Li Bin has completely gone all out

Author | Chai Xuchen

Editor | Zhou Zhiyu

Positioned as a high-end brand, Nio has unexpectedly become synonymous with cost-effectiveness.

On the evening of August 21, Nio's flagship SUV, the new ES8, opened for pre-sale, with a price range of 416,800 to 456,800 yuan. With the support of BaaS, the price directly dropped to 308,800 to 348,800 yuan. After announcing the price, the venue erupted in excitement, with shouts of "Blin Shen" filling the air.

It is important to note that this is a full-size SUV targeting the BMW X7 in the 500,000 yuan range. Compared to the previous generation, the new ES8 has officially reduced its price by a full 80,000 yuan, and the price after renting the battery has dropped by nearly 150,000 yuan. Moreover, this is just the pre-sale price; according to industry expectations, the official price of the new ES8 is likely to be below 400,000 yuan.

Industry insiders believe that if the recent Leidao L90 was Li Bin's "table flip," then the extreme pricing combined with Nio's extensive charging infrastructure will leave extended-range high-end models "with no way out."

Following the explosive sales of the Leidao L90, Nio plans to continue its offensive in the pure electric large three-row SUV market. Li Bin believes that the golden era for extended-range vehicles in the large three-row SUV segment has ended, and it is time to focus on pure electric vehicles.

The market reacted quickly; on the night of the launch event, Nio's U.S. stock soared, with an increase of over 10% at one point. The next day, Nio's president Qin Lihong revealed to Wall Street that since the pre-sale channel opened, orders for the new ES8 have surpassed those of the Leidao L90 during the same period. On the evening of August 22, Nio's U.S. stock surged again by nearly 15%.

Clearly, in order to regain its former glory and to achieve profitability in Q4, Nio and Li Bin are going all out. However, it is worth mentioning that the new ES8's "big move" is not a temporary measure due to market competition, but rather a long-planned "strategic move" by Li Bin.

In a post-meeting communication, Li Bin revealed to Wall Street that the pricing of the first-generation ES8 was significantly different from that of the ES6, resulting in a lack of products in the high-end core range of 400,000 yuan for the Nio brand. Although it was equivalent to a 400,000 yuan vehicle under the subsidy policy, the second generation deviated in its definition and cost targets, leading to an unsustainable reasonable gross margin.

Li Bin admitted that some internal mistakes were made objectively. The mission of the third-generation ES8 is to correct this error. From the project initiation, its positioning has been that of a large three-row SUV in the 400,000 yuan range. "From the first generation to the third generation, Nio has accumulated experience in R&D and product definition and has been continuously correcting its direction. It can be said that the price adjustment of the new ES8 is not a short-term response but a strategic return."

This means that Nio's current counterattack has actually been foreshadowed since the product initiation several years ago. The long-termism that Li Bin speaks of has finally reached a monetization moment. Li Bin revealed that he still holds several trump cards that have not yet been played, "We will launch new models such as the ES9 and L80 at the appropriate time, and we will also release several highly competitive new products in the future." After several years of setbacks in competition, Li Bin and Nio have finally staged a remarkable comeback.

However, Li Bin clearly stated that Nio is still a newcomer in the automotive industry. "Nio will not be complacent due to the temporary popularity of a certain model, nor will it feel like the sky is falling because of short-term difficulties. Looking back, every car company was in a growth phase at ten years after its establishment, and Tesla also faced many challenges in its tenth and eleventh years. There is no reason for us to be complacent."

"Maintaining a long-term mindset is fundamental to establishing ourselves in the automotive industry." After a fresh start, Nio is ready to embrace its new journey.

The following is a transcript of the dialogue between Wall Street Watch and Nio Chairman Li Bin, President Qin Lihong, and Vice President of Products Li Tianshu:

Q: From 600,000 to 400,000, where exactly did the cost savings for the new ES8 come from?

Li Bin: The use of aluminum has indeed decreased compared to before. In addition to material optimization, we have also reduced costs through platform research and technological innovation. For example, the 900V rear electric area serves as a company-level platform system that can be reused across multiple models, thereby spreading out costs. Self-research in chips has also saved a lot of expenses.

