Qin Lihong taunts BYD and Tesla: If your cars sell well, don't forget to build charging stations.

Author | Xiaoying

Editor | Qiukaijun

“As a competitor, congratulations on the good sales of your cars. However, I still want to appeal that companies who take electric cars seriously should install their own charging stations.”

On February 6th, NIO held a media communication meeting for the Chinese New Year, and NIO’s co-founder and president Qin Lihong jokingly compared BYD, Tesla, XPeng, and other brands.

This joke was based on NIO’s own charging station statistics during the Spring Festival period (January 13th to February 5th). The data showed that 76\% of NIO’s public charging station electricity service brands come from non-NIO automakers.

Among them, BYD car owners charged over 4 million kilowatt-hours, accounting for 17.6\%; Tesla car owners charged nearly 3.7 million kilowatt-hours, accounting for 15.8\%. Following are XPeng, Roewe, Ideal, and other brands.

The focus of this media communication meeting was to analyze and review NIO’s “Spring Festival Transport” charging and battery swapping service system. Qin Lihong also talked about NIO’s ultimate business layout logic and outlook for the 2023 car market.

Operation review, continue to increase investment in charging and battery swapping system

This year’s “Spring Festival Transport” was the busiest since the outbreak of the epidemic three years ago and was a great test of NIO’s charging and battery swapping guarantee capability.

Qin Lihong mentioned that NIO’s infrastructure services have been lacking effective validation in the past two years because domestic traffic has sharply decreased, and daily service demands have been relatively easy. The Spring Festival this year was the first day of nationwide travel after the epidemic which was a comprehensive test for NIO’s service and guarantee systems that have been laid out for several years.

The data shared by Qin Lihong showed that during the Spring Festival period, NIO provided users with nearly 1.25 million battery swapping services, over 900,000 charging services, and nearly 200,000 service guarantees. At the same time, NIO also provided users with more than 13,700 flexible battery upgrade services.

The flexibility upgrade service of more than 13,700 batteries is worth mentioning. Among them, 5,441 batteries with a long endurance of 100 degrees Celsius are shared by users.

According to LiHong Qin, there are currently three types of batteries in NIO’s charging stations, which are 70 degrees, 75 degrees, and 100 degrees. During the Spring Festival, the demand for 100-degree batteries increased significantly, and some local charging stations had insufficient supply. NIO called on users who did not travel far to exchange their 100-degree batteries at the charging stations for 75-degree batteries as a way of showing gratitude and supporting long-distance travel.

Qin believes that NIO’s hardware facilities, flexible operation, and user community have jointly contributed to the value of this initiative. From another perspective, it also reflects the appeal of the NIO user community to users.

Another data that is worth reviewing is the waiting time for NIO users to exchange batteries during the Spring Festival. For example, on the sixth day of the first lunar month, which is the busiest day for NIO charging stations during the Spring Festival, the average waiting time for users to exchange batteries on highways was 13.08 minutes.

While this achievement is commendable, some car owners have expressed frustration on social media about having to wait for half an hour, or even an hour, to exchange batteries.

According to Qin, during the post-mortem analysis of the Spring Festival service, it was found that the previous estimation of the demand for local charging stations was insufficient. Therefore, NIO plans to continue supplementing the high-speed charging routes that have already been established.

As of the end of 2022, NIO had built a total of 1,305 charging stations, and announced plans to build an additional 400 charging stations at the end of last year’s NIO Day.

After the Spring Festival service, NIO plans to expand its layout of the charging station more aggressively. Qin stated that the number of new stations this year will be more than the planned 400. NIO is currently conducting a nationwide address screening and financial assessment and is expected to have a clear plan in February.

In addition, NIO has built 13,629 charging piles, making it the domestic automaker with the most publicly built charging piles. NIO’s Power Up Plan destination charging route has built 52 routes so far, which are charging stations specially built for users’ travel routes. NIO plans to double this number this year to ensure that users can go to more remote scenic spots.## Balanced Layout, Simultaneously Focus on Horizontal and Vertical Expansion

The heavy investment in the charging and swapping infrastructure has always been a point of doubt for NIO’s business model.

Qin Lihong stated a basic principle: NIO’s gross profit from car sales should roughly equal the company’s management and marketing expenses, with the main losses coming from research and development expenses, which can be solved through financing. He believes this principle is in line with the development logic of a growing technology and innovation company.

