NIO Continues to Expand Its Product Line

Main Text

On December 21, 2024, at the annual NIO Day event, NIO unveiled its highly anticipated flagship model, the ET9, priced at a starting point of 788,000 yuan. Despite the buzz surrounding its launch, the on-site reaction was muted, as the announced price closely mirrored the presale estimate of 800,000 yuan, failing to spark significant excitement.

Even when considering the BaaS (Battery as a Service) option, which lowers the entry price to 660,000 yuan, the ET9 faces stiff competition from rivals offering similar pricing after discounts. Hence, the ET9's success will ultimately hinge on its product capabilities.

Nevertheless, NIO's luxury executive sedan has finally arrived, poised to confront the rigorous demands of the market head-on.

The luxury executive sedan market remains relatively stable, dominated by the likes of the Mercedes-Benz S-Class, Porsche Panamera, and Maybach S-Class, each selling over 1,000 units monthly. The Audi A8L and BMW 7 Series follow closely, with sales ranging from 300 to 1,000 units per month. The remainder fall into a third tier, with monthly sales below 100 units.

Notably, all top-selling luxury executive sedans currently utilize internal combustion engines.

Does this market lack a need for electric vehicles? Current indications suggest so. The BMW i7 and Mercedes-Benz EQS, the only two electric entries in this segment, have struggled with monthly sales in the dozens. As of November, the BMW i7 had accumulated sales of 864 units, while the Mercedes-Benz EQS managed 663, far less than the monthly sales of the Mercedes-Benz S-Class.

This is the reality the ET9 will confront upon entering the market. While some might argue that the ET9, with NIO's battery swapping network alleviating range anxiety, is not an ordinary EV, the question remains: Will a luxury electric sedan with swapping capabilities necessarily sell well?

The performance of NIO's ET7 offers some insight. After its March 2022 delivery, ET7 peaked at 4,349 units in June but has since declined, stabilizing at a few hundred units per month—a fraction of BBA's C-segment sales.

As Li Bin put it, the ET9 may be "the best car of this era," but it risks joining the ranks of acclaimed yet commercially unsuccessful products. The market is unforgiving.

Of course, this analysis focuses on the Chinese market. NIO intends to export the ET9, particularly to the Middle East, considered its second home, where it might find success.

Beyond the ET9, NIO Day also introduced the third brand, Firefly, with its inaugural model priced at 148,800 yuan. Post-event, some media deemed the price too high, but we believe it is competitive.

Our reasoning is twofold: Firstly, positioning Firefly as a high-end boutique compact car rivaling MINI and SMART, the price is notably lower. The MINI COOPER E, for instance, starts at 209,800 yuan but often discounts to 148,800 yuan due to market reception. This aligns Firefly's pricing closely with MINI COOPER E's discounted price, indicating Firefly's pragmatic approach.

SMART #1, on the other hand, starts at 154,900 yuan, exceeding Firefly's price. It has not discounted, suggesting SMART prioritizes margins over volume.

Secondly, considering NIO's BaaS plan, which separates vehicle and battery costs, the effective price for the Firefly could drop below 100,000 yuan after deducting the roughly 50,000-60,000 yuan battery cost. Is this price still steep?

Objectively, Firefly's pricing is reasonable.

Firefly's potential challenge lies in its design, specifically the triangular headlights, which have sparked considerable online debate, including criticism from NIO users.

According to "First EV Research Lab" feedback, most comments are negative, deeming the design unattractive. Whether this reflects malicious competition remains unclear.

Despite the controversial headlights, Firefly excels in other areas, from NIO's battery swapping expertise to a 4.7-meter turning radius, 92-liter front trunk, 83.4% high-strength steel and aluminum alloy body, 35,700 Nm/degree white body torsional rigidity, and standard nine airbags—all class-leading features.

Surprisingly, the Firefly's lights dominated discussions at NIO Day, likely unanticipated by NIO given the event's focus on the ET9 launch. Consequently, much of the conference centered on the ET9, with Li Bin detailing its nine key product points. What can one do?