Research and development itself is an important means of cost reduction. On one hand, it involves collaboration with the supply chain, and on the other hand, it includes economies of scale, such as platform sharing, which can significantly lower the cost per vehicle. More importantly, the accumulation of R&D investment—such as lightweighting, which starts from first principles and achieves extreme optimization—can reduce material usage while ensuring performance, directly lowering costs.

Therefore, the benefits of R&D are not only reflected in the performance of intelligent systems but also in hardware such as chips and self-researched seating platforms, forming cost competitiveness. In the past, some technological investments may have been made too early before the industry reached scale; now we have truly entered a phase of economies of scale and cost optimization.

Q: Given that the turning point in the "large three-row" SUV market has arrived, what are the core advantages of the L90 and the new ES8 compared to fuel or other energy competitors?

Li Bin: Product combination: The LeDao L90 and the new ES8 cover the price range of 170,000 to 450,000 yuan, fully loaded with features, providing emotional value and technological strength. System advantages include a nearly 20 billion yuan deployed battery swap network, a technology base that is chargeable, swappable, and upgradable, as well as seven years of experience in intelligent electric vehicles across three generations, which together form a barrier.

Pricing strategy: We have set high standards with dual pricing anchors for battery rental and vehicle purchase, unafraid of price wars. True competition is system competition, not just point-based price reductions; market judgment: whether pure electric can accelerate the replacement of other energy forms in the large three-row SUV segment depends on market feedback.

Q: Can it be understood that the previous pricing of battery swap models had a premium, and the adjustment of the new ES8 is a correction? Is this price reduction aimed at addressing short-term pressure, or is it a strategic move?

Li Bin: Making cheap cars is not difficult, but the real challenge is to create intelligent electric vehicles that offer a good experience, high safety, and leading technology under the premise of innovation and controllable costs. In the past, we did have some issues in the R&D and cost structure of the second-generation products, and objectively, we made mistakes At that time, the pricing of the ES8 was significantly different from that of the ES6, resulting in a lack of products in the high-end main segment around 400,000 yuan. Although the first-generation ES8 was essentially equivalent to a 400,000 yuan model under the subsidy policy, the second generation deviated in definition and cost target setting, making it difficult to sustain a reasonable gross margin.

The mission of the third-generation ES8 is to correct this mistake. From the project initiation, its positioning has been a large three-row SUV in the 400,000 yuan range. The pricing of this generation of products has returned to its rightful position, hitting the market and user needs.

From the first generation to the third generation, Nio has accumulated experience in the R&D and product definition process and has continuously corrected its direction. It can be said that the price adjustment of the all-new ES8 is not a short-term response but a strategic return.

Q: Will the price drop of the all-new ES8 weaken Nio's brand premium ability?

Li Bin: Nio's current average selling price is still above the BBA equivalent range, and the all-new ES8 has not lowered the brand baseline. Previously, due to cost factors, the pricing of the ES8 deviated from a reasonable range, affecting efficiency. Now that we have returned to rational pricing, it is beneficial for both sales and the long-term value of the brand.

Q: How to explain the value of the Leidao L90 compared to the Nio ES8 to users?

Qin Lihong: The L90 and ES8 are comparable in size, seating capacity, and many physical functions, but the Leidao L90 emphasizes fully meeting family usage needs, while the Nio ES8 places greater emphasis on high-end experiences, including material design, luxury feel, technology sense, and the emotional value conveyed.

If users mainly focus on daily family use, the L90 is already sufficient. However, if they also need to consider social and business occasions and hope the vehicle itself becomes a social identity label, then the ES8 would be a better choice.

Li Bin: Nio's product design logic does not divide models according to price ranges, nor does it simply define the brand by price. Whether it is the entry-level model priced at 119,800 yuan or the ET9 priced over 800,000 yuan, the underlying logic is consistent, oriented towards the actual needs of users, providing solutions that match different scenarios.

Q: What is the order situation and the upcoming product iteration rhythm?

Qin Lihong: Since the press conference yesterday, from the end of the release until now, the number of orders for the all-new ES8 has already exceeded the performance of the L90 last month. This indicates that users recognize the positioning, product strength, and pre-sale price of the all-new ES8, which can be seen as a return for our long-term commitment to investment.

