The leading force among new car manufacturers, NIO, faced a significant setback in October with a massive 65% drop in sales. Despite this, founder William Li remains unperturbed. What's going on?
1. Leading Force Among New Car Manufacturers?
Founded in 2014. NIO quickly garnered the favor and investment from major Chinese internet and venture capital giants like Tencent, JD.com, Xiaomi, and Hillhouse Capital. In just four years, it became the first Chinese new energy vehicle company listed in the U.S. In 2020. NIO soared, becoming the world's fourth-largest automaker by market value, trailing only Tesla, Toyota, and Volkswagen. Its unique battery-swapping model earned it a spot on Fortune's 2020 list of companies changing the world. NIO's sales lead among new car manufacturers and its high-end premium product line earned it the nickname "Tesla killer."
2. NIO's Sales Plummet by 65%?
However, NIO was hit hard this past October, experiencing a sales Waterloo. Data shows that NIO's deliveries in October were only 3.667 units, a year-on-year decrease of 27% and a month-on-month plummet of 65%. In September, NIO's sales were still as high as 10.628 units. The sharp decline in just one month is indeed shocking. In contrast, XPeng delivered 10.138 units in October, a 233% year-on-year increase, and Li Auto delivered 7.649 units, a 107.2% year-on-year increase. This stark contrast suggests that NIO has indeed fallen behind.
From October's sales data, NIO not only lags behind first-tier companies like XPeng and Li Auto but has also been overtaken by Neta (8.107 units) and WM Motor (5.025 units), ranking only fifth among new car manufacturers. In fact, NIO's delivery volumes have been less than ideal for several months. In July, NIO delivered 7.931 units, but both Li Auto and XPeng exceeded 8.000 units. In August, NIO's delivery volume dropped to 5.880 units, falling behind XPeng, Li Auto, and even Neta. Clearly, NIO's sales decline has been ongoing for some time.
3. Why Isn't William Li Worried?
As the leading force among new car manufacturers, why is NIO experiencing such a severe decline, being left out of the first tier? Industry insiders have various opinions; some attribute it to the chip shortage, others to insufficient product power of NIO's models, and some to fierce market competition. NIO's sudden decline in the traditional peak car sales season raises questions about whether its era of sales dominance is over. However, the real reason behind NIO's current sales decline is the reorganization and upgrade of its production lines. Since April and May this year, NIO has been upgrading its JAC-NIO Hefei plant.
In October, NIO's production line operated at full capacity for only 10 days, greatly impacting production and delivery volumes. However, NIO's order situation in October was excellent, even setting a new record. This indicates that market demand for NIO's products remains strong, with no issues. William Li is not only unperturbed but also well-prepared, with NIO poised for a strong comeback. NIO's willingness to risk a drop in production to upgrade its production line aims to expand the overall capacity of the factory, ensuring the ET7's production and delivery in the first quarter of next year. It appears that NIO is betting on the ET7.
Since the launch of the EC6 in mid-2020. NIO has had a new product gap of over a year. The new ET7. unveiled earlier this year, has garnered much attention, with the market eagerly awaiting its mass production. As NIO's first sedan model, the ET7 boasts excellent product power, with a minimalist and futuristic design, leading dimensions both vertically and horizontally, and an extended comprehensive range exceeding 1.000 kilometers. The only concern is the price, with a post-subsidy starting price of 448.000 yuan, suggesting that the ET7 may not be a volume model.
