NIO has entered the "price war" arena.
Introducing a new battery rental service policy, NIO has reduced both the entry barrier and the overall cost for purchasing and using their vehicles.
Moreover, there are reports that customers purchasing the latest NIO models will receive a complimentary NIO Phone, further sweetening the deal.
While an official announcement of a price drop on the entire vehicle lineup hasn't been made, NIO is evidently engaging in the market's price competition through various means, aiming to further boost sales.
Adjusting battery prices is just one aspect; NIO has also launched a mass-market sub-brand, "Le Dao," targeting the 300,000 RMB market. Their inaugural model, directly competing with the Model Y, falls within the 200,000-300,000 RMB range.
What's particularly noteworthy is CEO William Li's direct involvement, stepping into the limelight through live interactive sessions to address questions, clarify doubts, and even apologize for past statements — he even brought his wife along for the occasion.
In last night's "Primetime" broadcast, over 11 million viewers tuned in to catch Li Bin's candid discussion. Li Bin addressed everything openly, not shying away from discussing his views on the Xiaopeng X9, Jike 009, and the Ideal MEGA, without omitting apologies.
To sum it up, NIO is evolving, and so is Li Bin.
NIO also "slashed prices."
Let's delve into the latest developments: NIO has adjusted its BaaS (Battery as a Service) policy, reducing the monthly rental for standard range battery packs from 980 CNY to 728 CNY.
The rental for long-range battery packs has also been slashed from 1680 CNY to 1128 CNY.
Doing a quick calculation, opting for the BaaS model when purchasing a vehicle could save at least 3024 CNY annually on driving costs.
Moreover, since purchasing a vehicle with rented batteries lowers the overall vehicle price, after the implementation of the new energy vehicle purchase tax, there will also be partial tax exemptions.
If you purchase a car before May 31, 2024, under the BaaS (Battery as a Service) plan, you'll enjoy a "pay for four months, get one month free" offer. This includes 60 free battery swaps during the rental period.
Additionally, for each installment of the BaaS bill paid, you'll receive a buyout discount. The standard bill installment is ¥460, while the extended one is ¥820.
After the introduction of the new policy, which option is more cost-effective: renting or buying out the battery?
Let's crunch the numbers for leasing a standard range battery pack.
If you purchase the car before May 31st, you'll save ¥70,000 due to opting for the leased battery.
However, you'll need to pay the battery rental fee. If you pay the five-year rent upfront, taking advantage of the "pay for four years, get one free" offer, you'll only need to shell out ¥34,944. Plus, you'll receive 60 complimentary battery swap vouchers.
Over 38 billing cycles, there's a buyout discount of ¥17,480.
Five years later, if you opt for a buyout, the original cost would be 70,000 CNY. After deducting the discount of 17,480 CNY, you'd actually pay 52,520 CNY.
So, renting the battery for five years and then buying it out would total 52,520 + 34,944 = 87,464 CNY.
At first glance, this seems over 17,000 CNY more expensive than directly buying out at the time of purchase. However, considering the free battery replacement vouchers that come with renting, in reality, renting the battery only costs a few thousand CNY more than buying it out.
This adjustment can be seen as reducing the barrier to purchasing a car while also making daily usage more cost-effective. Renting for four months upfront, with an additional month free, works out to less than 600 CNY per month for the battery rental.
Five years down the line, considering a switch to a buyout plan, the actual annual expenditure doesn't seem to spike significantly.
With this adjustment in mind, and based on NIO's latest vehicle pricing, opting for the BaaS model to purchase a car means starting at just 228,000 RMB for the entry-level NIO ET5.
So, why this adjustment?
This decision can be analyzed from two perspectives: NIO's internal strategy and the external market environment.
From NIO's standpoint, the company has been diligently working on extending battery life through a combination of technological advancements and operational enhancements.
Technologically, there have been improvements in battery materials, alongside the establishment of a cloud-based operational system. Additionally, leveraging the advantage of its own battery swapping network, NIO has endeavored to prolong battery lifespan.
These efforts form the bedrock of the latest BaaS battery leasing policy, constituting internal factors behind the decision.
The introduction of the new policy forces NIO to consider the market environment it's facing.
As we all know, there's been a fierce "price war" among car manufacturers lately, extending from the A-class sedan market to models priced above 200,000 RMB.
