Original | Car Review: Amidst a backdrop of numerous bankruptcies and acquisitions, NIO has discreetly completed its multi-brand strategy. On December 12, Li Bin, NIO's founder and CEO, revealed at the "Media Face-to-Face" event that the third brand, Firefly, will be unveiled on December 21 at NIO Day, the company's annual user event. This year, the second brand, LeDao, was launched in May, followed by the third brand, Firefly, in December, marking a decisive and rapid advancement in NIO's multi-brand approach.

"Media Face-to-Face" is an annual tradition at NIO, typically lasting several hours. Media representatives pose questions, which Li Bin answers collectively. On that day, a staggering 209 questions were posed, and Li Bin responded continuously for over three hours, standing the entire time without a break. Li Bin noted that last year there were 140 questions, and this year surpassed 200, posing a severe test of his physical endurance. However, an even greater challenge for Li Bin is the confusion surrounding NIO's multi-brand strategy.

For an automaker to embark on a multi-brand strategy before achieving profitability, NIO stands alone. Such a feat would typically be unthinkable in the automotive industry but is made possible in the magical realm of new energy vehicles. Over the past century, companies like General Motors and Ford in the U.S. have adopted multi-brand strategies after acquiring other automakers, while Volkswagen in Germany achieved its multi-brand layout through acquisitions over decades. More recently, Fiat Chrysler and PSA Group merged to form Stellantis, a multi-brand conglomerate. In the domestic market, whether it's Midea, TCL, or Anta, their multi-brand strategies are the result of later-stage mergers and acquisitions. Haier attempted to build its own multi-brand strategy but encountered numerous hurdles and never met expectations.

Most domestic automakers develop their multi-brand strategies internally. Geely's multi-brand strategy, while experiencing setbacks, has stabilized in recent years. Similarly, Chang'an, Great Wall, and BYD have also internally developed their multi-brand layouts. Geely's differentiation lies in brand characteristics and energy forms, while Chang'an and BYD's strategies are more market-niche-based. However, these companies only considered a multi-brand approach after becoming profitable. Li Bin explained to In-depth Car Reviews that U.S. investors value long-termism, are more tolerant of high-tech companies, have a longer-term perspective, and understand the lengthy journey from losses to profitability for such companies. In contrast, Chinese investors focus more on short-term profitability, often hindering sustained R&D investment in high-tech firms.

"That's why most of my funding comes from U.S. dollars," Li Bin revealed. He also defended NIO's multi-brand strategy, arguing that it is more rational. "NIO's multi-brand approach is unique," he said. First, it doesn't significantly increase additional costs. Second, it spreads out R&D expenses. Third, it broadens the target audience, facilitating scalability. Scalability is Li Bin's primary goal, as it reduces R&D costs per vehicle and increases operational revenue.

According to the plan, NIO targets the market above 250,000 yuan, LeDao the 150,000-250,000 yuan range, and Firefly the market below 150,000 yuan. Li Bin emphasized that one NIO brand cannot cover the broad spectrum from 100,000 to 800,000 yuan models, necessitating brand differentiation. Prior to LeDao's delivery in September, NIO's sales hovered around 20,000 units per month, occasionally dipping below 10,000. However, post-LeDao delivery, sales have stabilized above 20,000 units per month, with expectations to exceed 30,000 in December. During the media Q&A, Li Bin stressed that sales are projected to double next year, and profitability must be achieved by 2026, NIO's bottom line.

This year, NIO anticipates sales of around 220,000 units. With the goal of doubling sales, next year's projections exceed 450,000 units, where scalability benefits will become evident. Per-vehicle R&D costs will significantly decrease. According to NIO's 2023 financial report, R&D investment was 13.43 billion yuan with annual sales of 160,000 units, averaging roughly 84,000 yuan per vehicle. Assuming 2024 R&D investment remains similar, the average per-vehicle cost will drop to approximately 60,000 yuan, marking a substantial reduction.

It's foreseeable that NIO's per-vehicle R&D costs will plummet next year. Li Bin hopes all three brands will synergize, particularly Firefly. In the high-end compact car market, Firefly aims to disrupt. "It's smarter than a MINI and more MINI-like than a smart," Li Bin quipped, suggesting Firefly is both stylish and intelligent.

Previously, smart faced ridicule for losing its original design identity, while MINI's sales plummeted due to lackluster intelligent features, despite price cuts. Upon hearing Li Bin's slogan, even casual observers can discern Firefly's advantages, positioning, and pricing. On that day, Li Bin repeatedly inquired about the cheapest MINI's price, hinting that Firefly will compete directly with the electric MINI COOPER, currently priced at 148,800 yuan.

Jin Ge, president of the Firefly brand, also made his debut. With a background in engineering at SAIC's Technology Center, assistant general manager at SAIC's UK Technology Center, and executive director of SAIC-GM's vehicle platform, he joined NIO in 2022, bringing expertise across research, supply, production, and sales. He admitted managing Firefly is a challenge but believes it will bring many surprises.

These surprises will manifest in four areas: superior design, higher-end appeal, advanced intelligence, and sharing NIO's sales network. On December 18, ahead of NIO Day on the 21st, Firefly proactively launched its official APP, public account, and mini-program, unveiling its brand logo. This increasingly popular high-end compact car aims to capture the niche 100,000-150,000 yuan market segment. How large is this niche? According to China Passenger Car Association data, approximately 1.12 million vehicles priced between 100,000 and 150,000 yuan were sold in October. Even with a conservative 5% estimate, there's a potential sales volume of roughly 50,000 high-end compact cars, representing a significant opportunity for Firefly.

However, this is merely a theoretical opportunity, requiring a more detailed analysis post-Firefly's Guangzhou unveiling on the 21st. Details such as exterior and interior design, dimensions, space, and basic configurations may be disclosed, along with a pre-sale price announcement. Amidst uncertainty, Li Bin has taken several more strides forward... -END-

Extended Reading:

• Did the Explosion in LeDao L60 Orders Disrupt the Industry?
• Is NIO's User Experience Now Far Ahead?
• To Alleviate Scale Anxiety, Is a 'Second Brand' a Must?
• Year-End Special Report | Li Bin: The Convergence and Reflection of an Idealist