“Yándōng” is twelve strokes, “Bùyì” is twelve strokes, and “Guònián” is also twelve strokes!
Preparing for the Chinese New Year in the harsh winter is not easy, and this is the current situation for the new forces in the domestic automobile manufacturing industry.
For the new forces in the automobile industry, December is a month full of suspense and challenges. The suspense lies in what will happen next year, whether the subsidy will continue to decrease or the threshold for car purchase will increase, etc. Everyone is filled with speculation and doubt about these issues. The challenge they face is that the sales volume decides whether they can survive in the long run.
At this time, facing the harsh winter, some of the “Friends of Peng” have started to huddle together to keep warm.
NIO Power cooperates with XPeng Motors
When asked if XPeng sees NIO as a competitor, CEO He XPeng said in an interview with @Caijing: “The market is so small, what is worth fighting for?”.
Currently, with the sales volume of new energy vehicles from January to November 2019 at only 1.043 million, talking about competition is not very meaningful.
As a smart entrepreneur, this is also the breadth of vision that should be possessed. The so-called “internal and external troubles, first internal troubles and then external troubles”. If a company starts internal disputes before solving problems concerning products, users, etc., it is doomed to fail. To go further, it is necessary to look at the world as a whole.
Yesterday, XPeng Motors and NIO Power reached a cooperation agreement, stating that they will achieve interconnection of data distribution and payment processes for their respective branded charging stations nationwide. XPeng car owners can use the XPeng app to scan and start the NIO Power ultra-fast charging pile, and NIO car owners can also use XPeng’s super charging pile for charging.
In addition, NIO Power will also join XPeng’s family charging service provider system to provide home charging installation services for some XPeng car owners.
In short, XPeng and NIO car owners can use each other’s charging services on their respective branded apps.
In terms of cooperation, NIO and XPeng have set a good example for their peers.
XPeng hugs big legs?
The “XPeng Motors Rights Protection Incident” in July was the “exciting jump” for He XPeng’s career in car making from 0 to 1. At that time, the brand reputation that XPeng Motors had accumulated with great difficulty plummeted to an all-time low.
Compared with XPeng, NIO’s outstanding reputation among its own car owners has always been an indicator that other brands are hard to surpass. In order to maintain this indicator, NIO continuously “upgrades” the services it provides.
For example, upgrading “single exemption” to “double exemption”, which means lifetime free warranty and lifetime free battery swapping. It can be said that in terms of services, NIO currently has no rivals among domestic new forces in the automobile industry.
So, to establish a good reputation, offline car owner services and user experience construction are one of the required courses, and charging stations are an important carrier.
The necessity of cooperation in supercharging piles
As for the necessity of cooperation in supercharging piles, user experience is the most important.
NIO said that after the access to Xpeng’s supercharging station, NIO’s charging map has already opened up the scan charging and payment function of 90% of the national DC fast charging piles, including State Grid, StarCharge, Techrules, Cloud Energy, Wanma iCharging, and Xpeng, further enriching users’ energy supplement options. In terms of quantity, NIO first expanded car owners’ travel range and convenience of energy supplement.
As for the quality, it is a matter of maintenance. After all, car companies with self-operated supercharging networks are much better than those of charging pile companies in daily maintenance. If daily maintenance is not timely, for example, if the pile is broken and no one maintains it, or if the charging position is occupied due to lack of management, it will lead to a lack of experience. You wouldn’t want to find that the location is clearly displayed on the app, but someone is occupying the parking space after you have gone there.
In addition, from my experience visiting Xpeng experience stores and NIO Spaces, when asked, “If you buy a car in a first-tier city like Shanghai, can you install a home charging pile in your hometown outside the province?” The sales representative of Xpeng said that the company has not yet encountered such a situation, but they can provide feedback to the supervisor about the relevant situation, and Xpeng only provides a free 30-meter power cord, additional meters would be at your expense.
NIO, on the other hand, is a little different, its sales representative said “It’s not a problem,” implying that “as long as you buy the car, there are no other issues.”
Therefore, from the perspective of “NIO Power will join Xpeng’s home charging service provider system to provide home charging pile installation services to some Xpeng car owners,” NIO is a great supporter of Xpeng.
