On March 14th, at the Long Life Battery Strategy Communication Conference held at NIO, the official price system for BaaS battery rental services was adjusted, with rental prices for 75kWh and 100kWh batteries reduced by 25-30%; In addition, NIO has confirmed that it will lay out its second brand, "Ledo," to benchmark against Tesla Model Y products, but at a more favorable price.
NIO BaaS battery rental service price reduction
It is worth noting that since the launch of BaaS battery rental service in 2020, this service has become a lever for NIO to reduce the cost of purchasing and using cars. In the era of low prices for new energy vehicles, once again reducing battery rental has become one of NIO's strategies in the low price war.
NIO and CATL officially signed a contract on their long-life battery business on March 14th. Based on this, NIO's BaaS battery rental service has also been adjusted.
At NIO's Q4 financial report, Li Bin stated that NIO not only focuses on energy density, but also on the lifespan of batteries. In the past few years, NIO has addressed issues related to battery safety and charging efficiency, with the main focus on battery lifespan. NIO has conducted a lot of research in this area over the past few years, and he believes that this is "truly important.".
Prior to the signing of this agreement, public information showed that CATL had signed a five-year comprehensive strategic cooperation agreement with NIO in January 2023, which involved areas such as "business model cooperation based on long-life batteries". The goal was to achieve a 15 year service life for power batteries while ensuring that the health level of the batteries at the end of their lifespan was not less than 85%.
The price reduction of BaaS battery rental service this time indicates that the strategic cooperation between the two sides has already achieved results. From the perspective of price reduction, the monthly rent for 75kWh battery packs has been adjusted from 980 yuan to 728 yuan/month, with a price reduction of 252 yuan; The monthly rent for a 100kWh battery pack has been reduced from 1680 yuan to 1128 yuan/month, with a price reduction of 552 yuan.
In addition, NIO has launched a limited time discount. By the end of May this year, users can enjoy a battery rental service fee of "pay 4 get 1 free" and 60 free battery exchange coupons for each payment of Baas bills, further lowering the price of battery rental services.
In fact, the NIO BaaS solution has always been a means for it to lower the threshold for vehicle purchase and use, and enhance its advantage in the price war of new energy vehicles.
Can price reduction+second brand boost sales?
In August 2020, after NIO released its BaaS solution, the purchase price was reduced by at least 70000 yuan, and the down payment for the vehicle also decreased. Renting also lowered the installment cost of the battery, which means that the separation of car and electricity makes the purchase price cheaper. According to the price at that time, with a three-year installment payment, the down payment for a NIO ES6 can be reduced by about 20000 yuan, and the monthly supply can also be reduced by about 2000 yuan. Moreover, the car electric separation method also solves the problem of battery residual value, allowing new energy vehicles to have better prices in the second-hand car market and improving their resale value.
In June last year, NIO also reduced the starting price of vehicles by 30000 yuan by canceling the free battery swapping rights in the BaaS solution, allowing NIO's starting price to directly drop to 228000 yuan.
Continuously using BaaS solutions to adjust prices is related to NIO's sales and profitability. In the current situation where Ideal Automobile has stable sales and achieved profitability, NIO, once known as "Weixiaoli", feels the pressure of falling behind. The just released financial report shows that in 2023, the company delivered a total of 160000 vehicles, a year-on-year increase of 30.7%, which is far from the annual sales target of 245000 vehicles. In 2022, Li Bin stated that he wanted to achieve breakeven in the fourth quarter of 2023. However, in the fourth quarter of 2023, NIO suffered a net loss of 5.369 billion yuan, far from the time to discuss profitability.
In addition to price adjustments to drive sales, NIO has also decided to lay out a second brand.
At the strategic communication meeting of Weilai's long-life battery on March 14, Qin Lihong, president of Weilai, confirmed that the second brand of Weilai is "Ledao", and its positioning is not low-end brand, but benchmarking Tesla and facing the mainstream market. Li Bin stated that the layout of the second brand is because the foundation has already been laid. NIO's investment in electrification, intelligence, and overall vehicle development can lead to the development of a second brand at a lower cost. The brand claims to be "cheaper than Tesla Model Y" on the one hand, based on NIO's overall capabilities, and on the other hand, relying on domestic supply chain, manufacturing and other capabilities.
Public information shows that the "Ledao" brand will be released in the second quarter of this year, with the first product expected to be launched in the third quarter and delivered in the fourth quarter. It remains to be seen whether the combination of NIO's price reduction and the second brand can drive NIO's delivery volume and form a scale effect.
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