On December 4th, NIO appeared in the credit information management system of vehicle manufacturing enterprises under the Ministry of Industry and Information Technology (hereinafter referred to as "MIIT"), with catalog number 214. This also means that NIO has finally obtained independent automotive production qualifications, and the tail logo of "JAC NIO" is about to become the past tense.
According to the announcement released by Jianghuai Automobile, Jianghuai Automobile will put three asset packages on the shelves this time, among which Asset Package One and Asset Package Three were acquired by NIO Automobile for a total price of 3.158 billion yuan. Specifically, the transaction price of the asset package is 1.666 billion yuan, involving inventory, fixed assets, and construction in progress of the three factories of the passenger car company; The transaction price for the three guarantees of assets is 1.492 billion yuan, involving the structures and equipment of the Xinqiao factory of the passenger car company.
A reporter from China Business Daily noticed that at the same time, NIO's performance and financial situation have also improved. NIO Auto's third quarter financial report released on December 5th showed that its revenue was 19.07 billion yuan, a month on month increase of 117.4% and a year-on-year increase of 46.6%; The delivery volume in the third quarter was 55432 vehicles, a month on month increase of 135.7% and a year-on-year increase of 75.4%, both of which reached historical highs. Meanwhile, cash reserves reached 45.2 billion yuan, an increase of 13.7 billion yuan from the previous quarter.
"From a manufacturing perspective, if we manufacture entirely independently, manufacturing costs will decrease by 10%. In 2024, we will not experience product switching disrupting sales rhythm, and overall performance will be better than in 2023." Li Bin, founder, chairman, and CEO of NIO, summarized at the financial report meeting.
Complete the final puzzle of the whole vehicle factory
According to the credit information management system for vehicle production enterprises on the website of the Ministry of Industry and Information Technology, the company name is NIO Automotive Technology (Anhui) Co., Ltd. (hereinafter referred to as "NIO Technology"), and the legal representative is NIO Automotive President Qin Lihong. The catalog number is 214, which corresponds to the catalog number in the details of the declared vehicle models in the "Road Motor Vehicle Production Enterprises and Products" enterprise.
On December 5th, one day later, Jianghuai Automobile announced that it had listed multiple assets of Jianghuai Automobile Passenger Vehicle Company's three factories for trading in three asset packages, with a total transaction price of 4.576 billion yuan.
Among them, NIO Technology has become the transferee of Asset One Package and Asset Three Package, which respectively involve inventory, fixed assets, and construction in progress of the Third Factory of the Passenger Car Company, and structures and equipment of the New Bridge Factory of the Passenger Car Company, with a total transaction price of 3.158 billion yuan; Hefei Hengchuang Intelligent Technology Co., Ltd. became the transferee of the second package of assets, with a transaction price of 1.418 billion yuan, involving the buildings, ongoing construction, and land use rights of the third factory of the passenger car company.
The reporter learned that the first and second advanced manufacturing bases of Jianghuai Automobile acquired by NIO are NIO's F1 and F2 factories, which are currently responsible for producing all NIO's products.
In response to this, the management of NIO Automobile stated in the third quarter financial report that regarding the qualification of vehicle production, the relevant manufacturing cooperation agreement between the company and Jianghuai Automobile is still being fulfilled normally during the acquisition process, and the production activities of the cooperative vehicle models between the two parties are still continuing normally. If the acquisition is completed or there are any changes in the manufacturing cooperation mode with Jianghuai in the future, timely communication and disclosure will be made with the capital market.
However, NIO has always been a staunch supporter of contract manufacturing. Li Bin has previously stated that he will never and will never acquire qualifications. "If someone is willing to focus on manufacturing, let them do it, such as TSMC and Foxconn; while if someone is willing to focus on research and development and service, they should focus on research and development and service."
Moving back to 2016, NIO reached a cooperation agreement with JAC Motors, and NIO's models were manufactured by JAC Motors on a contract basis, with the logo "JAC Motors" affixed to the rear.
The clues of NIO's shift in thinking began at the end of October this year. At that time, Jianghuai Automobile announced that the company planned to transfer some assets through public listing, involving inventory, fixed assets, construction in progress, buildings and land use rights of the third factory of the passenger car company, as well as the structure and equipment assets of the new bridge factory of the passenger car company. The proposed listing price was 4.498 billion yuan, with a value-added amount of 286 million yuan and a value-added rate of 6.79%.