Of course, after the foundation of the relationship is solidified, if some resources can be used to exchange for NIO’s mobile charging service in the future, it can also help to improve Xpeng’s service experience for customers. After all, mobile charging is a key brand of NIO’s five-star service brand. but the cold reality is it is unlikely to be given away easily.
Both controlling costs and making a stir. Why not?From the perspective of sharing dimension and promoting industry progress, NIO’s collaboration with XPeng in the future may be followed by many manufacturers. If new car-making forces can also do this, I will be the first to give them a thumbs up.
However, from NIO’s current situation, this seems to be more of a way to create momentum and control costs for the NIO Day at the end of the month. After all, while sales are growing, the supercharging stations must keep up with the pace, otherwise NIO’s service experience will be difficult to keep up. XPeng’s cooperation has to some extent improved its level, and NIO has also achieved two goals with one arrow.
For those in the cold winter, it is a helpless move. If a powerful brand can be quickly established through products alone, who would be willing to do those extra actions? Moreover, this is an era in which traditional automobiles are transforming into new types of automobiles.
XPeng’s 2019
“In the past 2019, every day was difficult,” said He XPeng, who has been all-in with the car-making business.
So, how difficult was it?
According to an interview with He XPeng by Caijing Tianxia Weekly, he said, “We had already prepared for 10 or 20 times the expected difficulties, but we didn’t expect that building cars was far more difficult than we expected.”
When asked what was the most difficult part of 2019, He XPeng said, “It was the countless anxieties from daily life. For example, the events that we went through in July, such as internal organizational adjustments, product positioning, and so on, were full of anxiety, because if you make a mistake now, the product will not sell in three years. You will be struggling between the two.”
If any of the points are done poorly, there will be dissatisfaction, such as licensing, opening stores, and delivery. People from various angles will ask you for benefits in order to push forward. If any link is not done well, it will fall into stagnation, and car owners will complain that you cannot even deliver the car.”
Fortunately, on November 13, XPeng Motors announced the completion of a $400 million Series C financing and the introduction of strategic partner Xiaomi Group. This temporarily relieved XPeng Motors’ financing problem. However, problems still exist and everyone still needs to work hard to solve them.
As for the industry’s view, He XPeng believes that “the industry’s cold winter will continue for some time, probably until 2021. By then, policies and prices will begin to stabilize, and consumers’ acceptance of electric vehicles will be higher, bringing about a period of demographic dividend for the industry.”
But even if the demographic dividend comes in 2021, there may not be many people who will keep going until then. Moreover, this time may come later. “Those who are left behind when the tide recedes are sad, this is the era.”
NIO at the end of the year
On December 12, NIO released a teaser image of its third mass-produced car and the release date.
From the recent Baidu and WeChat indices of the past 90 days, NIO has always maintained a high level of activity.
Meanwhile, Li Bin has been very busy lately and often appears on stage to give speeches.
Compared to XPeng Motors, NIO has been struggling this year and is often described as “disastrous” on the internet. Although Li Bin has responded that “it’s not actually that bad,” only he knows the true extent of their struggles.
Regarding the matter of NIO losing money, Li Bin also stated that “everyone has seen that NIO has lost a lot of money, but the money has been spent on research and development and user services, not on food and drinks.”
As for NIO’s future in the cold winter, NIO’s Vice President of User Development, Zhu Jiang, said that NIO has three moats: “a high-end brand, user services, and product technology.”
In China, the high-end brand image has slowly been ingrained in people’s minds, and the results have been good. To support this with data, as of November this year, NIO has sold a total of 28,743 vehicles including ES6 and ES8. For a product priced at around 400,000 yuan, achieving such results is rare not only among new automotive forces but also among domestic independent brands.
User services go without saying, as NIO’s service is a leader at the top of the pyramid. In terms of product technology, NIO’s NIO Pilot follows closely behind industry leader Tesla.
As long as these three moats are maintained, NIO will not fall. However, it is difficult to say whether NIO will surpass others or experience fast sales growth, as it takes time to transition from traditional automobiles to new energy vehicles. During this time, NIO needs to figure out how to shorten this transition period and maintain energy in order to welcome the coming “demographic dividend.”
Traffic can carry a boat but also capsize it.
As a company that often appears in the public eye, NIO already has significant traffic. This enables NIO’s brand promotion to have a more timely and broader diffusion zone. However, the downside is that NIO’s every move is exposed to the public. It’s difficult to judge whether this is good or bad.