However, this is just the beginning; the real challenge lies in the subsequent execution. We will ensure that the formal launch, release, and delivery work are done well, ensuring that the all-new ES8 can smoothly continue the initial heat of the release.

Q: Can you reveal some information about production capacity?

Qin Lihong: The ES8 is produced in our new factory, and the new product is launched simultaneously with the new factory, making the preparation work relatively more challenging. But we are confident in making preparations in all aspects, as there is still more than a month until the official release and delivery According to the current order situation, we are fully confident in ensuring production capacity and will not let the delivery speed affect momentum after the vehicle is launched. Over the past 20 days, everyone has seen the rhythm of the Lido L90, and what Lido can achieve, Nio can certainly achieve as well.

Q: Will the technology of the new ES8 be applied to higher-end SUVs?

Li Bin: Technologies such as the 900V electronic and electrical architecture, self-developed chip "Shenji," operating system "Tianshu," intelligent system "Xuesong," as well as battery and electric drive technologies, already possess a high degree of universality and platformization, allowing them to be shared across multiple models.

As for higher-end models like the ET9, many people are concerned about whether it will fully inherit the functions of the ES8. It should be emphasized that the higher the technology level (such as BaaS architecture, redundant power supply systems, etc.), the higher the cost. A redundant power supply system alone can cost tens of thousands, which could translate to a price increase of over a hundred thousand. Therefore, we cannot expect all high-end features to be applied to lower-priced products.

In our product design, we always focus on capturing users' high-frequency needs and core experiences, including appearance, interior, comfort, and safety, rather than equipping everything. Therefore, the third-generation development cannot be equated with the configuration of the ET9, as this is determined by cost and product positioning.

Q: For models like the all-new ES8, what plans does Nio have for its social attributes or community culture?

Li Bin: As a high-end brand, although some people feel the car prices are high, we have received overall high recognition from design, technology, safety to service. The core of a high-end brand lies in two points: first, the spirit of continuous innovation; second, service that exceeds user expectations throughout the entire process. Although there is room for improvement in our services, user satisfaction is already at a high level within the industry. These characteristics form the foundation for Nio to be defined as a high-end brand and determine our reasonable value range.

From a market perspective, our pricing logic has always been anchored within the range of high-end brands like BBA. Compared to these brands, Nio's product prices are generally higher, but this reflects our positioning on product strength and user experience. The return of the all-new ES8 actually brings Nio back to a reasonable and comfortable high-end pricing range. This is not a temporary market behavior, but a "repositioning" of the brand.

From a longer-term perspective, we are not a super luxury brand, but rather positioned as "a high-end brand with volume." This means we want to maintain reasonable pricing, allowing more users to find a balance between high-end experience and rational pricing. Looking back at the pricing of the first-generation ES8 in 2017 and 2018, the starting price exceeded 400,000 yuan, which was indeed a bold attempt among Chinese brands at that time. But it was that group of innovative users who chose to support us, laying the foundation for the Nio brand.

Qin Lihong: In the future, the all-new ES8 will continue to strengthen this "socially recognized attribute." We will also shape the product image by showcasing typical user scenarios, such as entrepreneurs, scholars, and executives, who represent the backbone of innovative spirit and social responsibility The characteristics of these groups are exactly the brand values and user images we hope to convey through the ES8.

Q: At this point, how does the internal team view Nio's current development stage, and what will be the focus of future work?

Li Bin: Nio has been established for over ten years, and in the automotive industry, we are still considered a very young player. Looking back, every car company was in a growth stage at ten years old; for example, Tesla faced many challenges in its tenth and eleventh years. There is no reason for us to be complacent.

Most Chinese automotive companies are led by first-generation entrepreneurs, such as BYD, Geely, and Great Wall. They all work hard, but in different directions: some focus on manufacturing, some on marketing, while Nio focuses more on R&D and infrastructure development.

The road ahead is still long; the automotive industry is not a marathon with an endpoint, but rather an endless competition. No company can draw conclusions based on temporary achievements. It is common in the industry for a company to make hundreds of billions in profit one year, only to face huge losses the next. This is prevalent in the automotive sector. Therefore, Nio will not be overly pleased by the temporary success of a particular model, nor will we feel that the sky is falling due to short-term difficulties. Maintaining a long-term mindset is fundamental to establishing ourselves in the automotive industry.

