To all of those “Not Enough” sections, NIO is far ahead of all competition but still rated “Not Enough” by William Li.
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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(Image credit: NIO App)
25% Gross Margin “Not Enough”
NIO's innovative business, core research and development must be done, otherwise, gross profit cannot reach more than 25 percent and there is no chance to participate in future competition, according to Li.
Buying EV Batteries “Not Enough”
Batteries currently account for nearly 40 percent of vehicle costs. Assuming that the battery manufacturer's gross profit is 20 percent if NIO produces its own batteries, then it can get 8 percent more gross profit.
In the long run, we want 70 percent (of the batteries) to be produced by ourselves and 30 percent to be supplied from outside," he said.
Buying Automotive Chips “Not Enough”
And if NIO produces its own chips, it can get an additional 10 percent gross profit.
Defining the chip from algorithms would be much more efficient and help boost gross margins.
Normally, the gross profit of a car is 10 percent, and if you can get 10 percent more you can reach 20 percent. "If it doesn't reach that level, it's over."
Being Technology Followers “Not Enough”
Those currently in charge of the battery business at NIO are those who were poached from other companies and were the No.1 and No.2 talents in charge of technology. NIO has a deeper knowledge of the matter than others, he said.
EVs “Not Enough” Smartphone needed
"Think about it, if by 2025 Apple's car models are released, and 60 percent of NIO's users or even more users use Apple iPhones, NIO has no defense at all," he said at the time, adding, "NIO is not doing well today if we don't do something to prepare for it by then. "
For users currently using Android-powered phones, they may not have to change their phones in a year, Li said at the time, hinting that NIO's phone is expected to be released within a year.
Premium Luxury Segment “Not Enough”
B1 is the NIO sub-brand codenamed ALPS, with a model price range of RMB 200,000-300,000. B2 is the chip business, B3 is a lower-end car brand codenamed Firefly.
NIO's sub-brand ALPS will reduce the number of products to improve efficiency, and the number of models will be half that of the NIO brand, according to Li.
China “Not Enough” Europe & USA needed
Li said the next generation of NIO's models will come to the US.
Workforce output “Not Enough”
NIO's workforce has doubled this year, and Li believes the right thing to do is to have 100 percent of the people doing 150 percent of the work, not 80 percent of the people doing 100 percent of the work.
In today's environment, different companies have different approaches. For example, some companies choose to lay off 20 percent of their staff or stop hiring, but NIO doesn't do that, according to Li.
NIO NOP “Not Enough”
Li said during the opening ceremony of the new NIO House in Dongguan on November 27 that NOP+ should be released in the fourth quarter.
William Li used NIO NOP on ET5 on the drive to Hefei & said the performance was just OK.
NIO Management Performance “Not Enough”
He acknowledged that NIO's forecasts for production and sales plans were not accurate enough and that the next step would be to strengthen that effort, and that management should have been involved earlier.
For all the above I have largely used direct quotes from William Li recent speech.
To all of those “Not Enough” sections, you can add “User Satisfaction” & “User Experience” which for NIO is far ahead of all competition or levels ever reached in the Auto industry but still rated “Not Enough” by William Li.
Where does all this “Not Enough” William Li DNA lead to:
Leadership in all EV/AV Auto Segments up to Price RMB 600,000
Leadership in EV Battery Technology
Leadership in EV Automotive Chip Technology
Leadership in EV audio/video AR/VR technology
Leadership in EV related Smartphone Technology
Leadership in EV Battery Swap Technology
Significant progress on these matters certainly creates the potential for dismal failure/bankruptcy for Mercedes Benz, BMW & Audi by 2025 when they still may not have competitive offerings versus NIO in these multi-billion business segments.
Where does William Li lag behind?
Chinese have always been in awe of the ultra-rich businessmen in their society.
William Li only owns one small 600-square-foot apartment & donated one-third of his NIO stock to the NIO community.
William Li’s pursuit of material glory may have substantial failings.
What sets William Li apart?
Jack Ma of Alibaba adopted /adapted proven U.S. business models in his own part of the World & became super successful.
Pony Ma of Tencent pretty much did the same thing.
No doubt brilliant in their own way.
So PayPal, Amazon, What’s App, Facebook of the West were emulated in China making billions for a few.
William Li is on a different path:
To crush the business models of Global Behemoths Mercedes Benz, BMW & Audi which may make him a Generational Leader.