Li Bin vows to win the final battle

In just 180 minutes, Nio has pushed the duration of its pre-sale event to a new extreme with the launch of a new car, attempting to announce the arrival of a "Game Changer."

On the evening of July 10, the long-awaited flagship L90 took the stage, ready to dive into the fiercely competitive large three-row SUV market. This SUV, which Li Bin has high hopes for, aims not only to shake up the family vehicle segment but also represents Nio's ambition to rewrite its destiny.

It is important to note that traditional large three-row SUVs have always been the first choice for family vehicles. Before the L90, this segment was crowded with competitors, including Aito M9, Denza N9, Li Auto L9, Deep Blue S09, Lynk & Co 900, and Galaxy M9, all vying for the flagship title.

The intensive launch of these models has not only triggered a buying frenzy among consumers but also marks the comprehensive rise of the sub-market for large six- and seven-seat three-row new energy SUVs. According to data from the Passenger Car Association, in the first quarter of this year, the sales of six-seat SUVs surged by 127% year-on-year, far exceeding the overall market growth rate.

This phenomenal growth is driven by the concentrated release of family users' demand for multi-scenario travel. In Li Bin's view, the L90 will become a "Game Changer," backed by two powerful advantages.

The first advantage is the "large space" card. In three and a half hours, Li Bin mentioned "large" over three hundred times and recited dozens of times the phrase "every seat is VIP, six people and ten boxes with no pressure, luggage can be stored in the front and back." In a post-event interview, he revealed to Wall Street Insights that extensive market research showed that large three-row users still have unmet pain points, primarily space anxiety.

Currently, the "9 series" flagship large three-row SUVs in the market mainly use hybrid and range-extended powertrains. Due to the need to install both electric and fuel power systems, no product can simultaneously address the pain points of "uncomfortable third row," "fits but doesn't store," and "can't park and open the trunk" in family travel scenarios. The L90, which eliminates the internal combustion engine, fundamentally resolves this issue.

It can be said that large space is the primary necessity for large three-row SUV users, which is the first consumer perception Li Bin has established for L90 users. For family users, the anxiety of refueling during long-distance travel is another core pain point. The L90 can firmly stand against range extension, thanks to the confidence provided by the battery swap system.

Just a day before the L90 pre-sale launch event, Nio's 1000th highway battery swap station went into operation, completing a nationwide network of 9 vertical and 11 horizontal highway battery swap stations covering 16 major urban clusters. At the event, the first model to complete a swap at the 1000th highway battery swap station was indeed the L90.

To some extent, the L90 and battery swapping are strongly coupled. Li Bin revealed that by the end of May this year, the battery swap for Lido brand models accounted for 60% of Nio's overall battery swaps; internal research data from Nio also showed that 60% of users chose Lido because they could swap batteries, and the expansion of the battery swap station network greatly aids Lido's sales In the eyes of industry insiders, unlike Nio's high-end positioning of three to four hundred thousand, LeDao's focus on family users and high cost-performance labels creates a differentiated advantage, making it more attractive in third and fourth-tier cities. The battery swapping capability gives LeDao a significant advantage that sets it apart from all other brands. This is also the reason why Shen Fei, the former head of Nio Energy, took over LeDao.

With the support of battery swapping, the LeDao L90 has also thrown out its most powerful "nuclear bomb"—the price tag, with a starting price of 193,900 yuan after BaaS, forcing competitors to reconsider their product pricing ranges.

It can be said that the LeDao L90, which directly addresses major user pain points, fills the current market gap for large three-row pure electric SUVs. Moreover, the LeDao L90 leverages the advantages of pure electric technology and Nio's integrated technological innovations, becoming a strong disruptor.

Indeed, Nio really needs a blockbuster right now. The military order to turn a profit in Q4 still stands, and to some extent, the L90 will determine the direction of Nio's fate. At this press conference, everyone also saw Nio and Li Bin's willingness to "listen to advice" and make changes.

This time, the L90 focuses more on user scenarios, striving to resonate with user needs. This is quite important for a new brand; once LeDao is linked to anxieties about space and energy replenishment, its brand moat will be established.

