Editor's note: This is a guest post from Rafi Khan, an NIO investor, and does not represent the views of CnEVPost.
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History over past century has shown that Disruptive Products such as:
Toilets, Running Water, Refrigerator, Electric Power, Radio, TV, Toilet, Land Line, Cellular Phone, Automobile, A/C, Computer, Dryer, Washer, Smartphone, Tablet.
Experience S Curve, Exponential Growth once they reach critical mass 10% Market Share Penetration.
Superb Graphs spanning 115 years are shown in video linked below
Video also shows how all major countries are on their own S Curves Exponential Growth with EV adoption -- it is a must watch video.
Multi Billion $ Question is whether NIO BaaS Battery Swap can also have S Curve Exponential Growth once it reaches 10% Market Share penetration first in China & then in Europe.
Let us first list some of benefits of BaaS / Battery Swap:
- Much lower Price Entry. New XPEV P5 may be a game changer with its RMB 160,000 to 230,000 Price Range but at that Range who would NOT want a BaaS version selling at RMB 120,000 to 190,000. Same applies at every price range from RMB 100,000 ($15,000) to RMB 500,000 (80,000)
- EV company gets BaaS customer FOR LIFE with massive Utility Type Monthly Revenue Stream after EV Battery is fully paid for after 5-6 years. Arguably BaaS is the best method to stay connected to an EV Customer for the rest of his EV ownership life
- Easy Upgrade to higher capacity Battery
- Easy Upgrade to next generation Battery
- EV Customer ability to buy better quality EV at lower entry price
- More Range / Mileage as battery upgrade gives higher capacity or higher energy density
- Less Depreciation on EV
- Govt Subsidy until at least end of 2022
- Higher resale value of EV relative to cost
- Longer Life of EV -- will never be obsolete because of battery
- NO costly Upgrade due to EV Battery Swap
- NO Battery degradation / failure worries
- Much faster charging
- NO waiting for charging if Battery Swap time scheduled online
- Easier planning for long journeys
- Fast Battery Swap versus Charging Wait Lines
- Easier Battery / Lithium Recycling
NIO is already at 50% Market Share in Premium Luxury Chinese EV Segment.
NIO is well over 10% in Shanghai Total Market Segment -- In China where Shanghai goes other cities follow.
With completion of NeoPark (Phase 1 in Q3 2022) NIO will have:
- 1.3 Million EV Capacity in 2023
- At least 6 Premium Luxury Models all on Next Gen Power Train Platform
- Probably extra Capacity being built or having been purchased
- Mass Market Product in the works under a new Brand Name
- Unmatched 2,000 Battery Swap Stations at prime locations
- Large purchases from Govt as it replaces entire Leased Audi A6 fleet with NIO ET7 Sedans
Such attributes suggest more than critical 10% Market Share for NIO BaaS Battery Swap Disruptive Product.
That should cause S Curve Exponential Growth for BaaS Battery Swap EV Market Shares as other Big Auto companies join the Battery Swap Model.
Domino effect will occur as others from Big Auto follow Geely in committing to BaaS Battery Swap.
Even Global Behemoths like VW, Toyota, Ford, GM & Honda will NOT have the time or capital to build a Chinese / European Battery Swap Infrastructure like NIO at that time.
NIO with its existing nationwide infrastructure & NIO Power (which allows company to capitalize monthly BaaS payments) will be uniquely placed to offer BaaS Battery Swap services in China & Europe.
So let the dominoes fall:
- Launch of ET7
- Announcement of 2 new Premium Luxury Models
- Completion of NeoPark
Soon Investment World will realize there is a major disruptive product (BaaS Battery Swap) within its own proven existing EV disruptive product.
Look at S Curves, Exponential Growth over past 115 years on disruptive products to see what then happens next.
Not a Financial Advisor Nor Auto Analyst JMHO DYODD