- R&D costs are spread across multiple models, and greater scale has helped Nio reduce costs.
- Compared to the Onvo L90, the new ES8 has received more pre-orders within the same timeframe.
The third-generation ES8 still has gross margin under its current aggressive pricing, said William Li, founder, chairman, and CEO of Nio Inc (NYSE: NIO), emphasizing that survival is the most important thing for the company at present.
If prices remain high, it will be difficult to compete in the market, Li said at a media briefing held today regarding the new ES8.
The new ES8 has significantly lower costs than its predecessor, and it still generates a gross margin at this price point, Li said.
Nio unveiled the new ES8 yesterday and began accepting pre-orders. The large SUV is equipped with a 100-kWh battery pack, with a starting price of RMB 416,800 ($58,030) in pre-sales, including the battery pack.
This represents a reduction of RMB 139,200, or 25.04 percent, compared to the starting price of RMB 556,000 for the older 100-kWh version of the ES8.
Under the BaaS (battery as a service) battery rental plan, the starting price for the third-generation ES8 is RMB 308,800, lower than the RMB 428,000 BaaS starting price for the older ES8 with a 100-kWh battery pack.
In China's automotive market, the official launch price of a new model is typically lower than the pre-sales price.
In a research note earlier today, Deutsche Bank analyst Wang Bin's team estimated that the final starting price for the new ES8, including the battery, would be around RMB 399,000.
When asked how Nio reduced costs on the new-generation ES8, Li cited an example: the new ES8 uses less aluminum in its body but still maintains high safety standards.
Additionally, taking the 900-volt rear electric drive as an example, R&D costs are shared across multiple models, which also helps reduce costs, he said.
Cost reductions are also due to Nio reaching a certain scale, and some in-house developed technologies contribute to cost savings, he said.
Nio co-founder and president Qin Lihong said that compared to the Onvo L90, the ES8 has received more pre-orders within the same timeframe.
As before, Nio management did not disclose specific order information.
($1 = RMB 7.1829)
