For Chinese electric car company NIO, innovation includes developing superior vehicles and technology, as well as finding ways to bring users closer.
kopi-C is a regular column by SGX Research in collaboration with Beansprout, a MAS-licensed investment advisory platform, that features C-level executives of leading companies listed on SGX. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.
When Chen Rui was approached to join Chinese electric car company NIO in 2017, the decision was an easy one. “After talking to its executives and doing my own research, I realised that it was a great opportunity. At the time, most Chinese firms in the industry were focusing on the lower end of the market. NIO had its eye on the premium sector and targeted to provide a holistic experience to users,” he explains.
More than just ambition, it had the innovative technologies to support its goal. Among other breakthroughs, it developed a battery-swapping system to solve a major challenge of selling electric cars: the time it takes to charge the battery. “Most vehicles have to charge for hours to get its battery fully charged. Even using the latest super charging piles, they still need at least 20 to 30 minutes, to get its battery up from about 20 per cent to 80 per cent.”
“With our battery-swapping system, you only need five minutes to get a fully charged battery pack, and it’s fully automatic. You don’t even have to step out of your car. All you need is to park beside our power swap station and activate the battery swapping by tapping the screen, the whole process will be automatically completed within five minutes providing an extremely convenient and premium experience,” he adds.
“Now we have built more than 2300 power swap stations and 20,000 chargers worldwide. In addition, NIO’s users can upgrade their battery packs to larger capacity ones if they have long-range travelling needs on a daily, monthly or yearly basis. This chargeable, swappable and upgradable power system is something that really eases people’s concerns about buying electric vehicles because of the charging time and driving range anxiety.”
In the time that Chen started in NIO as a finance business partner and worked his way up to his current role as head of investor relations, the firm has become a leading player in China’s premium battery electric vehicle sector, with a 40% market share in recent months. The value of battery swapping technologies and well-established infrastructure has won the recognition of the EV industry. Two of China’s top car manufacturers, Changan Auto and Geely Holding, recently announced their partnership with NIO on battery swapping technologies and adoption. NIO’s battery swapping system starts to show its imaginative business value in the long term.
On a mission to tap new markets
NIO was listed on the New York Stock Exchange (NYSE) in 2018, and Hong Kong Stock Exchange and Singapore Exchange in 2022, earning it the title of being the first Chinese original equipment manufacturer to be listed globally in three exchanges. “This is quite the milestone for us, and I think it comes down to our founder William Li’s vision, commitment and roadmap, developing NIO into a community starting with smart EVs where we share joy and grow together with users.”
The listings have also broadened its options as it seeks to grow further. “They gave us access to global investors, which enabled us to do a series of financing activities over the past five years.” With the NYSE listing alone, it completed multiple rounds of fundraising in 2020 and 2021 that brought in US$10 billion.
Such capital is supporting NIO’s continuous investments in research and development, market expansions, production capacity and power networks for its users’ experiences. This includes increasing the coverage of its Navigate-on-Pilot Plus (NOP+) smart assisted-driving feature, which can carry out automatic ramp entry and exit, passing of slow-moving vehicles and more.
By the end of 2023, NIO has completed around 320,000 km of NOP+ urban pilot routes validated in 208 cities. The routes validation progress and mileage coverage are continuously increasing and it is estimated that the pilot routes will cover 96 per cent of NIO users’ resident cities by mid of this year. “We will really reshape the way people use our cars, change how people look at and think about smart electric vehicles, and make them more likely to buy one.”
The company will also harness all its technologies to launch two mass market brands, with project codes of Alps and Firefly respectively, to break into a much larger pool of potential customers. The Alps brand is targeted at the RMB 200,000 to 300,000 (about S$37,000 to S$55,500, similar pricing range as Tesla in China) market, while Firefly will aim for another complementary sector.
While NIO has established a strong presence in China’s leading cities – outselling even BMW, Mercedes and other brand names in the premium vehicle sector in Shanghai – it can do better by raising its profile in the country’s tier two and three cities, Chen says. It also plans to utilize its existing network in Europe, and enter the Southeast Asia market after it debuts Alps.
“With Southeast Asia especially, we believe we will be able to do better with a combination of more affordable mass market products and premium products. In fact, we think Singapore could be a regional base for us for the market. It could be a regional headquarter for our sales and service, and research and development initiatives.”
Bringing users on board for growth
Even as NIO has transformative plans for its evolution and growth, it will host fast to its start-up-like culture focused on delivering superior experiences to users, Chen shares. “There are more than 30,000 employees from over 30 countries within our company, but we still try to behave like a start-up,” he says.
“For example, we have five enablers to guide our staff’s work – put users’ interest first, provide experiences beyond expectations, innovate continuously, be driven by design and find ways to improve system efficiency – but we don’t have any very strict rules on how they should communicate with users, write messages or achieve those enablers.”
“We trust our employees to ask themselves if what they are doing fulfils one or more of those enablers. This is the type of start-up culture that really encourages employees to think about their work and what they can do to contribute to the company’s goals. We don’t even have a traditional Key Performance Indicator system, but use an innovative Vision-Action-Upgrade system to let staff develop and upgrade their own targets and action plans.”
With its growing range of vehicles, which already spans a three-row SUV and an executive flagship sedan for business needs, five-seater models for families, mid-sized sedan for younger generations and female drivers, and more, NIO aims to cater to a wider range of potential customers. “On all fronts, we will enhance our long term competitive advantages in the transformation of the automotive industry.”
Chen adds that NIO will continue to differentiate itself from its rivals with its technologies. NIO has built its 12 full-stack technology domains covers smart, electric and vehicle software and hardware, as well as digital operation capabilities to support its products, services and community worldwide, serving multiple brands and product platforms, and fulfilling users in different regions. “Now the average selling price of NIO’s models are much higher than Tesla in China. Gradually, people will consider NIO an even more premium electric vehicle brand than, say, Tesla, worldwide.”
About NIO Inc.
NIO Inc. is a pioneer and a leading company in the premium smart electric vehicle market. Founded in November 2014, NIO’s mission is to shape a joyful lifestyle. NIO aims to build a community starting with smart electric vehicles to share joy and grow together with users. NIO designs, develops, jointly manufactures and sells premium smart electric vehicles, driving innovations in next-generation technologies in autonomous driving, digital technologies, electric powertrains and batteries. NIO differentiates itself through its continuous technological breakthroughs and innovations, such as its industry-leading battery swapping technologies, Battery as a Service, or BaaS, as well as its proprietary autonomous driving technologies and Autonomous Driving as a Service, or ADaaS. NIO’s product portfolio consists of the ES8, a six-seater smart electric flagship SUV, the ES7 (or the EL7), a mid-large five-seater smart electric SUV, the ES6 (or the EL6), a five-seater all-round smart electric SUV, the EC7, a five-seater smart electric flagship coupe SUV, the EC6, a five-seater smart electric coupe SUV, the ET9, a smart electric executive flagship, the ET7, a smart electric flagship sedan, the ET5, a mid-size smart electric sedan, and the ET5T, a smart electric tourer.
The company’s website is http://ir.nio.com
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