eastwest connect

Before hyping up Li Auto and playing down NIO, please study the production capacity bottleneck of NIO first!

On May 14, Myautotime released an article titled “Before hyping up Li Auto and playing down NIO, please study the production capacity bottleneck of NIO first!.”
Below is the digest.

In the hustle and bustle of price wars that have caused many car companies to lose money, NIO and Li Auto are two of the few two car companies that are free from the price war. However, with the same unchanged-price policy, NIO and Li Auto sales have walked out of different curves.

Relying on the brand concept of “creating a mobile home, creating a happy home”, Li Auto broke out against the background of the overall decline in the local auto market, frantically harvesting chips in the high-end luxury SUV market in the price range of 300,000 to 500,000.

Competitors have lowered their prices one after another. Not only did Li Auto not lower their prices, but they were still able to compete so well, which is really surprising. The outbreak of the pandemic and the Spring Festival superimposed, not only did not affect the outbreak of Li Auto car sales in January, but in April, the monthly sales figure reached 25,680.

In contrast, NIO, which has also insisted on not cutting prices, is not so lucky.

In the first three months, at least they can keep the title of “10,000”. But in the fourth month when the auto market gradually recovered, NIO directly fell below the 7,000-unit mark.

Why is there such a situation? In fact, we can find the answer in a Weibo post by Li Xiang.

On April 16, the day before the much-anticipated Shanghai Auto Show, Li Xiang, the head of Li Auto, published a cruel declaration on Weibo that chilled many friends and businessmen: From 2023 to 2025, the local auto market will enter the knockout stage. To survive this difficulty, we must desperately roll in the three levels of technology, product, and delivery.


Regarding the competition in the smart electric vehicle market, what Li Xiang really wants to express is: according to the theory that the wooden barrel is subject to one defective plank, as long as one of the three decisive factors of technology, product and delivery is out of “the defective plank”, the barrel (market size) is then limited.

In terms of technology and products, Li Auto and NIO have their own differentiated advantages, which can be said to be comparable.

With respect to the delivery capacity, Li Auto with its own factory is not a little bit ahead of NIO, which is still adopting the foundry model. The gap between NIO and Li Auto can be clearly seen from the release, launch and delivery rhythm of these two manufacturing models.

Relying on the self-built Changzhou factory, Li Auto achieves delivery immediately after release. Li Auto L9, L8, and L7 can basically achieve sales of more than 10,000 or close to 10,000 a month two or three months after their release. The heat of the golden period of new car promotion and sales is not wasted at all.

On the other hand, NIO, which does not have its own factory, from NIO ET7 to NIO ET5, from launch to actual delivery, which one is not nearly a year apart?

Not to mention wasting a huge amount of marketing expenses that cannot be converted into effective sales a year later. During the one year, various car companies spared no time to conduct a comprehensive analysis of competing products on ET7 and ET5, imitate, and improve. When you actually deliver, you would be terrified to find that the competing products of your friends have already appeared or would soon appear in the market segment you want to hit.

The competition of local smart electric vehicles is so intense with a big change over a year. Products that were considered “far ahead” when they were released were abruptly dragged down by the shortcoming of delivery capability and became “slightly ahead”.

How to make up for the shortcoming of delivery capability, hope NIO can find out its own answer.