Introduction | Lead

Recently, NIO released its second-quarter financial report, which showed revenue of RMB 17.45 billion, a year-on-year increase of 98.9%. Among this, vehicle sales and related revenue reached RMB 15.7 billion, up 118.2% year-on-year. The net loss was RMB 5.05 billion, a decrease of RMB 1 billion compared to the same period last year. As one of the "Big Three" of China's new energy vehicle makers, NIO's journey has been full of ups and downs. With the launch of its sub-brand Joyway, is NIO finally turning the corner?

Produced by | Heyan Auto Reading Studio

Written by | Cai Jialun

Edited by | Heyanzi

Total words: 1705

Reading time: 3 minutes

With the arrest of individuals suspected of spreading rumors about NIO's bankruptcy, the uproar has subsided, and NIO continues to move forward.

NIO has continued to invest in technology research and development and battery swap network construction, ultimately delivering impressive results in the second quarter of 2024. According to NIO's founder, Li Bin, NIO now holds over 40% of the domestic market share for pure electric vehicles priced above RMB 300,000. He believes that with the economies of scale, NIO will continue to optimize its product cost structure and aims to achieve a gross margin of 15% for its vehicles by the fourth quarter of this year. In the second quarter of this year, Tesla's gross margin for vehicle sales was 13.9%. If NIO can achieve a gross margin of 15% in the fourth quarter, it will have even broader development prospects.

△NIO dispels rumors of bankruptcy with its second-quarter financial report and Joyway L60

Can NIO shake off its "bitter path"?

The key turning point for NIO was the launch of its sub-brand Joyway, which has garnered more consumer confidence in the company's future. The positive results in NIO's second-quarter financial report have effectively refuted the long-standing rumors of its bankruptcy.

While NIO still lags behind LI Auto in sales, its production scale and output value remain stable. Compared to most new energy vehicle makers that have been eliminated in the industry's development, NIO boasts advantages in self-developed technology and industrial scale. In terms of sales, NIO delivered a total of 57,400 vehicles in the second quarter, a year-on-year increase of 143.9% and a quarter-on-quarter increase of 90.9%. In August alone, NIO delivered 20,176 new vehicles, marking the fourth consecutive month of delivering over 20,000 vehicles. Li Bin revealed that NIO expects to set a new record for total deliveries in the third quarter, further consolidating and expanding its market share.

△NIO has delivered over 20,000 vehicles for four consecutive months

Is Joyway L60 the "rebel" of the industry?

The highly anticipated first model from Joyway, the L60, will be launched on September 19. Joyway has high hopes for the L60, positioning it as a mass-market family car that directly competes with Tesla's Model Y. With a pre-sale price starting at RMB 219,900, the L60 offers a more competitive price than Tesla's Model Y and can share NIO's battery swap network, as well as its high-speed NOA and urban NOA features. The biggest advantage of the L60 is that it offers the core technologies found in high-end vehicles priced above RMB 300,000 at a family car price point. While the L60 may not incorporate all of NIO's technologies, simply accessing NIO's battery swap network provides significant convenience for owners.

NIO has made ample preparations for the L60. It is reported that NIO has already planned its entire product line for 2025 and 2026 to ensure the production schedule of the L60. NIO's third factory is expected to commence production in the third quarter of next year. Currently, the combined monthly sales of all NIO models barely exceed 20,000 units, while the sales target for the L60 is 20,000 units per month, making it a key contributor to NIO's overall sales.

△The Joyway L60 will be a key contributor to NIO's sales

'Tech-driven' NIO is the future

Compared to some other new energy vehicle makers, NIO's development hasn't been smooth sailing, but it has always been a "tech enthusiast." Since 2016, NIO has invested a cumulative total of RMB 50 billion in research and development, laying a solid foundation for its growth. Currently, NIO has established 12 full-stack technology layouts, with self-developed technologies in various aspects of smart electric vehicles. In September 2023, NIO released Sky OS, its full-stack vehicle operating system, which is considered the first domestic smart electric vehicle operating system in China. It covers various areas such as vehicle control, intelligent driving, smart cockpit, and mobile internet, and will be first installed in the Joyway L60. In terms of intelligent driving systems, NIO has its own strengths. In April 2024, NIO announced the full rollout of its NOP+ urban navigation-assisted driving function to users, covering 726 cities.

In July of this year, NIO announced the successful tape-out of its self-developed 5nm automotive-grade intelligent driving chip, Shenji NX9031, marking a significant breakthrough for domestic auto companies in overcoming technological barriers. With increasing competition in the automotive industry, more and more auto companies are entering the live streaming space for product promotion. However, while short-term traffic surges can generate temporary buzz, long-term success ultimately depends on core technologies and craftsmanship that win over consumers. NIO is committed to building a moat around its technology.

△The intelligent driving chip Shenji NX9031 and Sky OS operating system are NIO's greatest strengths

Commentary

NIO, once underestimated by many, has endured for a long time but has remained steadfast on its self-research path. These hardships and silences may soon bear fruit. With the upcoming launch of the new Joyway L60 model, NIO is poised to shake off its "bitter path" and embrace the "joyful path" ahead.

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