With ES8 production capacity ramped up, is Nio back in the C-position camp?

Author | Chai Xuchen

Editor | Wang Xiaojun

NIO's direction is quietly changing.

Finally, NIO has entered the 40,000 monthly sales club. In October, 40,397 new cars were delivered, nearly doubling year-on-year. That month, both NIO and the Ladao brand contributed over 17,000 units. It can be said that after experiencing an adjustment period in the first half of the year, NIO is strongly returning to the fast lane of growth, back in the spotlight of the new forces TOP sequence.

The market's view of NIO has always been extremely polarized. On one side are the loyal fans' full support, while on the other side are the incessant reports of losses. Even Chairman Li Bin candidly stated, "If NIO doesn't perform well, users will feel embarrassed."

At present, NIO has regained "face" for car owners and for itself. The main driving force behind this is the new ES8 and the Ladao L90, these high-end flagship products.

The L90 delivered 22,000 units in two months since its launch, setting a record for the fastest delivery of pure electric large SUVs, and bringing pure electric large three-row SUVs into the mainstream car market. If the L90 has caused NIO's sales to soar, then the explosion of the new ES8 has made the sales figures more valuable.

On October 31, NIO delivered its 10,000th new ES8, achieving this milestone in just forty days, setting the record for the fastest delivery of pure electric models priced over 400,000 yuan, and the new ES8 has consequently become the sales champion among pure electric large three-row SUVs.

From the sales trend chart, it can be seen that with the delivery of the L90 and new ES8, NIO's sales have drawn a steep growth curve after August, climbing from 20,000, 30,000 to last month's 40,000 units. And this growth is far from over.

Recently, NIO executives revealed that the delivery of the new ES8 will further accelerate, with production capacity expected to increase by 70% compared to October. Following this trend, it is very likely that NIO will reach a monthly sales peak of 50,000 units in December.

This "delayed" breakthrough is rewriting the competitive landscape of China's high-end pure electric market. However, what the capital market loves to see is this kind of "resurrection" story. What Li Bin needs to do is to make everyone believe that NIO's giant ship has completely changed its course.

Returning to the C Position

"The demand for the new ES8 is better than we originally expected. If you place an order now, delivery will be in April next year, which means the first quarter production capacity for the ES8 is already full."

Two weeks ago, Li Bin revealed the "explosive orders" situation of the new ES8 at a high-level NIO meeting, mentioning that the conversion rate from large orders to locked orders for this flagship SUV has significantly improved compared to before. Li Bin also set a "military order" for December, aiming for ES8 production and sales to exceed 15,000 units.

The momentum of the new ES8 is only increasing. Just at the beginning of this month, NIO executives updated their expectations, stating that the company aims to further expand the production capacity of the new ES8, striving for more deliveries than 15,000 in December.

If the popularity of the Ladao L90 proves NIO's ability to create hits in the mainstream market, then the new ES8's "over 10,000 in just 40 days" has completely solidified NIO's "king status" in the high-end pure electric market above 400,000 yuan It should be noted that in the electrification transformation, although new forces are emerging one after another, there are very few models that can truly establish a foothold in this price range and achieve "explosive sales." Especially in the market with an average price of over 300,000 to 400,000 yuan, there are very few models that can maintain stable sales of over 10,000 units, with Aito M8, M9, Mercedes-Benz E-Class, and Audi A6L being the rulers of this area.

With the push of the new ES8, Nio is also about to secure a place in this segment, which means that Nio has finally untangled the "deadlock" between high-end and volume.

Looking back, on the night of the new ES8's release, the Nio app experienced a brief outage due to an influx of locking order users. Within 10 days, 150,000 people participated in test drives, and some users even queued late at night to experience it. From "Binzi" to "Bin Ge" to "Bin Shen," after the official launch of the new ES8, netizens expressed their emotions with simple titles, reflecting the strength of Nio's products.