By reducing the monthly rental fees for batteries, NIO is essentially lowering prices, joining the "price war" fray.
After all, adopting the BaaS (Battery as a Service) model makes buying a car cheaper upfront by at least 70,000 RMB, thus lowering the entry barrier.
For regular usage, opting for the "buy four, get one free" battery subscription costs less than 600 RMB per month, which is even more economical than before.
And if one decides to buy out the battery after five years, it'll only cost a few thousand RMB more, making the overall price lower.
So, adjusting the BaaS battery rental policy is NIO's response to competitors' "price war" measures. It's said that now when you buy a new model, you also get a NIO phone, priced starting at 6499 CNY.
NIO's efforts to boost sales don't stop there.
While making adjustments to the NIO brand, NIO will also open up new battlegrounds this year by launching and delivering the first car from its sub-brand "Ledar" with the codename L60.
According to Li Bin, the sub-brand will focus on household use, with L60 targeting the Model Y segment and also supporting battery swapping, offering better value for money.
In last night's livestream, Li Bin elaborated on the concept of "乐道 (lè dào)", explaining it as "家庭和睦欢乐，管理家务有方法", with the connotation being "家人在一起走过的每一段路都是乐道".
The livestream attracted over 11 million viewers, where Li Bin addressed numerous questions, once again showcasing his broad vision.
Li Bin's Livestream Draws Over 11 Million Viewers
During the livestream, someone asked Li Bin to share his views on the ideal MEGA.
Li Bin remarked that he wouldn't comment much on MEGA without test-driving it yet, but he found its design to be quite innovative.
Regarding the public outcry sparked by MEGA's design, Li Bin believed that starting a car business is not easy, and such sentiments shouldn't be encouraged within his company.
Previously, there were reports online that Li Bin had instructed employees not to engage in discussions or spread rumors.
Apart from MEGA, Li Bin also mentioned two other pure electric MPVs: JiKe 009 and Xiaopeng X9.
The Geely K-Car 009 hit the market early, and Li Bin has even ridden in one. He praised the 009, saying it's impressive and superior to the Toyota Alphard.
He gave a thumbs-up to several cars (X9, 009, MEGA), saying they're all pretty good. He mentioned again during the live stream that if he were to buy the X9, he'd want He Xiaopeng to give him a "discount."
Li Bin not only praises competitors during online live streams but also partners with them for offline charging station services. His scope and vision are truly unmatched.
During the live stream, Li Bin revealed that NIO has provided over 36 million charging services, with 82% of them being for non-NIO vehicle owners.
Certainly, when it comes to sheer volume of data, NIO's battery swapping frequency takes the lead.
During a recent livestream, Li Bin once again shared that NIO's battery swaps have surpassed 40 million times, with projections indicating an accelerating pace in the future. He also announced plans to establish 1,000 additional swapping stations this year.
Currently, NIO's battery swapping process only takes 3 minutes. Last year, Li Bin personally demonstrated the testing of semi-solid batteries during a livestream, achieving a successful range breakthrough of over 1000 kilometers.
From this perspective, electric vehicles are now on par with traditional fuel vehicles in terms of refueling efficiency and range.
However, Li Bin did address his previous statement about "who would still buy gasoline cars," offering a sincere apology once again.
During the NIO Day event in Suzhou last year, he had a chat with car owners and the media, feeling quite happy and relaxed. However, he accidentally made a slip of the tongue, admitting later that he was wrong and shouldn't have said what he did.
Actually, just last month, Li Bin borrowed a colleague's account to do a livestream in a restaurant.
But it was his first time doing a livestream on his own Douyin account. During the livestream, Li Bin gave out lucky bags to viewers, urging them to "keep following." Overnight, he gained 180,000 followers and accumulated over 11.16 million views, garnering a significant amount of traffic.
Li Bin, who usually doesn't post much on Weibo, has recently stepped into the spotlight, gaining attention.
The CEO himself is getting involved in marketing efforts. NIO is really going all out to boost sales, pulling out all the stops from its arsenal and trying new strategies:
Adjusting the battery rental service, giving away phones with car purchases, launching sub-brands, Li Bin hosting live streams...
In 2024, car companies are engaged in a "price war", with marketing tactics also evolving.
NIO is going all out for the future, and Li Bin is equally committed to NIO's future.
