$NIO Inc (NIO.US)$ According to China Business Daily, on the...
$NIO Inc (NIO.US)$ China Business Journal learned that on the evening of October 7th local time in Berlin, Germany, NIO held the NIO Berlin 2022 event at the Tempodrom Music Hall in Berlin, announcing the start of services in the markets of Germany, the Netherlands, Denmark, and Sweden.
It is reported that this is NIO continuing its business operations in the European market after entering the Norwegian market last year. NIO's three new models ET7, ES7 (named EL7 in the European market), and ET5 will open for reservations in the aforementioned four markets with an innovative subscription model. NIO will establish a comprehensive service system including products, charging, etc. in these four countries, creating a user community starting with cars.
The above three models are now available for reservation in Germany, the Netherlands, Denmark, and Sweden. Among them, ET7 will start deliveries on October 16, EL7 will start deliveries in January 2023, and ET5 will start deliveries in March 2023. It is worth noting that users in the four markets mentioned above will obtain vehicle services through NIO's innovative subscription model.
In addition, Li Bin also stated that subscription services require very strong operation, so subscription is a more difficult thing. The system for selling cars is very mature, going from selling to subscription means adding a 'selling' option, which is equivalent to adding a permanent subscription service. This is de-escalation. But to transition from selling cars to subscriptions is too difficult. I hope our team can take on challenging tasks right from the start.
Li Bin further stated: 'We need a sustainable model. If the subscription business model is not sustainable, we will not engage in losing money for the sake of publicity. From the perspective of subscription pricing, we basically consider all factors and still need to have a reasonable gross margin for sustainable operation.'
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The ambition and strength of NIO: the beginning of an 8-year globalization journey
China Business Daily 2022-10-10 14:33
Reporters Xia Zhibin and Shi Jingjing reported from Shanghai
"Providing services to users in Germany, the Netherlands, Denmark, and Sweden is an important step for NIO to achieve its 2025 goal of serving more users globally." NIO's founder, chairman, and CEO, Li Bin, said, "Our innovative products, charging services, and flexible subscription model will bring a new look to the European electric vehicle market. The expansion of our business in Europe marks a new chapter in NIO's global development."
(NIO's founder, chairman, CEO Li Bin at NIO Berlin 2022 / Image source: NIO)
China Business Daily reporters learned that on the evening of October 7th local time in Berlin, Germany, NIO held the NIO Berlin 2022 event at the Tempodrom, announcing the start of services in the markets of Germany, the Netherlands, Denmark, and Sweden.
It is reported that this is NIO's further expansion in the European market after entering the Norwegian market last year. NIO's three new models ET7, ES7 (named EL7 in the European market), and ET5 will be available for pre-order with an innovative subscription model in these four markets. NIO will establish a complete system service in these four countries including products, charging, and more, to build a user community centered around cars.
The above three models are available for pre-order in Germany, the Netherlands, Denmark, and Sweden starting today. Among them, the ET7 will start deliveries on October 16, the EL7 will start deliveries in January 2023, and the ET5 will start deliveries in March 2023. It is worth noting that users in the four mentioned countries will access vehicle services through NIO's innovative subscription model.
According to NIO, the subscription model aims to provide users with sufficient flexibility and personalization, with subscription periods ranging from 1 month to 60 months. Subscribers not only get to use vehicles but also enjoy worry-free services, including full insurance, maintenance, battery swapping service, and the future provision of flexible battery upgrade services.
In addition, subscribers will become members of the NIO user community, participate in various user activities organized by NIO, and use NIO Centers, among other benefits.
Four countries are implementing the subscription model.
"After we released the subscription model, there was still a lot of controversy. Overall, there is more controversy domestically than in Europe. Of course, there are also some users in Europe who have left comments saying, 'Why is there no option to buy?' This is very reasonable, but from the perspective of subscriptions, we have definitely gone through very long and thorough considerations," Li Bin admitted on October 8.
