On September 19th, NIO founder Li Bin co produced a video with Ledao CEO Ai Tiecheng at the Ledao L60 press conference. For 43 seconds, the corners of their mouths couldn't help but curl up.
This may indicate that the pricing of the Ledao L60 was successful at that moment.
From the official announcement of the Le Dao name in March to the official launch of the first model, the pricing of the Le Dao L60 has been highly anticipated for six months. At the end of the press conference, it was finally revealed that the full vehicle purchase price starts at 206900 yuan; Rent electricity starts at 149900 yuan.
For mass brands, Ledao bears the responsibility of "supporting the family", and L60 is the first to bear the brunt. It needs to have cost-effectiveness, be able to compete with competitors and rivals, and maintain a considerable gross profit margin, contributing to NIO Group's turnaround from losses to profits. Therefore, pricing is crucial.
The overall price of the Ledao L60 is more than 10000 yuan cheaper than the Jike 7X, which was launched the next day, and even 43000 yuan cheaper than the Model Y. Ai Tiecheng once revealed in an interview that he has taken into account several possible price reductions for the Model Y in the future.
The pricing of the Ledao L60 still has a gross profit margin, so everyone can rest assured, "said Li Bin. The confidence in the low pricing of Ledao L60 comes from NIO's 10-year system strength, mature supply chain system, research and development investment, and energy system.
However, despite the 5-fold server expansion of the Ledao APP and official website that night, which had a slight lag due to explosive orders, some feedback from social media platforms still highlighted Ledao's anxiety as test drives began. There are many consumers who are returning to holding onto their coins and observing, as this month's benchmark models such as the Jike 7X, Avita 07, and Zhiji's new LS6 are also on the way.
Although NIO's financial report heavily relies on Ledao's ability to quickly generate its own blood, the road ahead for Ledao is not smooth. Li Bin, who adheres to long termism, often says that the automotive industry is a marathon on a muddy road. The ups and downs and competition are normal, and no company has done everything right from the beginning. "Even Tesla was founded 16 years ago before it became profitable. We will definitely have to pay tuition fees in many places in the future, but the important thing is that the entire company will become better and better
Not just challenging Tesla
Li Bin has a high goal for Ledao's products: "Every car hopes to increase in volume, and every car can form a gravity field in its niche market, becoming a gravity model. Models like Model Y can sell one million units worldwide
And what Ledao L60 wants to take away is not just Tesla's cake.
The rental version of the Ledao L60, which has separated the battery price, has a starting price of nearly 150000 yuan, which means that the Ledao L60 targets all models within the price range of 150000 yuan to 250000 yuan, regardless of power form. Li Bin stated that the development trend of oil to electricity conversion is irreversible, and buying an electric car is a one-step choice. He hopes that the Ledao L60 will be an important challenger to traditional, joint venture mid size SUV oil vehicles.
In his opinion, the challenge of buying out a complete vehicle is for electric cars; The price challenge after BaaS is for hybrid models such as petrol cars and extended range vehicles. The price of gasoline cars may be cheaper, but the cost of use is higher; for electric cars, everyone already has a positioning system, and it has always been difficult to determine the price of gasoline cars and electric cars. Electric cars are like paying in advance for the money saved for many years. With BaaS, we have a price that is convenient for gasoline car users to locate
Li Bin and Ai Tiecheng have calculated this account very clearly. The monthly electricity cost of the BaaS version is almost equal to the average price of a 60L tank of oil. "Even without considering the purchase tax discount, the price of the Ledao L60 is more cost-effective than the CR-V, RAV4, and Tiguan, and the maintenance cost is also cheaper. Other experiences will also be better
But fundamentally, NIO's battery swapping mode is its confidence in challenging gasoline and hybrid models, and can solve the problem of range anxiety. More than 60% of users who buy Ledao do so because they can replace their batteries, "Li Bin revealed. A first tier salesperson from a third tier city also told 21st Century Business Herald reporters that battery swapping is Ledao's biggest competitive advantage.
Not long ago, NIO officially announced plans to add and replace power in every county, which also benefited from the birth of the Ledao brand. "Without the support of Ledao's quantity, it would have been delayed for at least two years because NIO's quantity alone is difficult to sustain," said Li Bin.
The mystery behind pricing
The most critical factor for product volume is price. The Ledao L60, which defines products based on the core needs of home users, has also undergone a game and balance in the decision-making of product hardware, functions, and materials, which is related to competitiveness and cost.
For pricing, the calculation rules of the Ledao team are very strict.
