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After only achieving about 60% of the sales target last year, Li Bin, Chairman and CEO of NIO, recently conducted an internal summary and outlook. According to a later Auto report, Li Bin stated in his first internal letter released in 2024 that the company's overall performance last year did not meet expectations and needed to systematically improve its organizational capabilities as soon as possible.
Last year, NIO gradually switched its models for sale to the second-generation platform, released mobile phone products, obtained independent production qualifications, and received large investments from the Middle East. But Li Bin said that 2023 will be a challenging and unforgettable year for NIO.
The main reason is that NIO's main business car sales are still below expectations, and there is still a certain gap from the target of doubling sales to 250000 units at the beginning of the year. Reflected in performance, after a significant month on month contraction in the third quarter, a net loss of 4.557 billion yuan was still recorded.
Li Bin stated that NIO's focus will be on building system capabilities. Each department needs to clarify the essential logic and key success factors of the business, set clear and defined goals, use resources on the cutting edge, timely review and continuously improve delivery results.
The intelligent electric vehicle industry has a large scale and a long industry chain. A 1% gap in system capability means a 10% gap in sales and profitability. In his view, in the past few years, NIO's business boundaries have expanded rapidly, and many projects have caused resource waste due to inadequate business understanding and management.
He stated that the company's investment in product technology research and service infrastructure needs to be combined with cost control. "The company's resources are limited, and we are still suffering losses from R&D and infrastructure investments. We need to continuously improve our financial performance to support the company's sustainable development. We have a responsibility and obligation to make good use of every penny invested by investors and shareholders."
"In 2024, we must resolutely avoid ineffective and inefficient investments, and save every penny that does not create value for users and the company," Li Bin said in an internal letter.
Currently, the competition in China's new energy vehicle market is becoming increasingly fierce. Li Bin said that the next two years will be the most important stage of industry transformation, and the level of competition will be beyond imagination. "We will face stronger competitors and more excellent products, a more intense price war and a more complex public opinion atmosphere. Every colleague should have sufficient mental preparation, give up illusions, and face challenges directly."
To this end, Li Bin further clarified the high priority development priorities for 2024, including ensuring long-term investment in core key technologies, ensuring leading advantages in technology and products, and delivering on time and with quality; Ensure that sales and service capabilities can cope with fierce market competition, and sales can be quickly converted into sales; Ensure that the research and development of 9 core products from 3 brands are progressing according to schedule.
Li Bin also mentioned the priority of future business development when releasing a letter to all employees in November last year. In the latest statement, NIO has added quality delivery and sales conversion. Previously, NIO was unable to deliver NIO ET5 and ET7 as soon as possible due to chip shortages and process improvements. The latter was only delivered one year after its release.
For NIO, the situation in 2024 will be even more severe, as the NIO brand will not release new models, and only the sub brand Alps will have new cars launched in the second half of the year. But Li Bin believes in the letter that the lack of new car launch tasks in 2024 is the window for NIO to enhance its system capabilities.
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