From Li Bin's perspective, regarding the field of smart electric vehicles, from the ultimate perspective, the car itself will evolve into a service. Although this may take a long time to achieve. "The car itself is a high-value, durable consumer product, and users used to have quite a few things to worry about. We hope to simplify the user service interface. NIO has always been making various attempts. The combination of cars and subscription services requires the right timing, place, and conditions to make this attempt."
Why is it car sales in Norway and subscription services in Germany, the Netherlands, Denmark, and Sweden? Li Bin explained that this is due to differences in taxation. In Europe, an important tradition is 'company-owned cars' and 'usage rights.' The subscription approach for high-end cars has already been understood and accepted by most European countries. "This is related to taxation and consumer habits, becoming the basis for our business decisions."
"Why not in Norway? In Norway, the tax system dictates that very few people accept 'usage rights,' probably less than 10%, in the single digits. So, if we only used subscriptions in Norway, it would not work," Li Bin added.
Li Bin believes that in the current leasing and subscription models, there are still many pain points for users that have not been addressed, simply put, it is not flexible enough. "The subscription service we have introduced carefully analyzes the pain points of the current leasing and subscription models. The way each subscription works on our app is quite different from what Europeans are currently doing, we start from the user's perspective, making it more flexible and reasonable. There is still a lot of room for innovation and efficiency improvement in user experience in subscription and leasing."
Furthermore, Li Bin also emphasized that Nio Inc. directly provides subscription services to users as an automotive company, rather than through third-party subscription companies, financial companies, or dealers. "We do this directly, eliminating middlemen. By reducing middlemen in retail, we can enhance the user experience. Subscriptions and leasing also have this opportunity, reducing the intermediary steps, directly serving users will definitely be much more efficient. Creating value around usage rights and subscriptions, improving efficiency, providing a good experience for users, there is still a lot of room for this."
Regarding the establishment of the team in Europe, Li Bin stated: "The European team has just been established, and we hope that each team in every region will focus on certain aspects, for example, the Norwegian market focuses on selling cars, while other places focus on usage rights and subscriptions. Selling cars and subscriptions are two completely different logics, the team itself is still in the process of expansion, we need to focus on all aspects."
In addition, Li Bin also stated that subscription services require very strong operations, so subscription is a more difficult matter. "The system of selling cars is very mature, from subscription to sale, adding a 'sale' option is like adding a permanent subscription service, this is a low blow. But transitioning from selling cars to subscriptions, that is too difficult. I hope our team can challenge difficult tasks right from the start."
"Looking at it from the perspective of the mainstream markets in Europe, we determine that about 25% or 20% of users are determined to buy. We are more focused on the 80% of users initially, and may neglect to cater to this 20% of users, this is a commercial trade-off," Li Bin added.
Li Bin also stated: "We need a sustainable model, if the subscription business model is not sustainable, we won't engage. From the perspective of subscription pricing, we basically take into account all factors and still aim to maintain a reasonable gross margin for sustainable operation."
At the same time, Li Bin also emphasized that they will not enter the short-term rental market, nor spend time cooperating with short-term or daily rental companies. "Our smallest subscription unit is monthly, this is very certain. So there is a significant difference between subscriptions and simple leasing."
Outputting a comprehensive service system.
"At NIO Inc., we emphasize systematic thinking and systematic innovation, not simply focusing on specific technologies, services, or particular tasks. We have a very comprehensive system. Since unveiling the logo in London in 2016, our considerations regarding users, enterprises, and communities have been very systematically innovative," said Li Bin.
"Even when we go to Europe, we are still operating within a system. It's not just about exporting cars over here and selling them. Starting from Norway, we have been adhering to a very comprehensive system for service output," Li Bin stated. "We didn't suddenly decide to come to Europe out of the blue. From the very first day of establishment, we were ready to serve global users. We understand that relying solely on the Chinese market is not enough to truly become a competitive company."