Q: How long can the "low opening, large front trunk" SUV body shape used in the L90 and the new ES8 maintain its technological exclusivity?

Li Bin: The iteration speed in the Chinese market is indeed very fast; typically, leading designs will be caught up within 18–24 months. However, Nio has formed systematic advantages, such as a charging, swapping, and upgrading energy replenishment system, as well as an integrated smart system. These are not single-point innovations but systemic capabilities. Therefore, the real competitive barrier lies in the system, not in a specific body structure. We will continue to iterate, keep pace, and strive to remain in the leading group.

Q: Does Nio have new product plans for the fourth quarter of 2024 and 2025? Will Le Dao and the Nio brand continue to use the "function upgrade + price range combination" strategy to launch new cars?

Li Bin: Yes. We will launch new models such as the ES9 and L80 at appropriate time points, and we will also release several highly competitive new products in the future. This "quantity-price combination" strategy has been proven effective in niche markets, and in the future, Le Dao and the Nio brand will continue to use and further optimize this strategy to continuously launch new models.

Q: Over the past decade, Nio has invested over 60 billion yuan in R&D. In the context of a more mature smart electric vehicle industry, will the company adjust its pace or strategy regarding R&D investment?

Li Bin: Nio has cumulatively invested 60 billion yuan in R&D, and I cannot say that every penny has been used efficiently. Because whether it is vehicle development or individual technology projects, it is difficult to fully predict at the outset whether they will achieve the expected results; ultimately, it depends on market performance and sales These R&D funds are mainly spent on three aspects: first, the research and development of underlying technologies, which is the most fundamental investment, benefiting not only Nio but also the entire industry; second, the R&D of platform core components, such as chips, electric drives, battery packs, seat platforms, etc., which can be reused across multiple products; third, the development of software functions for specific models and applications, including NOMI, ADAS, etc.

We will not reduce the scope of R&D but will lower investment and increase output through efficiency improvements, making R&D leaner and ensuring that every penny brings clear value. This is also the R&D management approach we have been promoting internally since the second half of last year.

Q: How far are we from the Q4 profitability target?

Qin Lihong: 2025 is the "concentrated payoff year" for Nio's years of R&D and infrastructure investment, and it is also a critical test of our system capabilities. With just over a month left until Q4, the company is making every effort to achieve its profitability target. Every day we strive to turn thoughts into actions and actions into reality.

Q: This year has seen a concentrated explosion of technology, and the company has proposed a Q4 profitability target. There are concerns that in 18-24 months, there may be signs of "funding tightness leading to a disruption in R&D." How will Nio avoid this?

Li Bin: The efficiency improvement work from last year has made the organization leaner and more agile, ensuring that long-term technological investments are uninterrupted. Historical experience shows that the worst decisions are often made at the best times. Therefore, we always maintain a state of pressure, making prudent decisions and focusing on the right things. Systematic investments have been pre-positioned, and future products and technologies will not be interrupted.

Q: Nio is now implementing the CBU management mechanism. Can you explain how internal R&D projects evaluate their return on investment?

Li Bin: Under the CBU management mechanism, we set different return cycles and evaluation methods based on the different types of R&D projects. Some projects require results within six months, while others may take one to three years to realize their value. Each R&D project must clarify the expected ROI at the project initiation stage and conduct a closed-loop evaluation at the completion stage to ensure that R&D investments correspond to the financial statements. The final standard is only one—money, meaning whether it can truly help the company reduce costs and increase efficiency, sell more cars, or enhance profits.

Q: It has been predicted that 2025 and 2026 will be the decisive years for pure electric vehicles in China. Now that the Lido L90 and the new ES8 have been launched, the competition between pure electric large three-row SUVs and extended-range SUVs has begun. How long do you think this competition will last?

Li Bin: Recently, the popularity of pure electric large three-row SUVs in the market has been very high, which is certainly not just due to the launch of the Lido L90 and the new ES8. An interesting phenomenon is that manufacturers that sell extended-range vehicles particularly well are also actively launching pure electric SUVs and increasing their investments in infrastructure.