Li Bin said that the Ledao L60 is NIO Group's first product that strictly evaluates the user benefit return of each function based on the target market user needs. "We have a product value formula, and the internal level of detail is much more detailed. Each function configuration is evaluated based on the mainstream household user's driving scenario and frequency to evaluate the return to users
For example, safety is the top priority for family cars, so the Ledao L60 uses submarine grade steel to ensure safety performance; Comfortable and spacious space is also what family users value the most. Therefore, based on the balance of cost and functionality, the Ledo L60 has chosen the dual ball joint MacPherson front suspension that combines handling and comfort. "We have seen such a small turning diameter, huge cabin space, and comfortable chassis, and I definitely won't drive the L60 to play cool or drift on the track for everyone. What kind of drift does my car play at home? This is a trade-off. I am not making a car with ultra-high performance or super strong performance. It should be flashy, economical, and completely defined according to user needs
However, the LeDao L60, which has chosen the pure visual intelligent driving technology route from a cost perspective, is still challenged by the Model Y. Without a LiDAR, it requires a more powerful intelligent driving chip to achieve urban NOA. The latest upgraded intelligent assisted driving chip of the Model Y currently has a computing power of about 720 TOPS, which is nearly three times that of the LeDao L60 equipped with Nvidia Orin-X chip.
The purchase of the entire Ledao L60 starts at 206900 yuan and the rental of electricity starts at 149900 yuan, which is more than 10000 yuan cheaper than the Jike 7X launched the next day. Although more expensive than the Ledao L60, An Conghui, CEO of Jike Motors, believes that the starting price of 229900 yuan is "reasonable and competitive". "We are very confident in achieving a gross profit margin of 15%. Jike has 30 years of Geely's car manufacturing experience and foundation, and has the ability to achieve economies of scale
On the other hand, NIO's gross profit margin has just rebounded. The financial report shows that NIO's gross profit margin in the second quarter of this year was 9.7%, compared to 1% in the same period last year, and 4.9% in the first quarter of this year. During the group interview after the press conference, some people questioned the gross profit margin level of the Ledao L60. Li Bin introduced that the pricing of the Ledao L60 still has a gross profit margin, and "everyone can rest assured about this".
He believes that the confidence in the low pricing of the Ledao L60 comes from NIO's 10-year system strength, mature supply chain system, research and development investment, and energy system.
According to the financial report, NIO's R&D investment in 2023 was 13.431 billion yuan, exceeding the ideal 10.586 billion yuan and Xiaopeng's 5.277 billion yuan. In the past 8 years, NIO has invested over 46 billion yuan in research and development. NIO is the car brand with the largest number of charging stations and battery swapping stations in China. At the beginning of its delivery in 2018, NIO began laying out charging and swapping facilities. As of August 20th this year, NIO has built 23009 charging piles and 2480 swapping stations nationwide.
Even a good meal is afraid of being late
The pitfall in the delivery of NIO ET5, Ledao doesn't want to repeat the same mistake, 'even a good meal is afraid of being late'.
At the beginning of its listing, ET5 was highly anticipated. As the lowest priced product under the NIO brand (starting at 328000 yuan), the goal is to surpass the sales of the BMW 3 Series. On the day of its launch, orders for ET5 once overwhelmed the NIO app. However, the waiting period for ET5 from release to delivery is as long as 9 months, coupled with issues such as supply chain management and early customer complaints, which have affected the momentum of the popular ET5 model.
Two weeks before the listing of Ledao, Li Bin personally inspected the production status of Ledao L60 at NIO F2 factory. "We are still making every effort internally to strive for more than 20000 units. What can be confirmed now is that the manufacturing of the entire vehicle factory has started double shifts and will gradually climb up. The automotive supply chain is particularly long, mainly due to the quality ramp up of the entire supply chain. On the one hand, we need to ensure quantity, and more importantly, we need to ensure quality, both of which need to be improved together
According to him, the production capacity of Ledao L60 was 5000 units in October, 10000 units in December, at least 16000 units in January next year, and 20000 units in March next year.
In fact, the goal of paying 20000 vehicles per month is a direction determined in the first half of 2022. Ai Tiecheng told reporters that in order to achieve this goal, the Ledao team has been discussing with all supply chains since more than two years ago, "starting from their planning, including their subordinate supply chains. This is not just today's preparation, we have been preparing for more than two years since 2022, so I am very confident
However, in addition to the lessons learned from production and delivery, Ledao also faces new problems in the market. During the reporter's visit to the store, it was found that due to the continuous expansion of frontline sales personnel, there are still deficiencies in the professionalism of consistent product training and service experience.
Ai Tiecheng revealed in a media interview that the number of Le Dao stores will exceed 200 by the end of this year. As a brand new new new energy brand, stores are the most direct touchpoints for the brand. Although Ledao has a very fast pace of opening stores, especially in the lower tier markets where its layout is accelerating, if the personnel ratio and professional training do not keep up with the pace of opening stores, it will also affect the brand's reputation.
There are inevitable differences in target audience and strategies between Ledao Community and NIO Community. Once the user base of Ledao increases, the personnel and costs of operation will also rise. It is necessary to develop a new set of ideas to ensure the quality of services. Ai Tiecheng still needs to address the operational issues of the Ledao community in the next 3-6 months.
Whether in the sales process, after-sales process, or community operation, there is still a problem of resource allocation between Ledao and its main brand NIO. How to ensure service quality and maximize efficiency is also a long-term challenge that NIO needs to balance.