William Li talked about a lot of issues in an interview, including sub-brands, collaboration with other car companies on battery swap services, priorities for 2024.
Nio (NYSE: NIO) spent RMB 13.4 billion yuan ($1.86 billion) on research and development last year, and will keep it at that level this year, said William Li, the electric vehicle (EV) maker's founder, chairman and CEO.
Li mentioned this in a March 16 interview with Cheng Li, founder of local automotive media outlet Cheyun, on the sidelines of the China EV 100 Forum in Beijing, according to a video of the interview released yesterday.
Nio's priorities for this year will include work on its sales network, charging and battery swap infrastructure development, a second brand, and next-generation models, Li said.
Li talked about a number of issues in the interview, including sub-brands, and collaboration with other car companies on battery swap services.
Below is the interview compiled by CnEVPost based on Cheyun's video, and the text has been adjusted without changing the original meaning.
(Nio founder, chairman, and CEO William Li (right) interviewed by Cheyun founder Cheng Li on March 16, 2024.)
Q: Nio has had a lot of changes this year, including a rare sharing you made in your WeChat status some time ago about reaching 40 million battery swap services. That photo revealed your status, you looked a bit excited and there was a sense of accomplishment.
A: People keep saying that Nio has invested a lot of money. In fact, since last year, some of our R&D investments have started to bring results for everyone to see.
Regarding the 40 million figure you just mentioned, we completed 40 million battery swap services, which is a pretty big milestone.
Also, the long-life battery we mentioned two days ago is a breakthrough in technology development on the one hand, and a breakthrough in our battery swap operation system on the other.
With long-life batteries, we can adjust the price of our battery rental service.
There's also, for example, our second brand, which is about to be introduced soon.
Overall, where has Nio spent its money over the years? What's the use of it? It's slowly coming out to everyone. It will take some time to prove that we are on the right track.
Q: There are some barriers to getting into the battery swap business, because the investment is huge. In addition to the technical investment, there is also the investment in infrastructure. Since last year, Nio has been working with more peers on battery swap, which is a big move.
A: A lot of things at Nio were decided to be open from the beginning. For example, our charging piles were open from day one, and now 82 percent of the power provided by Nio charging piles is for users of other brands.
The battery swap business was conceived from the beginning along the lines of openness. But initially we couldn't prove that this was the right path, and others were hesitant to use the service.
It's just like the cloud service on the Internet, which has been developed over a long period of time and is a very long cycle.
Actually, battery swap is like a cloud of energy that also needs a cycle and I think all this is quite natural at the moment.
Changan, Geely, Chery, JAC have already joined to use the service, and some other companies will join in the future.
Q: Has the actual work started now?
It's going to take a process, they will be designing based on our next-generation battery packs, they need to modify the vehicles, and they have to go through the validation process. The process will take some time, and there's no rush on this.
Q: We are very interested in Nio's second brand, Ledao (乐道 in Chinese, Onvo in English).
A: The name implies joy for the whole family and managing the family well. It will be aimed at the family market and is designed to help families be happier. Both the cost of buying and the cost of use are relatively cost-effective.
All of these are important, so we took the name based on that philosophy.
Q: Actually, the name Alps is quite good.
A: Alps (Chinese: 阿尔卑斯) is just a code name, its problem is that it is too long on one hand, and on the other hand it is a mountain in Europe. I think it might be okay as a code name.
Alps is already known by many people, but actually Ledao is more in line with Chinese people's preferences.
Q: How many cars will Ledao launch in the future?
A: There will be one this year, basically one every year, we won't launch too many models.
Q: How many models will there be in your plan?
A: Right now we are planning three models.
Q: Will there be SUVs and sedans?
A: Those are the ones anyway. It's easy for everyone to understand.
Q: Is the price in the range of RMB 200,000 to 300,000 yuan?
A: Yes, RMB 200,000 to 300,000 yuan.
Q: In the price range below RMB 200,000, Nio will have a new brand.
A: Yes, we have a third brand that will be launched next year.
Nio wants to use its R&D investment in these mass-market brands, which are relatively less expensive, so that more people can experience the new technology of smart electric vehicles.
Q: So you think a third brand is still necessary?
A: Certainly, for automobiles, covering different price ranges with different brands is something that makes sense. There is a limit to the price range that one brand can cover.
Q: This is quite a critical year for Nio and the competitors in this space, right?
A: Yes. We have to survive on the one hand, and on the other hand we have to build a good foundation for the future. It's very challenging and not easy.
Q: Nio, unlike many companies, is able to stick to a long-term strategy. How do you see this?
A: Yes, we have never wavered in our strategy, but we do have a lot of room for improvement in execution.
This year we will work on system capability, cost management and improve operational efficiency across the company.
Q: Last year Nio made adjustments in its sales capability, including expanding its sales network. What will be the core direction of adjustment this year?
A: On the one hand will be our high priorities, which you just mentioned, the sales and service network, charging and battery swap infrastructure.
We also have the second brand, and work on the next generation of models.
On the R&D side, we will maintain the intensity of our R&D investment. Last year our R&D investment was RMB 13.4 billion, and we will maintain that level this year.
Overall, we are following our own path.
($1 = RMB 7.1984)
