Nio's ambition has sunk to the county level

Author | Chai Xuchen

Editor | Zhou Zhiyu

With the stable recovery of sales, Li Bin, who is in high spirits, plans to extend the electric business to various counties in China.

On August 20th, at the Nio Power Day, Nio's chairman Li Bin put forward an ambitious infrastructure plan - "Electricity Access to Every County". His ambition is to cover the entire country with Nio's "ace moat" of charging and swapping facilities in the next two years.

Among them, the charging piles will achieve access to every county by June 30, 2025.

The swapping stations will be gradually promoted in three stages: by June 30, 2025, covering over 1,200 county-level administrative regions in 14 provincial-level administrative regions; by the end of 2025, covering over 2,300 counties in 27 provinces. If the plan goes smoothly, Nio's swapping stations will exceed 5,000 by then. Starting from 2026, they will focus on building swapping stations in the remaining provincial-level administrative regions.

Currently, with 2,480 swapping stations and 23,000 charging piles, Nio's energy network has outlined its initial shape. Nio's president Qin Lihong frankly stated that Nio's infrastructure construction has completed the 0-1 stage, and the upcoming "Electricity Access to Every County" marks the beginning of the 1-10 stage. "We will not focus more on super first-tier cities, because many people will compete for business with you."

Li Bin said that Nio is willing to sink and do the thankless "foolish things", "In places where others don't build charging piles, Nio is foolishly building them." Because these projects, which were previously jokingly referred to by investors and the industry as "losing money but gaining publicity", have truly brought sales conversion to Nio with their deployment in first and second-tier cities.

"We are patiently building swapping stations and infrastructure, the first phase is definitely to help sell our cars, and the effect is very significant. Why do we have over 60% market share in the high-end pure electric market above 300,000 RMB? The market has given the answer," Li Bin said confidently.

In the past three months, Nio has consecutively exceeded 20,000 units per month, with a total delivery volume of 108,000 units in the first seven months of this year, an increase of nearly 50% year-on-year. This has given Li Bin great confidence.

Behind the focus on charging and swapping, Li Bin's true "strategy" is to stimulate the market's purchasing potential, laying the groundwork for the explosion of the two sub-brands to come. He revealed, "After researching LeDao users, we found that the proportion of orders placed due to swapping is very high, even higher than for the Nio brand."

The reason behind this is not complicated, as Li Bin mentioned that only 30% of users in China can install charging piles at home. There is a huge hidden demand, and the deployment of the energy network has the opportunity to seize the potential sales gold mine.

"When we talk about 'Electricity Access to Every County', everyone understands that it makes car owners feel like they can go anywhere," Li Bin said. "Without 100,000 services per day, users will not perceive it and it will be difficult to form a network effect. Tesla also laid out in advance in the United States, using free charging services in the early days to open up the market and cultivate user habits."

Moreover, in his view, this is more cost-effective than retrofitting with extended-range capabilities halfway through. "Assuming that Nio now adds an extended-range device to each car, with a single unit cost of over 20,000 RMB, for one million cars, it would cost over 20 billion RMB, enough for me to set up ten thousand swapping stations." In fact, this has become a sexy story. In addition to attracting sales, Nio's battery swapping stations have also begun to gradually self-generate revenue. Qin Lihong said that with the discontinuation of free battery swaps this year, the proportion of paid charging and swapping is gradually increasing. "Now, about 20% of the stations nationwide have positive profit statements."

The capital market is also voting with its feet. In May this year, Nio Power received a strategic investment of 1.5 billion yuan in Wuhan.

It seems that Nio's energy business is gradually entering a virtuous cycle. Under the call of Li Bin, more than 3,000 companies have already partnered with Nio Power to build charging and swapping stations. In terms of battery swapping, strategic cooperation has been established with 7 car manufacturers. However, this is not enough to support Nio's ambitious plan to expand its battery swapping network nationwide.

During this event, Qin Lihong introduced the "Power Partner" program, opening up cooperation to the whole society to build charging and swapping stations. They hope that everyone can contribute idle space, electricity capacity, and excess photovoltaic energy to expand the energy supplement cake, and have provided various cooperation plans for this purpose. Li Bin revealed that the largest power partner, Zhongan Energy, will build one thousand stations with Nio within a few years.

This vision of energy supplementation is grand and beautiful, and market expectations are already high. However, before reaching the other shore, there are still many uncertainties waiting for Nio to resolve one by one.

In a post-event interview, Shen Fei, the person in charge of Nio Power, admitted that the progress of this year's "Thousand Stations Plan" has been somewhat delayed. This is because the research and development and production progress of the fourth-generation stations were two months later than expected, and there are also some limitations on the production capacity of the lidar used for the transformation of the third-generation stations.

In addition, Li Bin also pointed out that the new energy supplement infrastructure plan was laid out two years in advance based on their brand. All of this is predicated on pure electric vehicles becoming the market trend. This means that Nio cannot afford to make mistakes.

Regarding these two points, Li Bin stated that it does indeed take some time for the battery swapping stations to ramp up production. With the commissioning of the Nio Wuhan battery swapping station factory in September, production capacity will ramp up in the fourth quarter, with the factory's annual target capacity exceeding 1,000 battery swapping stations. As for the future direction of the market, he firmly believes that pure electric vehicles will explode, and battery swapping will become mainstream, with more car manufacturers and partners joining in.

Having identified the direction, Li Bin and his Nio will step on the "accelerator" and overtake towards the other shore. Perhaps in two years, the outcome of this bold gamble will be revealed