Furthermore, the L90 does not intend to repeat the mistakes made by the L60. On the eve of the launch at the press conference, 540 display vehicles, over 400 stores, and roadshow locations covered 141 cities. This comprehensive and systematic resource tilt means that LeDao L90 is preparing for a well-planned battle.

Clearly, since gradually returning to a growth trajectory in the second quarter, the entire strategic shift of Nio is taking effect. Finally, with the support of LeDao, can Li Bin and his Nio fulfill their promise by the end of the year and achieve a remarkable turnaround?

Below is the transcript of the dialogue between Wall Street Journal and Nio Chairman Li Bin, Nio President Qin Lihong, and LeDao President Shen Fei:

Q: Many models now use high-end versions to drive gross profit, while low-end versions drive volume, but LeDao has directly priced at 279,900 yuan, which has reached the most mainstream price range. Where will its sales come from?

Li Bin: LeDao aims to create mainstream products for high-quality family use, so it should enter this price range. I believe this is LeDao's brand mission.

As for the vehicle's cost, it is mostly determined when the vehicle is defined. The pursuit of lightweight design in the LeDao L90 means a reduction in costs. Nio's cost target design follows a route of using technological research and development to reduce costs, ensuring competitiveness while keeping costs controllable. This is also what we hope everyone will pay more attention to—the value behind integration, lightweight design, and miniaturization.

Q: How much profit margin is left in the L90's pricing, and how to avoid internal competition within the Nio brand?

Li Bin: There is definitely still a gross profit. We are calculating our accounts quite meticulously now, indeed spending money on users and in places that can create user value. Of course, we have made many trade-offs in some areas, such as not using particularly large batteries, and the seats and electric drive are also reused within Nio's system The positioning of Ledo is very clear, which is to create high-quality cars for family users. As a high-end brand, Nio's main competitors are BBA. In the automotive industry, it is very reasonable to launch a more tailored brand for different price ranges and user groups.

Q: What efforts have been made for Ledo L90's highly efficient channel strategy?

Li Bin: We have indeed learned many lessons from the past. Now consumers want to see the car in real-time. Previously, we had many habitual thoughts, but now we listen to advice. In May and June, Ledo was able to achieve counter-cyclical growth even with team downsizing, reflecting a significant improvement in the combat effectiveness of the entire Ledo marketing team. Later, I reviewed with Li Hong and Shen Fei, and the release conference yesterday was still too long. I was worried that users who were supposed to place orders might have fallen asleep, but when I checked this morning, I saw that orders had increased rapidly.

Q: With Xiaomi entering the electric range market, has Nio considered producing larger batteries to increase range?

Li Bin: As of today, no mass-produced electric vehicle has surpassed the performance of our 150 kWh battery pack in terms of pure electric range. So why is there less discussion about the 150 kWh battery now? Because the battery swap system is good enough, many people feel that the 75 kWh battery is sufficient, which is the real choice of users. Our product decisions must first consider whether they have value for users and the company. The Ledo L90 has a range of 605 kilometers, using an 85 kWh, 440 kg battery. The thinking behind this product strategy is very important.

Q: Are there differences between users who buy pure electric vehicles and those who buy range-extended vehicles? What is Ledo L90's pricing strategy for second- and third-tier cities?

Shen Fei: I think everyone should buy pure electric. Why still buy range-extended? The L90 is a "transformational work," pure electric gives you better space and experience, and this era of anxiety has passed.

Li Bin: Last year, Shen Fei and I spent 40 hours in Kashgar and encountered 7 groups of Nio users from across the country, including users driving the first-generation ES8 with a 350 km range who self-drove to Kashgar. I asked them, "Aren't you worried about charging?" They said it was completely fine.

In everyone's imagination, it seems reasonable to drive a range-extended vehicle on highways to Xinjiang or Tibet, but why are these range-extended vehicle owners charging? Xinjiang is vast, the distance from Urumqi to Kashgar is 1600 kilometers; the cost difference between oil and electricity is at least over 1000 yuan. Moreover, during the valley electricity period in Xinjiang, one kilowatt-hour is only 0.25 yuan.

