William Li (Ceo Nio): “Survival is our top priority”

At the media event following the pre-sale start of the third-generation Nio ES8, William Li explained where the company saved the cost to be able to offer such aggressive pricing for its flagship SUV. Li also admitted that survival is the most important thing for the company at present 

On August 21, Nio unveiled the all-new ES8. The ES8 is Nio’s first mass-produced car, launched in 2018. It released its third generation, which starts pre-sale at 416,800 yuan ($58,050) for the 100 kWh battery version, which is 25% lower than the 518,000 yuan ($72,140) starting price of the previous generation ES8. The BaaS price (car without battery) is 308,800 yuan ($43,000). The new ES8 will launch in late September at Nio Day. The following day, Nio officially held a small-scale media group interview in Chengdu. William Li, Ceo of Nio, and Qin Lihong, President of Nio, attended the session. Representing the brand’s executive team, they responded to questions of high interest, such as the new car’s pricing, product differentiation, and cost control measures. 

“We brought the price of ES8 where it should be”, Li said during the media briefing. “The price adjustment is not a short-term move but a result of Nio’s ability to adjust,” the Ceo continued. “Where exactly were the costs saved?” This was a topic of great interest. William Li explained how the cost was saved to achieve such a cost reduction, mentioning a few main aspects. Nio renegotiated the cost with suppliers, lowering the procurement cost. R&D cost was spread across multiple models, sharing the core technologies such as the 900 V charging platform, rear motor, and in-house developed chip. 

The ES8 also underwent some material adjustments with a reduction of aluminium content. William Li particularly emphasised that their in-house developed Shenji NX9031 5 nm chip “really saved a lot of money,” compared to the second generation ES8, which used the Nvidia Orin X chip. Talking about R&D cost, Li admitted that in the past, “not every penny of the 60 billion yuan investment was highly efficient” and there is still room for improvement. Li said the company will set evaluation models for its R&D departments, tracking the return of investments in short-term or long-term periods. “Some investments may return in 3 months, 1 year, or 2 years,” Li explains. "Nio will not reduce the R&D investments but will try to improve efficiency".

Regarding the pricing strategy for NIO’s third-generation ES8, William Li also addressed the existing customers’ backlash over the new pricing, as the new ES8 is 101,800 yuan ($14,100) cheaper than the previous generation. William Li admitted that the pre-sale price of the all-new ES8 is “explosive” and does have some impact on existing users. “Nio must prioritise the bigger picture as survival is the most important thing. The new pricing may hurt the feelings of some existing users in the short term, but in the long run, this pricing strategy will help Nio maintain its competitiveness in the fierce market.” If prices remain high, it will be difficult to compete in the market, Li said. 

At the same time, he firmly denied the notion of a “battery swap premium,” stating that the value of battery swap services far exceeds 100,000 yuan ($13,930). From a full lifecycle perspective, battery swapping saves users significant time and alleviates range anxiety, reflecting Nio’s core competitiveness. Why wasn’t the all-new ES8 equipped with rear-wheel steering and active suspension? Li Bin explained that the trade-offs in technical configurations were based on product positioning and cost considerations. Adding rear-wheel steering would affect the third-row space, while including active suspension would make it impossible to achieve the current pricing. The challenge is not making a cheap car but creating a product that balances price and innovation, Li said. 

Has the “decisive battle” begun? “Recently, the popularity of “large three-row pure electric vehicles” has been very high. Even automakers that previously sold extended-range vehicles very well have launched large three-row pure electric models. During a previous trip to Mount Everest, I noticed that charging stations from extended-range vehicle companies have been built at the Everest Base Camp. What does this imply? Does it mean that even when going to Mount Everest, extended-range vehicles no longer need to refuel? Does it mean that pure electric vehicles can now travel freely? Taking the ES8 as an example, its 777L storage space far exceeds that of comparable extended-range SUVs. This fully demonstrates that, with today’s technological advancements, the benefits brought by pure electric technology to users have surpassed the benefits of choosing extended-range vehicles due to “charging inconveniences. “The golden age of large three-row pure electric vehicles is coming” has become an industry consensus” Li said. 

When will a pure electric MPV be launched? “If launching an MPV could generate significant profits, we would certainly do it. However, after thorough consideration, we do not yet believe that large families need an MPV. In my mind, I don’t think in terms of MPV or SUV categories. Instead, I focus on user needs. If the form factor resembles an SUV, then it is an SUV; if it resembles an MPV, then it is what everyone understands as an MPV” Li said.