$NIO Inc (NIO.US)$ Li Bin: NIO's payment cycle is 90 days af...

$NIO Inc (NIO.US)$ Li Bin: NIO's payment cycle is 90 days after acceptance, and profitability in 2026 cannot be compromised
"We certainly have not achieved our business goals in the past three years. According to the plan from 2017 to 2018, NIO should have reached its current state in 2022, which is generally two years later than the early plan." At a communication meeting held recently, NIO Chairman and CEO Li Bin said that achieving profitability in 2026 cannot be missed, and the company will ensure profitability from four aspects: sales growth, gross profit margin improvement, cost control, and improved operational efficiency.
It is reported that NIO's sales volume this year is about 220,000 vehicles, and its sales target for 2025 will double that of this year. In order to achieve this sales target, NIO will complete the layout of three brands within this year.
In September this year, the first product of NIO's second brand Ledao, the L60, was launched, and the monthly delivery volume of the car will reach 10,000 by December; at the end of December, NIO will release its third brand Firefly and its first product. In addition, by the end of 2025, the NIO brand will release the flagship sedan ET9 and gradually update the existing product matrix; the Ledao brand will release two more medium and large SUV products, which are scheduled to be delivered in the third and fourth quarters of 2025.
In addition to announcing subsequent goals and product plans, Li Bin also responded to questions related to the payment terms of NIO's suppliers.
Li Bin said that NIO's payment cycle is 90 days after acceptance is completed, which is a common practice in the industry; the increase in accounts payable in NIO's financial report is mainly due to the growth of revenue and sales.
Regarding the overall market, Li Bin believes that the auto market will continue to grow in 2025, and the market share of new energy vehicles is expected to reach more than 75%, but the price war will not stop.
"We are now in the transition period from oil to electricity. New entrants need to quickly gain a foothold and will certainly be more aggressive. Traditional car companies can only maintain their market share by lowering prices. The tug-of-war between oil vehicles and new energy vehicles will affect the profits of car companies, and this period is a very normal stage." Li Bin said that in 2 to 3 years, we may enter a new period of stable competition, and the industry's overall profit level and profitability will return to basic normal, but before that it will be a very fierce competition stage.
Li Bin believes that in 2024, the leading automakers are still in the stage of accumulating strength. Starting from 2025, the leading automakers will accelerate, and the gap between the leading automakers and second-tier automakers will further widen. By 2027 at the latest, the market penetration rate of China's (3.100, -0.11, -3.43%) energy vehicles will exceed 90 % ; China's car ownership is 340 million, and will eventually peak at 400 million. The subsequent opportunities for Chinese automakers will mainly come from replacement and overseas markets .
In addition to expanding its product lineup in the domestic market, NIO will further expand its overseas market. Li Bin said that NIO's plan is to enter 25 overseas regional markets by 2025, but the Ledao and Firefly brands will be the main ones. In addition, unlike the previous layout of fully direct sales in Europe, NIO will look for more overseas partners to achieve rapid expansion.
"China's new car exports can reach 15 million units. From a global perspective, Chinese automakers can achieve annual sales of approximately 40 million units, accounting for more than 40% of the global market share. In this process, the main competitors of Chinese automakers will be Japanese and Korean automakers," said Li Bin.
In addition, the China Association of Automobile Manufacturers issued a statement on December 3rd, saying that American automotive chip products are no longer reliable and safe. In order to ensure the safety and stability of the automotive industry chain and supply chain, the association recommends that Chinese automobile companies purchase American chips with caution.
NIO has previously released its self-developed laser radar main control chip, and its smart driving chip has been successfully taped out. The recently released ET9 is expected to use this chip. At the same time, NIO is also actively investing in and using domestic chips. Li Bin said that the research and development of chips with higher computing power is relatively easy, but some chips with lower prices and less usage are more challenging.