From the information disclosed in 2022, NIO has taken significant actions in both horizontal and vertical expansion.

On the horizontal side, NIO is aggressively launching new products to occupy various segmented markets. At NIO Day 2022, NIO launched two new vehicles in succession: the brand new ES8 and EC7.

According to the plan, NIO will also launch three new models in the first half of this year. It is speculated that these three new vehicles may be the next-generation ES6 and EC6, as well as the ET5 Hunter Edition.

In addition to the current models ET5, ET7, and ES7, NIO will have eight on-sale models based on the NT 2.0 platform in the first half of 2023.


Currently, NIO is also clearing inventory of its older 866 products through preferential measures, preparing to fully switch to the NT 2.0 platform.

Not only is NIO segmenting markets based on the NIO brand, but NIO is also promoting new brands to enter lower-end markets. NIO’s second brand, codenamed “Alpine,” targets the CNY200,000-300,000 market, while the third brand, codenamed “Firefly,” focuses on the CNY100,000-200,000 segment. Both projects are currently under development, and the models are expected to be officially unveiled in 2024.

In terms of vertical expansion, NIO has been reported to have projects such as producing batteries, chips, and mobile phones in 2022, each of which involves hundreds of people.

To both horizontally expand and vertically integrate, NIO has a lot on its plate. In terms of funds usage and management resource allocation, NIO inevitably faces great pressure.

Qin Lihong also indirectly commented on this topic during a communication meeting. He believes that smart electric vehicles are still in a very early stage of development, and the core issue for players in this field is still to gain a foothold for the next stage of development. If the maturity of the entire new energy industry is rated 100 points, the current level is less than 20 points. If we make judgments now, we may miss larger opportunities in the future.He believes that losses in financial data may not necessarily be bad. It could be a way for a company to make deeper layouts for the future. The overall situation may become clearer in the next 3-5 years.

Regarding the logic of Go layout, some companies may first kill a certain area before balancing the whole layout, while others may balance the layout and then start to take pieces. NIO’s strategy is clearly the latter. There is still no conclusion as to which strategy would win, this will have to wait until the endgame.

Optimistic Expectations: New Energy Vehicle Market to Rapidly Grow in 2023

Although NIO has its own ambitious layout plans, the market competition is still the main theme when it comes to the commercial nature aspect of the auto industry.

As of January 2023, most players have not made a good start, and NIO has only delivered 8506 vehicles, an unremarkable result.

However, Qin Lihong is confident about the 2023 market. He believes that the new energy vehicle market will still maintain rapid growth in 2023, and the growth rate will further increase.

“It was indeed difficult in January, but this is not contradictory to maintaining high-speed growth throughout the year.” Qin Lihong believes that there are mainly two reasons for poor sales in January.

On the one hand, the subsidy for the sales of new energy vehicles has been withdrawn, which is undoubtedly one of the core factors affecting sales. January 2023 is the first month when the national subsidy is zeroed. In December 2022, the market demand was partially consumed.

On the other hand, the recovery of market consumption under the influence of the pandemic is not yet complete. Moreover, the Spring Festival fell in January this year, and there were only about 20 effective working days, which also affected the sales of enterprises.

For the first half of the year, “pace” is the first keyword for automobile companies. NIO has already arranged its marketing pace well and will also flexibly adjust its tactics.

“Pace” is a key word for NIO in 2023. This word also appears in the internal letter that NIO’s founder, Li Bin, wrote to employees, with the title “2023, Pace and Efficiency”.

In the internal letter, Li Bin reflected on eight aspects of NIO in 2022. Some of the core points are: the growth rate of NIO deliveries lags behind the overall market growth rate; the response to fluctuations in supply and demand is not agile enough; the expansion of organization and team is too fast, and internal communication efficiency urgently needs to be improved. At the same time, due to management negligence, there are also quality problems with some products’ software and hardware, data security issues, etc.You can see that Li Bin’s reflection is quite deep. It is expected that these reflections will be the focus of NIO’s management breakthroughs in 2023.

The construction and operation of charging and swapping stations is also a business priority for NIO in 2023. From the past, especially this Chinese New Year, NIO’s power supplementation system has become one of its most prominent advantages, even “doing the wedding dress for others”. Whether this advantage can be extended to the launch of NIO’s two other branded models and help them sell well is also an important observation indicator for evaluating NIO’s investment in charging and swapping station construction and operation.

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.