In the letter, Li laid out his views on the competition in the EV industry in 2024, as well as Nio's priorities.
(Image credit: CnEVPost)
Nio (NYSE: NIO) founder, chairman, and CEO William Li recently sent out his first letter in 2024 to employees, part of which CnEVPost highlighted in yesterday's story.
We now have the full text of the letter, and below is CnEVPost's translation from Chinese to English.
William Li's letter to employees
Dear colleagues, 2024 is here and I wish you all a happy new year!
In 2023, the competition in the smart electric vehicle (EV) industry enters the most intense phase of the qualifying round in a macro environment full of uncertainty.
The past year was another challenging and memorable one for Nio. Our overall performance did not meet the expected goals, there are many lessons to be summarized and reflected upon, and our organizational capabilities need to be improved as soon as possible.
We proved our determination and resilience in the face of adversity with our own actions, and withstood challenges to lay a solid foundation for the next stage of our development.
In 2023, we began deliveries of five all-new models in six months, demonstrating Nio's capability and efficiency in product development and delivery.
At the Nio IN innovation and technology Day, we presented our 12 full-stack technology layouts in full for the first time.
Our pilot assisted driving feature, NOP+, has been expanded from highways to urban roads, and the rate of evolution of group intelligence capabilities is industry-leading.
Our user satisfaction in cockpit experience continues to improve, and our first flagship phone, Nio Phone, was launched, leading the way in vehicle-phone interconnection innovation.
The Shenji chip, SkyOS operating system, 900 V high-voltage platform, SkyRide intelligent chassis and other world-leading technologies unveiled alongside our flagship smart EV, ET9, have made it clear to more people that technological innovation is at the heart of Nio.
Our delivery volume in 2023 were 160,038 units, a year-on-year growth of 30.7 percent, and we continued to rank No. 1 in China's EV market with an average transaction price of RMB 300,000 or more, with a market share of more than 40 percent. Nio's brand image in the high-end market is increasingly recognized.
In terms of building sales capacity, the investments we have made in recent months have begun to take effect, laying the foundation for us to compete in the market in 2024.
We completed our plan to add 1,000 battery swap stations and 10,000 charging piles, fulfilling our promise to customers.
We made the per-day battery rental service available, the 150-kWh battery passed regulatory filings and was tested in real-life, and the system of rechargeable, swappable, and upgradable services was improved.
In November, we signed cooperation agreements on battery swap with outstanding peers including Changan Automobile and Geely Holding, and the opening and sharing of Nio's battery swap network took a historic step forward.
Charging and battery swap services are not only our strengths, but will also become an important business growth point in the long run.
In a cooling capital market, we have successfully introduced strategic investment to replenish capital and resources for the next phase of development, and Nio's technology, strategy and growth prospects have been recognized by long-term investors.
Thank you all for your hard work! Together, we have proven the stamina to stay true to our original vision in the face of pressure, and we have the execution ability to face problems head-on and solve them.
Over the past few years, the share of plug-in hybrids (PHEVs), extended-range electric vehicles (EREVs), entry-level battery electric vehicles (BEVs), and BEVs for the mass market has increased rapidly.
Starting from 2024, with the accelerated availability of charging and battery swap facilities and changes in consumer psychology, the premium pure electric market, where the Nio brand is located, will reach an inflection point of explosive growth.
In the second half of the year, we will launch the second brand for the mass market, which will bring new growth points for the company while serving more users.
Our continuous investment and in-depth layout in technology, products, services and community give us the confidence to participate in the next stage of competition.
Colleagues, the next two years will be the most important stage in the transformation of the automotive industry, and the intensity of competition will be beyond imagination.
We will face stronger competitors, more and more excellent products, more intense price wars, a more complex public opinion atmosphere, and a macro-environment full of uncertainties.
Every colleague must be prepared enough to give up illusions and face the challenges head on.
Pressure and challenges are always the best opportunities for outstanding companies to improve their capabilities. I expect you to join me in doing the following in the coming year.
Prioritize the essentials and focus on high priorities. The company's three high priorities are:
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.
The company's resources are limited, each department and each colleague should make full use of VAU working method, clarify the working idea and work focus, ensure that the outputs of the departments and your own work are consistent with the company's high priorities, and improve the company's overall operational efficiency.
We need to establish systematic capability at all levels. After 9 years of development, our business framework of product technology and service community has basically taken shape, and the organizational structure supporting multi-brand, multi-region and multi-platform has been initially established, but our systematic capability is still far from our goal.
The smart EV industry has a large volume and a long industrial chain, and a one percent gap in systematic capability means a ten percent gap in sales volume and profitability.
Systematic capability is the most important capability we need to improve at present. We will have fewer tasks in launching new models in 2024, which will be a good window of time for us to improve our systematic capability.
The construction of systematic capability requires the active participation of all colleagues in the company, and each department should clarify the logic of the nature of the business and the key success factors, set clear goals, and utilize resources on the cutting edge.
Each department needs to be agile and responsive to changes in the market, so as to adjust the organization, personnel and inputs, business priorities, learn from the best practices of peers, and review the delivery results in a timely manner and make continuous improvements.
Please remind each other that Nio is not short of theories and concepts, and that we need to eliminate empty talk in our daily work and execute the direction that has been clearly defined and focus on action.
We need to strengthen our cost awareness and cost control capability. In the past few years, the company's business boundaries have expanded rapidly, and in the absence of perfect systematic capability, many projects have resulted in a waste of resources because of our understanding of the businesses were not in-depth.
We will firmly invest in the research and development of products and technologies and the construction of service infrastructure, but it requires a high degree of cost consciousness and cost control ability.
The company's resources are limited, and we are still suffering losses from our R&D and infrastructure investments, and need to continuously improve our financial performance in order to support the Company's sustainable growth. We have a responsibility and obligation to put every penny of our investors' and shareholders' money to good use.
Our departments, including R&D, supply chain, quality, manufacturing, sales and service, and administrative and support, need to be aware of the need to improve return on investment and the need for continuous optimization and cost savings.
In 2024, we need to be resolute in avoiding ineffective and inefficient investments and spending money where it does not create value for the company and its users.
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 that comes from user feedback.
Excellent companies achieve success in the marketplace with optimal investment of resources, and we need to set the highest fine management goals and execute them with determination.
Our journey is a marathon on a muddy road, and we can gradually take the lead by sticking to each step.
In 2024, let's focus on the construction of systematic capability, face the challenges, move forward firmly, and move up together.
Nio needs to put every penny of investor and shareholder money to good use, says William Li
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