Returning to the real scenario, China's infrastructure is much faster than we imagine. Pure electric travel may not be as convenient as gasoline vehicles, but as long as we factor in "usage costs," it won't be a financial burden.

Qin Lihong: The completion of the 1000 highway stations we did the day before yesterday is also a solution for pure electric long-distance travel. Now, pure electric travel can be done without worries, without having to bear unnecessary systems that squeeze space inside the vehicle Li Bin: Yesterday we talked about lightweight technology. A current trend in range-extended vehicles is to make the battery larger, reducing the frequency of using the engine and range extender. Some range-extended vehicle owners may only use the fuel system once or twice a year, but they still have to carry this powertrain around every day.

Shen Fei: In the past, when going out, we had to carry a lot of food in our backpacks, but now with the development of the food industry, fast food and takeout are everywhere, so there's no need to bring our own food anymore; the same goes for energy replenishment. Now it's more convenient to recharge, which reduces other demands. We believe that in the upcoming market, most will definitely choose pure electric.

Question: How do you interpret the phrase "revolutionary work" in L90?

Li Bin: "Revolution" essentially refers to creating user value. We conducted research on over 2,700 users to analyze the unmet pain points of large third-row users. The conclusion was that space is still insufficient and there is still anxiety about energy replenishment. The experience goal for space should be: every seat is VIP, accommodating six people and ten boxes without pressure, with luggage space in both the front and back.

Based on the most advanced technological innovations and China's energy replenishment infrastructure, we provide a foundation for changes in the market landscape and product innovation for large third-row SUVs.

Question: The positioning of Li Auto's i8 and LeDao's L90 is similar; what are the respective advantages of both?

Qin Lihong: Both products aim to provide a superior pure electric experience to end the "turning point" for range-extended large SUVs, and on this point, we stand together. As long as you choose pure electric, we are teammates. I also wish the i8 great sales.

Question: Previously, an internal monthly sales target of 25,000 units was set for LeDao; how confident are you now?

Li Bin: We have definitely made sufficient preparations. The demand in the first month is something everyone is not particularly worried about; the key is how to maintain hot sales continuously, which is a significant challenge for the entire industry now. The product competitiveness of the L90 is already there. Whether our channels, frontline colleagues, and communication teams can maintain this heat is a considerable challenge for every brand.

Question: Is the current pre-sale volume of the LeDao L90 within internal expectations or has it exceeded expectations?

Shen Fei: Since it is a pre-sale, everyone certainly has expectations for the final price, so our sales expectations will be a bit higher. In fact, it has not yet reached my expectations. Delivery is a systematic issue; just because the L90 has been released and the channels have put the cars in the showroom does not guarantee future sales and deliveries. I think we need to continue to work hard in all aspects of preparation, as there are still many issues that need improvement, and we need to be more grounded in doing many detailed tasks.

Question: What considerations does the internal team have regarding the release rhythm of the LeDao L90? Will it achieve simultaneous launch and delivery?

Qin Lihong: The Shanghai Auto Show showcased some functions of the L90. After that, we will use the progress of the entire charging and swapping infrastructure to enhance the travel experience for large third-row SUVs, alleviating some users' anxiety about range, and then provide a comprehensive technical interpretation and product explanation for the L90 The press conference yesterday was quite lengthy, but we did not sacrifice quality, and there were still some things that we did not have time to communicate. The display vehicle for the LeDao L90 has already been synchronized to the stores, dynamic test drives will begin on July 23, and there will be an official product launch at the end of July, with large-scale nationwide deliveries starting on August 1.

Li Bin: The display vehicle had already arrived at the store before this press conference. If we wanted to, we could deliver it on-site on the day of the press conference. We also listened to advice this time.

Question: What is the follow-up delivery and production capacity planning for the L90?

Li Bin: We have been working with our partners on the supply chain, and the ramp-up and volume increase for the L90 are in an active preparation stage. Yesterday, the display vehicles were already in place at over 400 of our stores. Both the vehicle manufacturing and the production capacity of our component partners are sufficient.

