NIO's 2022: Finding Order Amidst Chaos.

The Meaning of ES7

On the evening of June 15th, NIO’s first SUV model based on the NT2.0 platform, the ES7, was officially released. The pre-subsidy price range is 468,000 to 526,000 yuan. Together with the old “866” (ES8\ES6\EC6) and the new “577” (ET5\ET7\ES7), NIO’s product line now has a total of 6 models, making it the most diverse among new energy automotive companies.

As for the founders, Li Xiang, the CEO of Li Auto, is undoubtedly a product manager. His Li ONE has become a mid-to-high-end car model with monthly sales of over 10,000 units; He XPeng, the CEO of XPeng, is a technical expert who has been committed to showcasing the intelligence of XPeng brand from automatic driving systems to flying cars and machine horses.

Meanwhile, NIO’s CEO, William Bin Li, is more like an entrepreneur. From NIO’s electric supercar, mid-to-high-end brand with a price range of 300,000-500,000 yuan, to sub-brands with a code name “Alps,” from the battery swapping model to BaaS solution, and to the self-managed NIO House and NIO Space user systems.

NIO depicts a more macro-commercial system, so its anticipated success is impossible to estimate from the competitiveness of a single product alone.

This article does not discuss how competitive ES7 will be in the market, but explores its significance in the entire NIO product line.

Here, the sales data for NIO’s “old 866” in the past year are presented. ES6, as the best-selling model, has a maximum monthly sales volume of just over 5,000 units with significant fluctuations. EC6 is in the middle with a higher starting price and a Coupe design that reduces practicality, making it difficult to surpass ES6. ES8, which was released earlier, remained below 2,000 units per month.

Although Bin Li emphasized in the Q1 conference call this year that the overall stability of current 866 orders is growing, this growth rate is clearly not matched with the overall growth rate of the new energy market.

By comparison, the Huawei-backed Wanjie M5 broke the 5,000-unit monthly sales level in just three months.

Clearly, the hard work has failed to sustain NIO’s sales with its 866. With the new car models ET7 and ET5, both of which are sedans, NIO’s leading position in the high-end pure electric SUV market will decrease with the decline of the competitive power of the car models.Although NIO also released upgraded 2022 models of ES8, ES6, and EC6 (all equipped with 75 kWh battery pack) at this press conference, with prices ranging from CNY 496,000 to 598,000 for ES8, from CNY 386,000 to 496,000 for ES6, and from CNY 396,000 to 496,000 for EC6, which increased by CNY 18,000 compared to the older versions (the existing models can also be upgraded with extra payment), the competition in the 300,000-500,000 sector of new energy SUV market has become different from the past, apart from the traditional strong players such as BBA, new forces such as the upcoming Li Auto L9 and XPeng G9 are also entering the market.

As a result, ES7, burdened with the responsibility of consolidating the market position, comes out timely.

Moreover, as the only SUV model based on NT2.0 platform, ES7 also bears the mission of NT2.0 platform iteration.

Compared to the first generation, the greatest advantage of NT2.0 platform lies in the improvement of the degree of intelligence. The platform will all be equipped with NIO Autonomous Driving (NAD) technology, which will gradually open in the fourth quarter of this year, and also be equipped with hardware devices such as dual side angle cameras and top-mounted lidar.

As Li Bin revealed in Q1 conference call this year, all existing NIO models will switch to NT2.0 technology platform next year.

In other words, 866 will also be produced based on NT2.0 platform next year, and probably also equipped with NAD autonomous driving system. However, ET5 and ET7 are sedans with different line-of-sight heights and body sizes from SUVs, so the appearance of ES7 is very necessary.

However, judging from the historical sales, NIO has never really created a so-called “popular product”, and it is also difficult for ES7 as a sub-segment market product with higher price to complete this task.

Overall, ES7 should be a defensive product, and the attacking mission this year is still on ET7 and ET5.

Intensive product line

Come to think of it, NIO’s last SUV product release was two years ago, and this year it started to deliver three new models and three old models with revised configurations.

This has caused many people to feel that NIO’s product line is somewhat confusing, especially the appearance of ES7 breaking the convention that NIO used odd numbers to name sedans and even numbers to name SUVs. Careful readers may also have noticed that there is no interval between the prices of 2022 866 models and ES7’s price coincides with those of the other three models.

In fact, in addition to the well-known factors in 2019, there were signs of changes in NIO’s product line planning last year.

Last year, NIO’s naming patent application introduced naming ways such as ES9, EC7, ES7, ES5, EC5, and ET6, as well as EE and EL series, and it is still unknown what type of models they will be.You can see that, unlike BMW 3 Series, 5 Series, or XPeng P5 and P7, NIO has unified the naming convention of odd and even numbers.

It is worth noting that when promoting the ET5, NIO said it is the smallest car model in size, which suggests that NIO’s sedans and SUV products in the future will gradually fill in all numbers from 5 to 9.

Currently, the overall price range of NIO’s brand is concentrated between CNY 300,000 and 500,000, which means it will be a dense product line.

In the traditional gasoline car market, it is also quite common to launch sedans and SUVs of the same level on the same platform. The selling price of an SUV is often higher than that of a sedan.

NIO ES7 is also the SUV version of ET7, similar to the relationship between ES6 and EC6. ES7 currently has two versions, normal and premiere, corresponding to the normal and premiere versions of ET7. The former is priced CNY 10,000 higher, which is NIO’s product to meet different segmentation demands in the same price range, consistent with NIO’s philosophy of meeting user demand as much as possible.

Let’s compare NIO with Li Auto. Li Auto’s product strategy is to launch pure electric and extended-range electric vehicle models for each CNY 100,000 price level, while NIO launches sedans and SUVs in each sub-segment.

It can be foreseen that the incremental market brought by sub-segment is far less than the incremental market brought by the cross-segment, which means that NIO is still some distance away from profitability at present.

According to William Li’s previous disclosure, NIO hopes to achieve break-even in Q4 2023 and achieve balance of income and expenditure or profitability throughout 2024.

The sub-brand that will begin mass production and undertake the volume task in 2024 may become the key point for NIO’s profit.

In any case, this year is a big year for NIO’s products, and in the current complex market and multi-product coexistence, NIO has also learned to find its own order in chaos.

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