2,700 layoffs, losses 6 billion, NIO has no future？

By the end of 2022, NIO had a total of 26,763 employees. On November 3, NIO Chairperson and CEO Li Bin said in a letter to all NIO employees that about 10% of positions would be reduced, meaning that about 2,700 people would be laid off.

On August 29, 2023, NIO announced the second quarter financial report. The financial report shows that the revenue decreased by 14.8% year-on-year to 8.7717 billion yuan, the gross profit decreased by 93.5% year-on-year to 87 million yuan, the net loss 6.0558 billion yuan increased by 119.6% year-on-year, and the adjusted net loss was 5.4457 billion yuan, an increase of 140.2% year-on-year. (Normally, NIO will release the third quarter financial report of 2023 around November 9, but as of the date of publication, it has not been seen for a long time, and the estimated data is not optimistic.)

As of October this year, NIO’s total sales were 126,067 vehicles, ahead of XPeng Motors’ 101,445 vehicles, but far below Li Auto’s 284,647 vehicles.

The level of sales is the bedrock of a car company’s economy, and a series of data suggest that NIO’s life in 2023 will indeed be difficult.

Although NIO’s sales and profits are average, it is also quietly doing big things.

As of November 1, NIO has built 2,079 power stations and 19,579 charging piles around the world, including more than 2,000 power stations in China and more than 600 high-speed stations. At the same time, NIO’s overseas and domestic stores are also increasing, with 25 new stores added in October.

The layout of NIO’s charging and swapping network and stores has undoubtedly improved the car experience of NIO owners and expanded the influence of NIO, but many people believe that the construction and operation costs of NIO swapping stations are too high, and the global rollout takes up a lot of money.

If the cost of a power station 3 million (including land, personnel, battery loss, etc.), the NIO 2000 power stations need at least 6 billion to support. More importantly, NIO power stations only serve NIO owners, and NIO promises to owners that there will be free power changes every year, so the profitability of NIO power stations is about equal to none compared with 6 billion.

In addition, with the rapid development of overcharging technology and battery technology, the charging time has been greatly shortened, the battery life of pure electric vehicles has also been greatly improved, and the advantage of fast power station replacement has been gradually weakened.

Writing here, the author wants to apologize for the NIO power station replacement.

The author has personally experienced the second and third generation of NIO power station, and the average power change time is only 3-5 minutes. No matter how fast the overcharge speed is, it is impossible for them to fully charge a 75KW/h and 100KW/h battery within 3 minutes at this stage, and the charging time will even be extended due to the instability of the charging pile voltage. If there is no revolutionary breakthrough in power battery technology, the charging speed of the power station cannot be shaken.

The power station takes up most of NIO’s resources, but it also brings a lot of convenience to users, and at this stage, the power station and the overcharge complement each other, and it is far from the day when the winner will be decided.

NIO’s predicament today is mainly caused by high prices and low sales.

At present, NIO’s product system has covered many aspects such as cars, SUVs, coupe SUVs, station wagons, etc. It is the car company with the most models and the widest layout among the three car companies of "Wei Xiaoli". Friends who are familiar with NIO know that the price of its models is generally high. If it were not for the price reduction of NIO ES6 and NIO ET5 and ET5T, NIO’s cars would not be lower than 300,000 at all, especially NIO ES8 high-end models. Correction is approaching 600,000.

The advantage of many models and high prices is that it has cut into a more subdivided market, stabilized NIO’s high-end brand perception, but also entered the sphere of influence of traditional luxury brands and emerging brands such as Tesla.

NIO ET5 and ET5T priced at 29.8-356,000 yuan have no advantage over Tesla Model 3 and BMW 3 Series in price, and belong to the level of half a catty to eight taels in control and comfort. The biggest advantage is that ET5T has design advantages in order to stabilize the monthly average of 5000 vehicles (ET5 and ET5T), which can be compared with BMW 3 Series and Tesla Model 3 with an average of 1-20,000 units.

In fact, NIO has tasted the sweetness brought by the price reduction, in June NIO all models down 30,000 yuan, although the cancellation of free power exchange and other parts of the rights and interests, but NIO new ES6, ET5T, ET5, ES8 and other models sales or a significant increase, its July sales is the first time in the year to break through the 20,000, especially the new ES6 of 11118 vehicles, become the absolute main force of NIO.

At this stage, many car companies are deliberately setting the price of new cars for sales, such as Zhiji LS6, Xiaopeng G6, Xiaopeng G9, etc., and the effect is quite positive. Xiaopeng G6’s October sales are 8,741 units, Xiaopeng G9 is listed for 15 days, and Zhiji LS6 is 28,000 units.

Now NIO really don’t have to hold it for high-end brand perception. It is the most practical to cancel part of the rights and interests to give consumers real money discounts in order to sell sales. What about the future of NIO? Layoffs and losses are just a small episode in its growth process. Even if Li Jiebin picks it up, with the scale of NIO charging stations and stores, as well as the annual sales of 150,000 vehicles, capital and major car companies will not give up easily. (Text/Youshi Auto, forward)

Note: The pictures are from the Internet, and the rights belong to the original author. Thank you together! This article only represents the author’s personal opinion and does not represent the position of Youshi Auto.