Nio's Alps sub-brand will debut in the second quarter, with the first model launching in the third quarter and volume deliveries beginning in the fourth quarter.
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Nio (NYSE: NIO) today reported fourth-quarter 2023 financial results and held an analyst call afterward.
Here are the key takeaways from the call, with the most recent at the top.
There will be a new sales channel for the Alps brand, and Nio has already locked in enough resources.
Nio's target for the Alps sub-brand is to have a sales network of no less than 200 stores. The Nio main brand already has roughly 500 stores.
Nio gets 70 percent to 80 percent of its sales from Tier 1 cities and 50 percent from the Yangtze River Delta region.
In 2024, Nio will strive to reach lower-tier cities with a significant portion of its charging and battery swap infrastructure deployed in lower-tier cities to increase the experience and competitiveness in these areas.
From the current assessment, Alps can achieve the previously mentioned cost levels at a reasonable volume, not a particularly large delivery volume.
For a factory, 10,000 units a month is a reasonable volume.
Nio's R&D investment per quarter in 2024 will be approximately RMB 3 billion, consistent with 2023.
Nio's charging business is largely break-even, and 640-kW ultra-fast charging piles will begin to be installed in the near future.
The Nio ET9 will come with a 5C ultra-fast charging battery, and Nio is focusing more on battery life.
A car can have a lifespan of 15 years, so battery life is important, and Nio has done a lot of research in this area over the past few years.
Nio has addressed the issues of battery safety, charging efficiency, and ease of charging through the battery swap network over the past few years.
The company's next major priority is battery life, on which it has done a lot of research over the past few years.
The really important thing that is now becoming clearer is battery life, especially calendar life.
Battery swap helps to maintain the battery life and is a great ultimate solution to extend the life of the battery through operational means.
Nio will focus on the Chinese market right now but will not stop exploring the international markets. The company will enter some new countries this year, such as UAE.
Nio will stick to direct sales in China and use a more flexible and return-on-investment-focused approach in overseas markets. The company does not rule out partnering with third parties.
Nio will have the Alps brand cars this year and lower-priced models from another new brand next year. Nio will consider these in its strategy to enter other markets.
Starting later this year, Nio will sell models from both brands.
Nio-branded models, including those in the planning stage, focus on the premium segment of the market. There will be no cheaper models from the main brand than the Nio ET5.
Nio's main brand will care about gross margins and will not join the price war. Nio's second brand will prioritize deliveries over gross margins.
The second brand can leverage Nio's investment in R&D and infrastructure in smart and electric, rather than starting from scratch.
Nio's second brand is aimed at the home market, which will have more competition.
The Alps brand will have different products for different families and will be competitive accordingly.
The first Alps model will be a direct competitor to the Tesla Model Y, with a BOM (bill of materials) cost about 10 percent cheaper than Tesla's.
Alps' second car will be an SUV for large families, which will be introduced to the market next year.
Alps' third car is already in development, and it's too early to mention it.
Nio is confident that monthly sales will return to 20,000 units.
Nio's mass-market-oriented brand, codenamed Alps, will debut in the second quarter. The first model will be launched in the third quarter and mass delivery will begin in the fourth quarter.
Alps will have a separate sales network, but aftermarket will use part of Nio's network.
Nio's fourth-generation battery swap stations are compatible with different makes of vehicles, and most of the stations that will be added this year will belong to a shared network.
Alps' models will use the shared battery swap network, and Nio's models will be able to use those sites as well. It's like public and private clouds.
Nio Q4 earnings: Revenue beats estimates, gross margin falls short
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