 next year. At this point, Li Bin deliberately paused and waited for the thunderous applause from users…
Li Bin knows what NIO users need, and users also know what substantial services NIO is providing for them. This collaboration is moving.
There were many white tents at the event site, such as NIO LIFE, NIO RADIO, NIO CAFE, and other NIO peripherals, as well as a user charity street and user exhibition hall. At the event, I saw several users playing soccer, with a security guard passing by without any intervention, which was quite harmonious.
In addition, there was a row of particularly eye-catching lights, which were long and represented car enthusiast associations from all over the country. Some users came forward to take photos. As someone who experienced the first NIO Day, I was a little speechless at this moment. From the ES8 to the ET5, NIO has already built its own little universe and is no longer the NIO that was questioned by the entire industry.“`
Moreover, as the users in this little universe of NIO are growing into an important group and seed of China’s new luxury car consumption, it is gratifying that NIO, as everyone’s new luxury choice, does not blindly follow vulgar values such as “driving a BMW, sitting in a Benz”, but rather works together with users to promote universal values such as harmonious coexistence between humans and nature and love for all.
Li Bin announced on the spot that NIO has officially launched the Clean Parks Ecological Building Plan, supporting the use of intelligent electric vehicles in global nature reserves, constructing clean and low-carbon energy infrastructure, and building a clean and self-circulating energy system, to protect the authenticity and integrity of the ecosystems.
Do you love NIO like this?
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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.