It is understood that NIO Inc. will establish a comprehensive electric charging system in the four-country market. Currently, NIO has connected to 0.38 million charging piles in Europe, which can be accessed directly using NIO NFC cards. The NIO Europe version charging map has also been put into use. By the end of 2022, NIO plans to build 20 battery swapping stations in Europe; by the end of 2023, this number is expected to reach 120.
Currently, battery swapping stations between Munich and Stuttgart are already operational, with the station in Berlin about to be completed. By 2025, NIO plans to build 1,000 battery swapping stations in markets outside of China, with the majority to be located in Europe.
It has been revealed that NIO will also directly serve users in Germany, the Netherlands, Denmark, and Sweden. NIO will establish sales and service networks in the aforementioned countries' markets. NIO Center in Berlin is set to open soon, while NIO is also constructing NIO Centers and NIO Spaces in cities such as Hamburg, Frankfurt, Dusseldorf, Amsterdam, Rotterdam, Copenhagen, Stockholm, and Gothenburg.
Currently, NIO has established authorized service center networks in major cities of Norway, Germany, the Netherlands, Denmark, and Sweden in these five European countries. Users can also use the NIO App European version released in August this year to view vehicle data and schedule services through the "One Click Service" feature.
With the advancement of NIO's business in Europe, the NIO user community in Europe has become more vibrant. Currently, the NIO 'User Advisory Group' in Europe has 270 members who continuously provide suggestions on product localization experience, service quality, charging network, and store experience, helping NIO continually improve its products and services.
NIO will continue to increase its research and development investment in Europe. In July of this year, NIO established an innovation center in Berlin for the research and development of smart cabins, autonomous driving, and energy technology. In September of this year, the NIO Energy European Factory in Pest County, Hungary, has completed its first battery swapping station. The factory serves as NIO's European manufacturing, service, and research and development center for electric products. The Berlin Innovation Center, along with the NIO Energy European Factory and NIO's research and design teams in Oxford and Munich, will work together on various research and development projects.
It is worth mentioning that not long ago, Li Bin and Qin Lihong drove the ET7 through 2500 kilometers in ten countries in europe. Qin Li Hong, co-founder and president nio inc, said:'There are actually not many electric cars that can be seen on the streets in europe now. Even in countries like Norway, where the annual sales of electric cars account for almost 80% of new car sales, the number of electric cars on the streets is actually less than we imagine. From the perspective of the street view of electric cars in countries like Germany and Denmark compared to what we are used to in china, we can determine that the time for its great development has not yet arrived, so what we see is still an opportunity.'
Regarding when to build factories in europe, Li Bin said:'This mainly depends on how big the demand is in europe. If the demand is high, we will build, this is entirely up to the market.'
Regarding the landing in the markets of four european countries this time and the following global layout, nio inc explained:'First of all, for ambitious companies, globalization should be the gene of a startup. To achieve long-term development, it is necessary to occupy the major markets around the world. The success of brands like Volkswagen, Toyota, and BMW confirms this fact. Secondly, an enterprising corporate philosophy, product strength, technological innovation capabilities, and innovative business models are nio inc's trump cards for globalization. Finally, as the world's second largest new energy market, the european market is a battleground. If the business model can succeed in europe, it will not only bring more profits to nio inc, but also prove the universality of nio inc's values and business models.'
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KokHong OP : So don't say that the update of tariffs in europe has no impact on its stock price! Even though its current market share is very small, think about how much capital it has invested in europe.
Dragon Fish KokHong OP : Wait the trade war erupted they will reduce the tariff as Chinese already started retaliate on their other goods just like what happened to Australia. Australia needs the chinese market more than the Chinese need their market. The EU will be the same too. Sooner or later they will realize it. They can't bully chinese anymore. See how long they can last if they can't sell their products to the Chinese market and are also unable to fight with Chinese in other markets too. BRICS countries are getting bigger as more countries are joining the grouping. The trade volume will increase further as more are keen to join BRICS.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")