Question: How is the delivery plan for the 6-seater and 7-seater LeDao arranged?

Li Bin: The delivery of the large 7-seater will be later than that of the large 6-seater. Initially, we will prioritize the production capacity to ensure the delivery of the 6-seater version.

Question: The 85-degree battery pack for LeDao was not a main seller before; will the battery stock at the battery swap stations keep up?

Shen Fei: We will definitely try to ensure that. Initially, the stock of 85-degree batteries will not be as much as after the full rollout, because we will start with a small amount of batteries at each station, and as the number of users increases, we will continue to add more. At the beginning, users of the L90 may feel that the stock of 85-degree batteries at the swap stations is not very high, but this quantity will quickly increase.

Qin Lihong: There is no need to worry about whether there are batteries at our swap stations. Currently, the battery storage rate in the 3,400 swap stations nationwide has just exceeded 50%, and I have plenty of room for adjustment.

Question: What is the consideration for not equipping the L90 with Nio's self-developed chip?

Li Bin: The Shenqi chip is the world's first automotive-grade 5nm intelligent driving chip, and its production capacity is indeed limited. For the time being, it will mainly be used in the Nio brand. The supply of NVIDIA's Orin X is relatively sufficient, which is actually a supply chain strategy.

Another consideration is that most of Nio's current vehicles are based on the Orin platform, which is very important for our entire data function closed loop and collective intelligence system. Using the same chip architecture also allows the intelligent driving of LeDao to quickly reuse or run through the entire data closed loop, which is also a consideration of the technical route.

Question: For existing users, how should they choose between the LeDao L90 and the Nio ES8?

Qin Lihong: The LeDao L90 is a demonstration of Nio's capabilities. Based on this capability, we will push the next generation Nio ES8. The positioning and corresponding value of the ES8 are absolutely worth more than its price. The needs of the two groups are different. This year's NIO Day is tentatively scheduled for late September, and we will consider communicating more information about the ES8 to users in advance Li Bin: If you want to buy a large three-row SUV, whether it's the LeDao L90 or the third-generation NIO ES8, both are definitely worth it. Everyone's preferences and vehicle needs vary. So if you feel that the LeDao L90 is sufficient, then hurry up and place your order; if you think there's no rush, just wait for the third-generation NIO ES8. I think this is actually an easy decision to make.

Question: One major effort direction for founders in the automotive circle now is to provide emotional value to everyone. What is NIO's thinking on this?

Li Bin: It's fine for products to provide emotional value, but as founders, we really can't provide emotional value. As a founder, I still need to face the public more and clarify that this is my responsibility for NIO. For example, I have been hosting the ET9 salon, and we have already held sixteen or seventeen sessions. I still want everyone to see the real NIO and our efforts.

Question: The layoffs at NIO have been ongoing. Will this affect morale? How does the internal team view the market competition in the second half of the year?

Shen Fei: The personnel team needs to be continuously adjusted to match the current strategy and market competition. At least at LeDao, morale is getting higher, sales are increasing, and new models are being released.

Li Bin: This year, the entire company is promoting basic operational units, internally referred to as "organizational transformation centered around user value creation." There are a few points: one is to focus on creating value for users and not to engage in activities that do not create value for users; the second is full participation in operations, from frontline fellows to stores, regional companies, R&D projects, and marketing activities, we must first ask about ROI.

We are breaking down the entire company's operational reports to frontline operational leaders. Based on these two foundations, we will promote the entire organizational transformation. During this process, some colleagues have left the company, both voluntarily and involuntarily, and we are very reluctant about that.

But our current responsibility is to do a good job with the company and show our supporters that NIO can rely on its own abilities to rise from the low point. We still have confidence in this. In the past few months, the sales of the LeDao L60 have increased against the trend, and yesterday the LeDao L90 also received positive feedback from everyone. Recently, the NIO brand has also stabilized its footing, and everyone can see that NIO is moving in a positive direction.

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