Nio needs to continue to improve its financial performance to support the company's sustainable growth, and has a responsibility and obligation to put every penny of investor and shareholder money to good use, Li said.
(File photo shows William Li (left), founder, chairman and CEO of Nio, and Qin Lihong, co-founder and president of the company, being interviewed by the media on December 24, 2023. Image credit: CnEVPost)
After a weak 2023 for deliveries, Nio (NYSE: NIO) is putting more emphasis on improving efficiencies and spending money in the right places.
Nio's performance in 2023 fell short of expectations, there are a lot of lessons to be learned, and organizational capabilities need to be improved as soon as possible, the company's founder, chairman, and CEO, William Li, said in an internal letter, according to a report today by local media outlet LatePost.
The company's resources are limited and it is still suffering losses from R&D and infrastructure investments, Li said, adding that Nio needs to continue to improve its financial performance in order to support the company's sustainable growth.
"We have a responsibility and an obligation to put every penny of our investors' and shareholders' money to good use," Li said.
Nio's departments, including research and development, supply chain, quality, manufacturing, sales and service, and administrative and support, all need to have a sense of improving return on investment and the ability to continuously optimize and save costs, he said.
In 2024, Nio needs to be resolute in avoiding ineffective and inefficient investments, and avoiding spending money on things that don't create value for the company and its users, Li said.
"We need to save every kWh of electricity we don't need to use, every document we don't need to print. We should not waste every click and inquiry, every opportunity for product and service improvement from user feedback," he said.
Li believes that the next two years will be the most important phase of change in the automotive industry and will be more competitive than ever.
"We will face more powerful competitors, more and more excellent products, and more intense price wars," Li said.
Nio also faces a more complex atmosphere of public opinion and a macro-environment full of uncertainty, where every employee has to be mentally prepared to face the challenges head on, he said.
In 2024, Li wants Nio to be more focused on priorities, and he lists three high priorities for the company in 2024:
Ensure long-term investment in key technologies to guarantee technology and product leadership and on-time, high-quality delivery;
Ensure that sales and service capabilities are able to cope with fierce market competition and that sales capabilities are converted into sales as soon as possible;
Ensuring that the development of nine core products under three brands is on schedule.
Li said the most important thing Nio needs to improve in 2024 remains its systematic capability.
Nio's systematic capability are still far from the target, and the company has fewer tasks to do in 2024 in terms of launching new vehicles, which will be a window for Nio to improve that capability, he said.
"The smart electric vehicle industry is so large and long that a one percent gap in systematic capability means a ten percent gap in sales and profitability," Li said.
Nio will invest resolutely in technology development and infrastructure construction for its products, but it will require a high degree of cost awareness and cost control, he said.
William Li touches on Nio's strategy, views on competition, and more in internal remarks