Why did NIO choose to invest heavily in acquiring car manufacturing qualifications at this time? The reporter noticed that in addition to the production and processing fees for each vehicle, NIO Automobile also needs to pay depreciation and amortization of related assets, purchased production materials, and related taxes to JAC Automobile. In addition, NIO Automobile will also pay "several compensations" for the investment in the F1 factory.
According to financial report data, from 2020 to 2022, NIO Automobile paid RMB 530 million, RMB 720 million, and RMB 1.13 billion to JAC Automobile, respectively. This is undoubtedly a "mountain" for NIO Automobile, which is trying to reduce costs and increase efficiency.
"From a manufacturing perspective, if we manufacture entirely independently, manufacturing costs will decrease by 10%." Li Bin also added an explanation at the financial report regarding the acquisition of car manufacturing qualifications.
Revenue reached a historic high in the third quarter
In addition to obtaining the qualification for car manufacturing, NIO Automobile has also drawn an upward curve in multiple performance indicators, which can be said to be a win-win situation.
Financial report data shows that in the third quarter of this year, NIO Automobile's revenue was 19.07 billion yuan, a month on month increase of 117.4% and a year-on-year increase of 46.6%, setting a new historical high; The gross profit margin of the entire vehicle was 11.0%, a significant increase compared to the previous period; Cash reserves amounted to 45.2 billion yuan, an increase of 13.7 billion yuan compared to the previous quarter; Research and development expenditure reached 3.04 billion yuan, exceeding 3 billion yuan for four consecutive quarters.
In terms of sales, NIO delivered a total of 16000 new cars in November, a year-on-year increase of 12.6%; A total of 142000 new cars were delivered from January to November, a year-on-year increase of 33.1%. In the third quarter, NIO ranked first in the electric vehicle market in China with a transaction price of over 300000 yuan, with a market share of over 45%.
NIO expects that the delivery volume of automobiles in the fourth quarter will be 47000 to 49000 units, a year-on-year increase of 17.3% to 22.3%; The total revenue was 16.079 billion to 16.701 billion yuan, a year-on-year increase of 0.1% to 4.0%.
"For the NIO brand, we will maintain sales efficiency while maintaining price stability, and will not increase sales by reducing gross profit margin," said Li Bin.
In addition to a recovery in performance and sales, what has attracted more attention from NIO is its expansion of battery swapping "social circle". In November, NIO Auto joined hands with Changan Automobile and Geely Holding to fully cooperate in the field of battery swapping.
For cooperation with Geely, both parties will work together to create two major battery swapping standard systems, "private cars" and "commercial cars", through a "joint investment, joint construction, sharing, and joint operation" model, accelerating the connectivity and collaboration of the vehicle end, station end, battery end, and operation end, and expanding the scale of the battery swapping network; The cooperation with Changan Automobile focuses more on the standardization of battery packs, battery swapping systems, standards for swapping electric vehicle models, and battery assets.
In recent years, NIO has continuously accelerated the layout of its battery swapping station network. According to relevant data, as of now, NIO Automobile has laid out a total of 2113 battery swapping stations nationwide, including 651 high-speed battery swapping stations, and completed the layout of high-speed battery swapping networks in 9 major urban agglomerations, including 7 vertical and 4 horizontal ones. In terms of battery swapping services, relevant data shows that as of November 20th, NIO Automobile has provided users with over 32 million battery swapping services.
Regarding this, Li Bin bluntly stated that NIO will open up its mass market brand battery packs and battery swapping stations to its partners, and currently the charging station business has basically reached a breakeven point. "Some investors are also interested in NIO Power's independent financing, which cannot be ruled out."
"Previously, 'oil to electricity' mainly came from mass market users. In 2024, the 'oil to electricity' conversion in the high-end market will accelerate, and the construction of infrastructure will promote 'oil to electricity'. Li Bin said that currently, NIO has more than 700 battery swapping stations in the Jiangsu, Zhejiang, and Shanghai regions, and the sales of BBA (Mercedes Benz, BMW, Audi) in the three provinces and cities have exceeded those in the same price range, indicating that infrastructure plays a very important role in promoting sales.".
It is worth mentioning that the first car of NIO's second brand Alps has also recently completed the VB car (development verification trial production prototype) trial production. "The condition of this car is very good, and we are very confident." According to Li Bin, the construction of the battery swapping shared network will start next year, which can be used by NIO, Alps, and third-party brands. In terms of sales, Alps will separate from NIO and will not share stores, only on a portion of the service network and equipment.