In recent months, XPeng Motors has staged a remarkable comeback with its two hit models.

Among the new players in the electric vehicle (EV) industry, Li Auto has successfully landed, and XPeng Motors has navigated through a challenging period. Only NIO, with its premium positioning, continues its quest for a "breakthrough."

Sales data for December revealed that "NIO, XPeng, Li Auto" achieved sales of 31,138, 36,695, and 58,513 vehicles, respectively. Although NIO's sales surpassed 30,000 vehicles, they significantly lagged behind Li Auto's.

On December 21, during the "2024 NIO Day," NIO officially unveiled its third brand, "Firefly." The new vehicle is pre-sold for 148,800 yuan and is scheduled to be officially launched and delivered in April next year. Judging from NIO's launch of "Firefly," it is evident that the company is in a hurry, especially considering that it has only been a few months since the introduction of its second brand, "Ledao."

In its analysis of NIO's third-quarter report, Kanjian Finance previously mentioned that NIO currently dominates the high-end EV market with a significant share. However, due to the limited capacity of this market, NIO must expand into lower-tier segments to boost sales. Given the current situation, NIO's successive launches of the sub-brands Ledao and Firefly are aimed at exploring these lower-tier markets.

In an internal letter, Li Bin emphasized, "Doubling sales in 2025 and achieving company profitability in 2026 are non-negotiable tasks," highlighting these as the primary goals.

In 2024, NIO delivered a total of 221,970 new vehicles. For 2025, the company has set a sales target of up to 440,000 vehicles. To achieve this ambitious target, Firefly, with its lowest price point, will naturally have to shoulder a significant portion of the KPIs.

Over the past few years, several new players have turned around with A0-class models. A prime example is Leaping Auto, often referred to as the "little Li Auto," which turned its fortunes with its A0-class offerings.

Back in 2019, Leaping Auto's first smart electric sports car, the S01, faced an unfavorable start, with total deliveries of only around 1,000 vehicles in its first year, falling short of Zhu Jiangming's delivery target of 10,000 vehicles. After encountering setbacks, Leaping Auto quickly launched the Leaping T03 in 2020, an A0-class pure electric microcar with a range of 403km and a starting price of 68,900 yuan. Surprisingly, the Leaping T03 was a game-changer, with deliveries of 10,266 vehicles in 2020, pushing Leaping Auto's sales directly over 10,000 vehicles. In 2021, deliveries of the Leaping T03 exceeded 36,000 vehicles, and Leaping Auto's cumulative deliveries reached 43,748 vehicles that year.

NIO undoubtedly hopes to replicate the "miracle" of the Leaping T03 with its Firefly.

However, from a product positioning perspective, it may be challenging for Firefly to replicate the success of the Leaping T03.

While demand for pure electric A0-class cars is indeed robust, with the penetration rate of A0-class new energy vehicles reaching 59% in 2023, competition in this segment has intensified in 2024. The penetration rate has grown rapidly, reaching 74% in November, an increase of nearly 50% from the previous year. However, the popular pure electric A0-class cars on the market are low-priced, cost-effective models like the BYD Seagull, Dolphin, Wuling Bingguo, and Geely Xingyuan, rather than expensive premium pure electric cars with limited practicality, such as the BYD Seagull, which sells over 50,000 vehicles per month with a starting price of only 69,700 yuan.

According to information, Firefly's models are positioned as premium pure electric minicars akin to the MINI, but premium pure electric minicars have struggled in the Chinese market. For instance, its direct competitor, the smart #1, with a starting price of 154,900 yuan, sold 2,569 units in October. Meanwhile, the Zeekr X, with similar dimensions and pricing, sold 1,208 units in the same month. Based on competitor data, it appears challenging for Firefly to "take off."

In just half a year, NIO has successively launched the two sub-brands Ledao and Firefly.

It is clear that NIO is indeed feeling the pressure.

NIO's anxiety is justified. On one hand, the company remains deeply entrenched in losses. According to NIO's third-quarter report, the company reported a net loss of 5.06 billion yuan, compared to a net loss of 4.557 billion yuan in the same period last year, and an adjusted net loss of 4.412 billion yuan, up from 3.953 billion yuan in the same period last year. NIO's losses in the third quarter of this year have expanded compared to the same period last year.

It is worth noting that since its establishment in 2014, NIO has accumulated losses exceeding 100 billion yuan, making it the most loss-making among the many new players in the EV industry.

As Kanjian Finance has previously mentioned, the automotive industry is highly scalable. Only when sales increase can automakers potentially reduce losses and ultimately become profitable. For high-investment companies like NIO, monthly sales of 20,000 vehicles are far from sufficient to support its current investments. After all, NIO had nearly 10,000 service personnel at the end of 2023. Therefore, NIO has continuously launched new brands in hopes of boosting sales.

On the other hand, the new energy vehicle industry has entered a mature stage. According to data released by the China Passenger Car Association, the national new energy vehicle retail penetration rate in November 2024 was 52.3%, maintaining above 50% for three consecutive months since new energy vehicles first surpassed a 50% penetration rate in August this year. As the industry matures and recent crises faced by second-tier new forces such as Nezha and Geely's EV brand make financing in the new energy vehicle industry increasingly difficult, this is not good news for NIO, which has been incurring losses. Since its establishment, NIO has raised more than ten rounds of funding, with a total disclosed funding amount exceeding 100.8 billion yuan.

Despite raising considerable funds, NIO's financial situation remains challenging due to continuous high investments. As of the third quarter of this year, NIO's cash and cash equivalents amounted to 23.79 billion yuan, restricted cash to 4.92 billion yuan, and short-term investments to 13.36 billion yuan, totaling just over 40 billion yuan. Without additional funding, NIO's cash on hand can sustain operations for about two years at the current rate of losses. From this perspective, NIO's decision to accelerate the launch of new brands is understandable.

In this fiercely competitive environment, NIO's choice to accelerate the launch of new brands can indeed alleviate pressure to a certain extent. However, it is crucial to note that NIO's current production capacity may not be sufficient to support the continuous launch of new brands. Taking Ledao as an example, it was in high demand when first launched, with 30,000 large orders within 72 hours and 45,000 large orders within six days. However, it took Ledao 64 days to deliver 10,000 orders. Therefore, while accelerating its "breakthrough," NIO must also focus on stabilizing sales and achieving profitability. This understanding is paramount.