The overall dimensions of the new ES8 reach 5280x2010x1800mm, making it the largest pure electric SUV in the Chinese market to date. Among the flagship SUV product lines of luxury brands, the overall dimensions of the BMW X7, Audi Q8, and Mercedes-Benz GLS450 are inferior to the new ES8.

Through highly integrated three electric systems, the new ES8 offers a 230L electric front trunk and a rear trunk with a large sunken space, achieving a loading capacity that can accommodate 6 people and 12 boxes without pressure.

Industry insiders pointed out to Wall Street News that for a long time, the ES8, as the flagship product in Nio's SUV lineup, had business as its most important attribute. However, the new ES8's transformation in space has introduced the concept of a second living room, making it possible to compete with mainstream MPVs.

Shifting from a business positioning to "suitable for both home and business," Nio has let go of its obsession and won the market with a pragmatic product definition.

It is worth mentioning that all the functions on the new ES8 are not simply piled up but are designed to serve emotions. This means that Nio has skipped the rough period of creating a sense of high-end through simple configuration stacking. This is key to the new ES8 successfully expanding its user funnel towards family users.

Finally, the trump card played by the new ES8 is the price tag—the BaaS plan has an entry threshold of less than 300,000 yuan, which is more than 120,000 yuan lower than the previous generation model, directly bringing high-end pure electric large three-row SUVs into the consumption vision of ordinary families.

Increased configuration and reduced prices are a "combination punch" that hits the mark. However, this is not simply a price war but the result of Nio's self-research in technology and economies of scale. Its independent research and development of core components has become the key to cost optimization.

The new ES8 is equipped with the Shenqi NX9031 intelligent driving chip, replacing the four NVIDIA Orin-X chips used in the previous generation model. Li Bin revealed to Wall Street News that under the premise of equivalent computing power and better performance, the cost per vehicle has been reduced by 10,000 yuan.

More importantly, the accumulation of research and development investment—such as lightweight design, which achieves extreme optimization from first principles, can reduce material usage while ensuring performance, directly lowering costs. In addition, the decline in prices of core components like batteries, along with a 65% reuse rate of parts on the NT3.0 platform, allows the model to lower prices while achieving a higher gross margin than the previous generation From this perspective, the aggressive pricing of the new ES8 is backed by a concentrated effort across the entire R&D and supply chain system, squeezing out cost "water" to transform it into market competitiveness. "In the past, some technological investments may have been used too early before the industry scaled up. Now, hardware such as chips and self-developed seat platforms have truly entered the stage of scale effects and cost optimization," said Li Bin.

This model not only maintains Nio's brand tone but also expands the user base, making the new ES8 the "traffic bearer" of the Nio brand. This confidence of "lower prices without lowering profits" is difficult for many brands that rely on external supply chains to replicate.

This flagship SUV has shown the outside world Nio's moat, which is no longer just a simple "Haidilao-style" service, but a systematic combat capability in the automotive industry. After years of setbacks in competition, Li Bin and Nio have finally staged a remarkable turnaround.

The Battle for Q4

"When will Nio go bankrupt?" Being asked this repeatedly is quite annoying," said Li Bin, who has always presented an optimistic image, recently expressing his feelings in front of users.

Once upon a time, losses and fluctuations in sales put Nio under pressure, and the long-termism insisted upon by its founder Li Bin was viewed by some public opinion as "out of touch with reality." "If Nio cannot operate steadily, it is irresponsible to users," Li Bin candidly told the internal team, "Achieving profitability in Q4 is not for show, but the cornerstone for our entire company to achieve long-term sustainable development."

Nio's president, Qin Lihong, expressed even more directly to Wall Street: 2025 is the "concentrated payoff year" for Nio's years of R&D and infrastructure investment, and it is a life-and-death test of Nio's systemic capabilities, so the Q4 profitability target must be achieved.

Now, as the turning point in the pure electric large three-row SUV market emerges, this "stubborn persistence" has finally brought rewards.

Why is the ES8 considered the totem model of the Nio brand? Because the ES8 is not only Nio's first mass-produced model but also the vehicle that supported the throne of China's high-end pure electric SUV sales at that time. More importantly, during Li Bin's most difficult period, the story of the first batch of ES8 owners "generating power with love" to save Nio is still fresh in memory.

