Deliveries of vehicles under NIO's sub-brand codenamed ALPS are expected to begin in 2024, and deliveries of the company's first phone model are expected to begin in the third quarter of this year.
(Image credit: NIO App)
During the just-ended Chinese New Year holiday, NIO (NYSE: NIO) co-founder and president Qin Lihong participated in a face-to-face communication event with NIO vehicle owners and revealed some interesting information.
As background, NIO positions itself as a user-centric company, and to that end holds frequent face-to-face meetings between executives -- primarily founder, chairman, CEO William Li, and Qin -- and owners and fans.
This latest event was held in Beijing on January 26 from 2 to 5 pm, the penultimate day of the Chinese New Year holiday, which runs from January 21 to 27. According to the Chinese holiday schedule, January 28 and January 29 are normal business days, even though they are calendar weekends.
Here is a summary of the main points Qin shared at the event, as summarized by CnEVPost after reviewing several meeting minutes from the NIO app.
Timeline for the launch of sub-brand models
NIO is preparing models for a sub-brand codenamed ALPS, with deliveries expected to begin during 2024, according to the minutes shared by a user on the NIO app.
The company's other sub-brand, codenamed Firefly, is also in the planning stages and will be delivered first to European consumers.
Separately, according to minutes shared by another user, a small model of NIO is being developed and will debut in Europe, with an expected launch in the third quarter of 2024.
The timeline shared in these minutes regarding the NIO sub-brand models is not complete, but from the information above, it appears that NIO's sub-brand model codenamed Firefly will be available in the third quarter of next year.
NIO confirmed in August 2021 that the company will enter the mass market with a new brand and has established a core team. In subsequent external communications, NIO management mentioned the sub-brand's internal code name as ALPS.
In August 2022, local media reported that NIO planned to launch a third car brand, codenamed Firefly, in addition to NIO and the brand codenamed ALPS, to cover the low to mid-range market below RMB 200,000.
On December 21, 2022, local tech media LatePost reported that the first models of NIO's two sub-brands will both be compact hatchbacks that are popular in the European market, and both are expected to start production in 2024.
The two sub-brands will share the battery swap station network with the NIO brand, but the teams, channels, marketing systems, apps and communities will be separate, according to the report.
NIO has been preparing for the production of the sub-brand models since at least last May.
On May 10, 2022, the Hefei city government in Anhui province said in an article that the Hefei Economic Development Zone and NIO signed a cooperation agreement for the second phase of NeoPark and key core component support projects. NIO's vehicles are produced in two factories in Hefei.
The project, which covers 1,860 mu (1.24 square kilometers), will introduce smart electric vehicle products from NIO's new mid- to high-end brand and is scheduled to be completed and put into production in 2024, according to the article.
In addition to the sub-branded model, Qin gave a negative answer when asked if NIO has plans to launch a Performance version of the ET5 sedan, but said the model will be available in a shooting brake version.
NIO phone delivery expected to begin in the third quarter
NIO's first phone model is nearing the end of its development and will begin internal testing in the second quarter, according to these meeting minutes.
The device will first be tried out by NIO EP Club members, with deliveries expected to begin in the third quarter.
NIO's first phone will be a high-end Android model, with a price yet to be determined, and the company is also considering whether it will allow users to purchase the product using their NIO Credits in the NIO App.
NIO's phone manufacturing division is internally called the personal wearables division, suggesting a gradual broadening of NIO's presence in the mobile space, according to a user who shared the minutes of the meeting.
Li confirmed at the end of March last year that NIO would enter the phone-making field, and the matter was in the research stage at that time.
NIO's users wanted to see a phone that could connect better with cars, which prompted the company to look into the industry, Li said at the time.
In an interview with local media on January 12, Li said the NIO phone is not meant to compete with Huawei or Xiaomi, but to meet the needs of users.
If half of the NIO owners buy NIO phones, the business will have reached its goal, Li said. Cumulative deliveries of NIO cars reached 289,556 units as of December 31, 2022.
Battery swap benefits
NIO's unlimited free battery swap service on the highway for car owners during the just-ended Chinese New Year holiday has been positive, according to Qin.
The company is considering offering the benefit on every official Chinese holiday, just as the highway allows free access for owners on holidays, according to Qin.
From January 13 to February 5, all of NIO's battery swap stations along the highway were open to car owners for free, unlimited access, and operated 24 hours a day.
On January 17, NIO said its battery swap service reached more than 50,000 times in a single day.
Consumer sentiment is picking up fast after China lifted its Covid controls, but people's purchasing power and willingness to buy are expected to take six months to recover, according to Qin.
Power battery costs remain a concern. Lithium ore prices have risen by up to 30 times in the past two years, causing power battery prices to rise by nearly RMB 40,000, according to these minutes.
Notably, the price of lithium carbonate has continued to decline over the past two months, with the price of industrial-grade lithium carbonate falling to RMB 497,500 per ton on December 29, the first time it has fallen below RMB 500,000 since late September last year.
NIO is still losing money, but mainly due to R&D investment, and the company's gross profit has largely covered its overall operating costs, according to Qin.
R&D investment is like a parent's investment in their child's education, for future considerations 10 or 20 years down the road, according to Qin.
Qin believes that the life science and new energy vehicle (NEV) industries are two of the most dynamic industries in the world, and that NIO is currently at the forefront of the NEV industry and will continue to drive the sector forward.