Li Bin..

Weilai Li Bin: Raising $18.9 billion from around the world to develop China's automotive industry
November 27, 2024 18:07
At present, NIO has invested more than 53 billion yuan in innovative technology research and development, has about 11,000 R&D personnel worldwide, has a total of 9,300 patents pending and authorized worldwide, and has built a full-stack technology layout of 12 items.
"We have raised 18.9 billion US dollars from around the world and invested it in the development of the smart electric vehicle industry in China. We have done many open things for the Chinese auto industry chain. We have made things that others can use directly. We have trained a lot of talents, both in our own company and in innovation with industry chain partners." Li Bin, founder, chairman and CEO of NIO (NIO.US) , said this during the live broadcast of Yiche's in-depth dialogue program "Haoke" "NIO's Tenth Anniversary: Dialogue with Li Bin" on November 26.
During the interview that day, Li Bin discussed with Wang Honghao, founder of 180 Science and Technology and manager of CarStyling China, and Pan Luan, a well-known technology blogger and manager of "Luanfanshu", the original intention of founding NIO and the actions that the company will focus on next.
When talking about why NIO is still favored by investors around the world during the global capital winter, Li Bin said frankly that the reason why investors are willing to invest in NIO is that NIO is open and transparent in its financial affairs, which is very important to global investors. At the same time, investors can see that NIO's money is spent on technology research and development, energy infrastructure, brand building, etc., which can all be considered as an investment.
"Many people don't understand why we were able to raise 3.3 billion US dollars from Abu Dhabi, and I only went there once and completed the financing. It's not because I'm so capable, my English is not that good. Our financial figures are all public, they know much more clearly than us, and know where the money is lost. Let me give you a small example. We have invested a total of 53 billion yuan in research and development. If you look at the balance sheet, all our research and development investment has been expensed and reflected in the current loss. Some companies would choose to record it as an intangible asset, so that they don't lose that much in the current period. Investors can know the situation when they see the company's finances, because our finances are very transparent." said Li Bin.
When talking about the investment in technology, Li Bin said, "It costs money to enjoy new technology." He gave an example that the first company to develop a new technology spends three to four times or even more than the second company, and when the technology matures, the cost of using the technology will drop. "Can NIO choose to follow others? Yes, but as a high-end brand, our investment in R&D and innovative technology will pay off, and users will pay for it. This is why NIO has more than 40% share in the high-end pure electric market."
At present, NIO has invested more than 53 billion yuan in innovative technology research and development, has about 11,000 R&D personnel worldwide, has a total of 9,300 patents applied for and authorized worldwide , has built 12 full-stack technology layouts, and produced a series of industry-leading technological achievements, including the successful tape-out of the industry's first smart driving chip NX9031 manufactured using 5nm automotive-grade process, and the full release of SkyOS, the vehicle's global operating system, achieving a breakthrough in "having both core and soul".
Although it is still making losses, Li Bin said frankly that this is an investment. The investment in technology, energy infrastructure and brand will eventually pay off and have an impact on users, and gain market returns through high-quality user experience.
Previously, NIO released its third-quarter financial report for 2024 on November 20: sales in the third quarter hit a record high of 62,000 units, revenue increased to 18.67 billion yuan, vehicle gross profit margin continued to increase to 13.1% , R&D investment was 3.32 billion yuan, and cumulative R&D investment since 2016 exceeded 53 billion yuan. Thanks to the positive free cash flow, NIO's cash reserves increased to 42.2 billion yuan. NIO also released the strongest quarterly guidance in history: the fourth quarter delivery guidance is 72,000 to 75,000 units, a year-on-year increase of 43.9% to 49.9%; the fourth quarter revenue guidance is 19.68 billion to 20.38 billion yuan, a year-on-year increase of 15.0% to 19.2% , both of which set historical highs.
Li Bin said in a financial report conference call on the evening of the 20th: Starting next year, NIO will enter a new round of product cycle, Ledao and Firefly brands will have new products delivered, and the entire group will enter a new high-speed growth cycle. "With sales doubling next year, the overall operation will continue to achieve positive growth, and the loss is expected to narrow next year. The goal is to achieve profitability in 2026."
After the financial report was released, many well-known investment banks gave positive comments on NIO, including Deutsche Bank, Citi, Bank of America, Morgan Stanley, JPMorgan Chase, BOC International, CICC, etc., all of which gave NIO a "buy" or "overweight" rating.
Deutsche Bank gave a "buy" rating in its latest report, saying that NIO's third-quarter performance was in line with market expectations, and believed that with the increase in the volume of Ledao L60, the fourth-quarter guidance could be achieved . At the same time, based on the company's strong new product plan in 2025, the goal of doubling sales in 2025 is expected to be achieved. The bank gave a target price of HK$73.80 for the next 12 months.
Citibank also gave a "buy" rating with a target price of $8.90. Citi expects that Ledao will continue to maintain its strong sales momentum after reaching monthly sales of 20,000 in March next year, thanks to the expansion of the number of sales outlets and the continued construction of charging and swapping infrastructure. Citi expects that driven by the continuous upgrading of the operation, sales and technology of the three brands, the company's gross profit margin in 2025 is expected to continue to increase.