Currently, Nio is in a critical moment of launching a counterattack, and the mission of the ES8 is not only sales but also to uphold the high-end backbone of the Nio brand.

In the automotive manufacturing industry, while sales are certainly important, the impact of the "sales mix" on financial health is even more direct. Delivering more high-value-added, high-margin products is the core path for all automakers to improve profitability. The new ES8 is one of the high-margin models in Nio's product matrix, equivalent to the Pro MAX series for the iPhone.

Li Bin calculated a sum for Wall Street: "If we multiply the gross profit sales by the gross profit margin and subtract the expenses, if we can achieve sales of 150,000 units in Q4, there is a chance to achieve profitability on a NON-GAAP basis."

If the production capacity target of 15,000 units per month can be smoothly achieved, it means that just the ES8 model alone will contribute considerable quarterly sales. Moreover, it aims to achieve the "impossible triangle" of high-end, sales, and profits. Li Bin stated that as the sales proportion of high-margin products like the ES8 and L90 increases, the gross profit margin in Q4 is likely to return to 16%-17% Therefore, the capacity ramp-up battle has become a key part of Li Bin's "three-part series" for achieving profitability in Q4, as proposed in a recent internal meeting. Li Bin clearly stated that to achieve profitability in the fourth quarter, the first thing to do is to "ensure deliveries." He bluntly pointed out that the most critical task for the ES8 at present is the delivery of new cars, "Delivering one more unit increases the probability of profitability this year."

From the current momentum of an expected 70% month-on-month growth in November, it is evident that the new ES8 is well-prepared for this delivery showdown, playing the role of Nio's "growth accelerator."

The competition in the automotive industry is ever-changing, but Nio has clearly found its own rhythm. With the full release of ES8 production capacity, the prospect of Nio achieving quarterly profitability is becoming unprecedentedly clear. It has already passed the most difficult times and entered a phase of harvest. The flow of funds represents the direction of confidence; since the low point of Nio's stock price in August this year, Nio's stock price has already doubled.

The return of market confidence is not only due to Li Bin's "long-termism" finally entering a monetization moment, but more fundamentally, it is because Nio has begun to influence the direction of the landscape.

In the first three quarters of this year, the cumulative penetration rate of domestic new energy vehicles reached 52.15%, with September alone surging to 58.37%. Among new energy vehicles, the growth rate of pure electric vehicles is accelerating, and the sales ratio of hybrid to pure electric vehicles has changed from last year's 50:50 to this year's 30:70.

The competition between pure electric and hybrid models has finally yielded results. "Now, among the pre-order users of the all-new ES8, 80% are owners of range-extended and fuel vehicles, and everyone has recognized its value," Li Bin revealed to Wall Street News.

It can be said that the golden age of range-extended large SUVs is coming to an end, and the era of pure electric large SUVs is on the rise.

"The most difficult thing about running a business is knowing what to stick to and what to change; this is actually an eternal topic for entrepreneurs," Li Bin stated when reflecting on the fundamental reasons why Nio has managed to hold on until the dawn arrives. "What Nio did ten years ago is not much different from today," Li Bin believes that Nio has not made many back-and-forth moves, maintaining its technological route and product planning, sticking to it, and following a single path.

"The recent hot sales of Nio's cars prove that although the technological route did not yield the expected benefits due to external reasons in the past three years, today, when the turning point arrives, its competitiveness is manifested," Li Bin stated frankly.

The insistence on key strategies has given Nio the capital to turn things around later.

Li Bin clearly recognizes that the trough from 2019 to 2020 "was somewhat survived by luck," with user support and help from Anhui, but this time Nio must rely on its own capabilities to emerge.

From self-research in technology to product definition, from capacity control to user service, the system capabilities that Nio has built over ten years are expected to see concentrated outbreaks in 2025. The current surge in orders for the new ES8 is the best "mouthpiece" for Li Bin