For example, the 38 incident, spontaneous combustion storms, layoffs in July and August, financing storm, the CFO’s resignation, and the December 11th North American layoffs. The balance of public opinion towards NIO is constantly shifting.
Apart from doing well in terms of brand, product technology, and service, how to control public opinion is also one of NIO’s compulsory courses.
This road is long and winding.
The Cry of Fellow Practitioners
Let’s talk about the ideal first. On December 10th, shortly after the delivery of the ideal ONE, the ideal should have delivered the vehicles gradually to the users more smoothly. However, much to their surprise, China CITIC Bank, which had cooperated with the ideal, stopped lending to users who had borrowed loans to buy ideal ONE, for some reason.
On December 11th, a day later, the official account of Ideal Auto responded to the incident. Li Xiang, the founder of Ideal, also commented under the statement:
Through Li Xiang’s remarks, one can see not only his strong will to survive, but also the hard work of new car makers. For a to-C car company like Ideal, users are everything. If there is any problem with users, all the previous efforts are in vain.
In addition, a picture that went viral in the 42HOW Ideal National Car Owner Group yesterday caught Ideal’s attention. It was a user’s warning message on the vehicle’s instrument panel showing “emissions system failure”. At that time, even some onlookers spread rumors that many other vehicles had experienced the same problem.
This is how new car makers are: either being criticized or being criticized all the way.
To address the issue, Ideal Auto made an official statement today and solved the relevant problems of users as follows:
In a far-off place, NIO patted Ideal on the shoulder, saying, “Brother, I have stepped on quite a few mines that you have stepped on. Our road is still long.”
In addition, WM Motor, another leading new car maker, has been pushed to the forefront by events such as the air-leak incident and the spontaneous combustion incident. Only WM Motor understands its own pain.
Seeing the above, Ai Chi Automobile, which is scheduled to hold a U5 launch on December 19, is probably also anxious inside. After all, compared to the U5 which was listed half a step slower than its peers, the car is still in the process of feeling its way forward, unlike the big brothers who have found some “stones”.
Looking to the Industry Benchmark TeslaAfter discussing China’s new automobile forces, let’s take a look at Tesla, the benchmark of the industry. As we approach the end of 2019, what is the current state of Tesla?
During the Q4 2018 financial report conference, Musk stated, “Our goal for 2019 is to deliver 360,000 to 400,000 vehicles.” As of Q3, Tesla still needs to deliver nearly 110,000 more vehicles to reach the lower limit of this goal – for comparison, Q3 deliveries were 97,000, which means Tesla needs to increase this record-breaking number by 13.4%.
Last week, Musk sent an internal email to Tesla employees stating, “Our two primary goals for December, one of which is to ensure that all vehicles are delivered to customers by the end of the year.”
In addition, Tesla’s North American website also states, “Vehicles ordered today will be delivered by December 31 of this year and qualify for a $1,875 federal subsidy.”
Here’s a brief explanation of the US “national subsidy” strategy: any car manufacturer selling electric cars in the United States is eligible for a subsidy of $7,500 per car for the first 200,000 vehicles sold (subsidized to consumers). After exceeding 200,000 vehicles, the subsidy will gradually decline over the next four quarters until it is completely canceled in the fifth quarter.
This means that Tesla’s 2020 Q1 will welcome a subsidy-free day, although everyone’s subsidies are starting to decline. And this is different: when we were still in the era of policy-driven markets, Tesla had already used its brand, product technology, and other factors to promote the market. Even traditional automakers like Volkswagen have only recently begun to enjoy the US electric vehicle national subsidy, but Tesla is already at the forefront of the electric and intelligent assisted driving fields.
In addition, the domestic Model 3 has entered the scope of the new energy subsidy policy, and domestic new automobile forces are also facing more severe challenges.
Conclusion
Do you still remember what He XPeng once said: “Stay firm and you will see the dawn. I hope that everyone will give explorers more space in the process, and not draw conclusions based on the results of a single point. Over time, we will all become stronger in global competition.”
When I read this sentence, I actually shed a few tears. It reminds me of Rao’s words: “I am willing to lie on the ground, turn into a bridge, let everyone step on my body and work together to create cars, and realize our generations-long dream of Chinese cars.”
Both of these sentences express:
To grow and become stronger, we must work together and persevere!
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.