Nio is expanding its sales team in line with a target sales capacity of 30,000 units per month, and hopes to build this capability initially by the end of September.
(Image credit: CnEVPost)
Nio announced its Q2 earnings today, and here are the key takeaways from the earnings call, with the latest being at the top.
Nio’s third-generation battery swap stations can break even if each station provides 60 services per day, and 20 percent of these stations have now achieved this.
More than half of Nio’s sales come from Jiangsu, Zhejiang and Shanghai. In some central and western Chinese provinces, capital cities contribute 90 percent of local sales. It is an urgent task for Nio to make its sales channels cover lower-tier cities.
Alps’ models will be developed with a different philosophy than the Nio brand, which is aimed at the premium market, and will be more focused on family use.
Deliveries of Nio’s first phone will begin in late September.
A second model for Alps is already in development, and the brand won’t have a large number of models, and will be more focused on the sales of each car.
The Nio brand will not have any new product launches next year, but there will be the usual model year revisions.
The first model of Nio’s mass-market-oriented brand Alps will be launched in the second half of next year, and the car will be very competitive.
The development of the Alps model is now well underway, with the first pilot test car already rolling off the production line.
Nio hopes to achieve a double-digit gross margin in the third quarter and 15 percent in the fourth quarter.
Nio has a 59 percent share of the pure-play electric vehicle market priced above RMB 300,000 and above.
Nio’s current models have largely covered the needs of 80 percent of users in the high-end market.
Nio is confident that combined monthly sales of the ET5, ET5T, ES6, and EC6 will reach 15,000 to 20,000 units, although it will take time for production capacity to climb after deliveries of the new EC6 begin in September. In addition, sales of the ET7, EC7, ES7, and ES8 will also grow.
Nio’s history shows that a significant increase in sales comes 1-2 years after new product launches.
Nio did not continue to offer the free battery swap entitlement package option from August 1, giving an early release of demand from some customers who wished to have the entitlement, which gave a bit of a boost to deliveries in July. From August, Nio’s orders returned to normal levels.
Nio’s test drive numbers hit a record high in August and are now around 10,000 per weekend, a significant increase from June and July. But it takes some time to go from test drives to converting them into orders.
One problem Nio realized in June was that the number of salespeople and their ability to sell was lagging behind competitors.
Nio is expanding its sales team in line with a target sales capacity of 30,000 units per month, and hopes to initially build this capability by the end of September.
Although the current market environment is full of challenges and the smart electric vehicle market is becoming increasingly competitive, Nio is fully prepared in core technology, product layout, sales capability, manufacturing and supply chain to meet the challenges.
Nio believes that the company is capable of focusing on the execution of its marketing and sales strategy and driving a steady increase in deliveries, while further optimizing its cost structure and improving operational efficiency.
Since July, Nio has been more aggressively expanding its user touchpoints and sales channels, and further expanding its sales team across the country. These initiatives will enhance Nio’s sales capabilities and drive sales growth.
The number of NOP+ users has exceeded 100,000, with a cumulative mileage of more than 8,000 kilometers. The mileage penetration rate of NOP+ driving has reached 53 percent in the covered road sections.
Enhanced pilot assist covering city areas has been launched in Shanghai and Beijing for several rounds of pilot tests.
Nio plans to launch and begin deliveries of the newly upgraded mid-size coupe SUV EC6 in September, completing the full product switchover to the NT 2.0 platform.
Nio’s eight products will fully enter the high-end pure electric market to better meet the diversified needs of users in the high-end market and drive steady growth in overall deliveries.