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Text丨Gu Xiaobai Editor丨Du Haibaijin

Source: Zhengjingshe (ID: zhengjingshe)

(This article is about 2,600 words)

[Observation on the “Car Elimination Contest” of Zhengjing Society No. 15]

“If NIO becomes number one, it will never publish a weekly ranking.”

A week ago, at NIO’s Innovation Technology Day, Li Bin expressed his dissatisfaction in this way.

Then on the afternoon of July 30, NIO's public relations director Ma Lin posted on Weibo: The weekly rollout is a low-level rollout, and directly named @李想, shouting, "Stop it, the current mission of Chinese car companies is to achieve technological breakthroughs through research and development, isn't it? Let's power up together!"

This time, the top executives of NIO collectively "pointed their arrows" at the weekly car sales chart released by Ideal. However, Ideal ignored it and continued to release the weekly sales chart, and the relationship between the two car companies began to be widely discussed.

NIO obviously doesn't want to be compared, at least in the "subjects" it is not good at. However, the operation under the law of market competition cannot be controlled by your hidden subjective will.

1

Aiming at the smart car ecosystem

The competition in domestic new energy vehicles has entered a white-hot stage, and NIO is still playing a big game.

First, let’s look at the automotive business. Data shows that from January to March this year, NIO’s performance was relatively sluggish, with sales of only 8,132 vehicles in February, lower than the same period in 2023.

Analysts from Zhengjingshe noted that sales have picked up since April, especially in May and June, with monthly sales exceeding 20,000 vehicles. Overall, in the first half of this year, NIO delivered a total of 87,426 new vehicles, a year-on-year increase of 60.2%.

However, according to the annual sales target of 230,000 vehicles set by NIO at the beginning of the year, the progress in the first half of the year was only 38%. In other words, if the goal is to be achieved this year, an average of 23,762 vehicles will need to be delivered per month in the second half of the year, which is obviously not an easy task.

Next, let’s take a look at the big game that Weilai is playing:In addition to selling cars, the company is also developing a variety of businesses.

For example, in the mobile phone business, on July 27 this year, at the NIO IN 2024 Innovation Technology Day event, NIO’s second-generation NIO Phone was officially unveiled.

Analysts at Zhengjingshe believe that it is easy to understand why NIO wants to cross over into the mobile phone industry: the company wants to build a smart car ecosystem through smartphones.

However, there has been constant controversy in the market. After all, the smartphone market is a red ocean market, and competition in the stock market is very fierce. Even if the target customers of NIO mobile phones are NIO car owners, with the current sales volume of NIO cars, it is obviously difficult for the mobile phone business to support this market.

In addition, NIO's mobile phone business is full of uncertainties due to the large investment in business technology R&D, complex ecosystem construction, and difficulty in supply chain integration.

Chips are also a business that has always attracted market attention. On July 28 this year, at the NIO IN 2024 Innovation Technology Day, Li Bin announced the successful tape-out of the world's first automotive-grade 5nm high-performance intelligent driving chip "Shenji NX9031".

In the chip business, NIO has invested a lot of manpower, material and financial resources. According to public reports, NIO has formed a chip team of more than 800 people since 2020, focusing on the research and development and innovation of chip design.

At present, although NIO has made some progress in chip research and development, it still faces many difficulties, such as there is still a long way to go from successful tape-out to mass production, as well as the stability and reliability of the supply chain.

In the battery swap business, NIO plans to add 1,000 new battery swap stations and 20,000 charging piles in 2024 to improve charging convenience. However, NIO's battery swap business faces many challenges, including the rapid development of battery technology, cost issues, standardization and compatibility issues, market competition pressure, and security and privacy issues.

In general, NIO has continued to make frequent big moves this year, but although most of its businesses have achieved some success, they cannot be considered successful and there is still a long way to go.

2

Losses are getting worse

On November 27, 2022, at a face-to-face event with Li Bin of NIO, in response to the question of when NIO will be profitable, Li Bin said:The hope is to break even in 2024.

2024 has come, but contrary to expectations, NIO's losses continue and even become more serious.

The financial report shows that the net profit attributable to ordinary shareholders from 2018 to 2023 was -23.328 billion yuan, -11.413 billion yuan, -5.611 billion yuan, -10.572 billion yuan, -14.559 billion yuan, and -21.147 billion yuan, respectively. The total net profit loss in six years was as high as 86.631 billion yuan.