Near the base camp of Mount Everest, several leading extended-range vehicle manufacturers have already built charging stations, and the scale is not small. This indicates two issues: first, pure electric vehicles can almost go anywhere; second, extended-range vehicle users actually rely on charging, rather than solely on refueling This means that the loss of pure electric experience is rapidly diminishing, and in some scenarios, it even surpasses that of gasoline vehicles. For example, if you have a charging pile installed at home, you no longer need to go to a gas station; on highways, the more than 1,000 battery swap stations along National Highway 318 make long-distance travel even more worry-free than with fuel vehicles. In regions like Xinjiang and Tibet, electricity prices can be as low as 0.25 yuan per kilowatt-hour, making the cost of driving a pure electric vehicle far lower than that of a fuel vehicle.

These real usage environments are changing users' choice logic. Therefore, I believe that the user experience benefits of pure electric large three-row SUVs have fully surpassed those of range-extended, plug-in hybrids, and even fuel vehicles. This is why we emphasize that the "turning point" has arrived. The golden age of range-extended SUVs is passing, and the era of pure electric SUVs is coming.

This is not just the result of our company’s efforts, but a consensus across the entire industry. If there are still executives from car companies today saying that pure electric will not replace range-extended vehicles, I would find that even more surprising.

Q: What do you think about the phenomenon that both US and Hong Kong stocks rose about 11% after the release of the ES8? How long do you think this rise, reflecting investors' confidence in future profits, can last?

Li Bin: The capital market itself fluctuates, and perceptions and judgments about companies will vary at different stages. In the long run, investors ultimately care about the company's fundamentals—growth capability and profitability. As long as the company continues to deliver on growth and profitability, confidence will be maintained, and vice versa.

We hope to show investors two key capabilities: product definition and R&D capability—truly understanding and meeting users' unmet needs, combining systematic innovation with user demands to create products that users are willing to pay for and that are competitive; operational efficiency—completing the entire chain of R&D, supply chain, sales, and service operations in a more efficient manner. As long as the product strength is strong and operational efficiency improves, profitability will naturally follow.

Q: Under the drive of technological progress, how does Nio translate "emotional value" into specific functions and hardware?

Li Tian Shu: From the first generation of products, we have prioritized "human feelings" in our definitions. The entire launch event for the ES8 was divided into eight chapters, with the last chapter specifically reserved for emotional value, indicating that its weight often surpasses that of simple configuration stacking.

Methodologically, we break down user value into 21 dimensions: 11 emotional values, including sense of pattern, showcasing taste, personal expression, demonstrating strength, etc., and 10 functional values. After breaking down the needs, we then apply them to every touchpoint and detail. Therefore, physical functions and emotional functions are not simply parallel; rather, we first lock in the emotional goals and then work backward to determine which physical means are needed to support them.

The statement "the higher the emotional value, the more niche the product, the higher the cost" is debatable. Emotional value does not equate to high cost or niche products. Take NOMI's "AI hat" Easter egg as an example; the material cost is extremely low, yet it received unexpectedly positive feedback due to emotional resonance. The key lies in whether a systematic approach is used to break down and quantify emotional value and find a cost-controllable path for implementation We have internally verified that placing the emotional dimension at the forefront of product definition in the early stages can actually reduce redundant costs caused by positioning deviations later on. The core of high-end brands is not "expensive," but "precise"—accurately meeting the dual needs of users' emotions and functionality.

Qin Lihong: Emotional value itself does not have high or low distinctions. More than 20 years ago, when I was making personal care products priced at over two yuan, I could convey high emotional value through a sense of security; today, the lowest-priced firefly product does the same. Its shape, attitude, and collision performance together constitute the emotional density of "small car, big energy." The Beetle's emergence back then sparked heated discussions and is also a case of emotional value driven by design.

We firmly believe that products at any price point possess both physical and emotional attributes simultaneously, just in different proportions; the cost depends on the orientation and investment ratio of emotional value, rather than being inherently expensive. Locking in emotional orientation during the product definition phase can avoid redundant costs later on and may actually be more economical.

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