In the first quarter of 2024, the loss remained high. Among them, the net loss was 5.1846 billion yuan, an increase of 9.4% over the same period last year and a decrease of 3.4% compared with the fourth quarter of last year. Excluding equity incentive expenses, the adjusted net loss (non-GAAP) in the first quarter of 2024 was 4.9032 billion yuan, which increased both year-on-year and quarter-on-quarter.

Why is there such a huge deficit?

Let's first take a look at where NIO's money is spent. The main reason is what I mentioned earlier. NIO wants to do too much. In addition to NIO cars, there are also super charging piles, battery swap stations, chips, mobile phones, sub-brands, batteries and other fields, which all require large and continuous investments.

This is reflected in the financial reports as high R&D expenses, sales, general and administrative expenses, etc.

For example, the latest financial report for the first quarter of this year shows that after deducting equity incentive expenses, NIO's R&D expenses reached 2.66 billion yuan, a slight decrease year-on-year; after deducting equity incentive expenses, NIO's sales, general and administrative expenses in the first quarter reached 300 million yuan, a year-on-year increase of 30.9%. The main reasons for the increase were increased sales personnel costs, increased expenses related to the expansion of the sales and service network, and increased sales and marketing activities.

However, despite the high expenses, NIO's revenue in the first quarter was declining. The financial report showed that the total revenue in the first quarter of this year fell 7.2% year-on-year and 42.1% month-on-month to 9.91 billion yuan.

In the secondary market, after NIO successfully landed on the New York Stock Exchange on September 12, 2018, it was listed on the Hong Kong Stock Exchange and Singapore Stock Exchange on March 10 and May 20, 2022, respectively.

This makes NIO the world's first automaker to be listed in three places, and also makes it the first Chinese company to be listed on three international capital markets at the same time.

However, due to poor financial indicators, the stock price of NIO, which has been listed in three places, has generally shown a trend of opening high and closing low.

As of August 2, 2024, NIO's U.S. stock price closed at US$4.05 per share (before readjustment, the same below), a drop of more than 90% from its high of US$66.99 per share in January 2021.

In the Hong Kong stock market, NIO's stock price continued to fall overall. As of August 2, 2024, the closing price was HK$31.8 per share, down more than 80% from the peak of HK$199.20 per share reached in June 2022.

3

Frequent complaints on the blacklist

As a high-end new energy vehicle brand, NIO has always attached great importance to the construction of its brand image.

However, frequent complaints undoubtedly lower the brand image and reduce consumers’ trust and favorability.(Please refer to articles such as "NIO has frequent quality issues and made a joke after being sold. What can Ledao do?").

Zhengjingshe analysts noted that according to the Black Cat Complaint Platform’s July news, NIO was listed on the black list in the June corporate complaint handling red and black list. The reason for this is that the number of complaints was high, with the Black Cat Complaint Platform receiving a total of 475 complaints against NIO.

On the other hand, the response rate is low. The response rate in the past 30 days was 0, which means that a large number of complaints were not responded to and handled in a timely manner, further exacerbating consumer dissatisfaction.

Judging from the content of the complaints, the problems faced by NIO include but are not limited to sudden power outages, charging pile failures, non-refundable deposits, etc. These problems are directly related to consumers' car experience and rights and interests, and have therefore attracted widespread attention and dissatisfaction.

The most recent user complaint was on August 3, when a consumer reported poor after-sales service from NIO. The owner picked up the car on July 30, 2024, but just two days later, on August 2, he discovered an unusual noise coming from the vehicle's center console.

The owner then went to NIO after-sales service for inspection on August 3. The after-sales service confirmed the abnormal noise problem and proposed to remove the center console for further repairs. However, the owner was dissatisfied with the plan to remove the center console and did not agree.

On the same day, NIO arranged for the original film application service, but during the film application process, a new problem was discovered: the sunroof was faulty, with the entire sunshade falling off. This series of problems caused the car owner to seriously question NIO's quality system. The car owner requested compensation, apology, refund and return in the complaint.

(Photo source: Black Cat Complaint)

To change the situation of huge losses, we have to sell more cars; to sell more cars, we must have a good reputation among users - the so-called gold and silver cups are not as good as user reputation.Obviously, this is also a lesson that NIO, which has already achieved some success, needs to learn more about. What do you think about this? Welcome to leave a message in the comment section to discuss. [Produced by Zhengjingshe]

Editor-in-charge | Tang Weiping · Editor | Du Hai · Bai Jin · Editorial | An An · Proofreading | Ran Ran

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