When I wrote this article, NIO’s share price fell below $5, setting a new low since listing. On the second day of the NIO IPO, its share price has soared to $12.69, with a market capitalization of $13.019 billion.
Below, I decided to focus on the NIO Power solution, and talk about how we see NIO Power and how NIO changes the industry.
In NIO’s business system, NIO Power is more important than ES8, ES6, NIO House…any other product/business. NIO Power is at the absolute core of NIO’s business system. The automotive industry pays attention to the barrel effect, and how much water can be loaded in the barrel depends on the shortest piece of wood. But NIO Power is a magic board. It is not only long enough, but also can be grafted to other short boards to virtually increase the maximum capacity of the barrel.
In order to better answer “How does NIO change the industry?”, I decided to take a moment to talk about how the automotive industry defines the user experience before NIO.
Prior to June 22, 2012, the Tesla Model S had not yet begun delivery, and the user experience for the entire automotive industry was defined by traditional car companies.
When you own a Mercedes-Benz, what user experience “processes” will you experience during the life cycle?
In this process, you will be exposed to 4S store sales, banks, insurance, vehicle management, gas stations, used car dealers, but the only company that is not in contact with Mercedes-Benz itself.
Seeing this, most people still don’t realize the seriousness of the problem. After all, until today, more than 95% of the user experience “process” in the automotive industry is like this.
On June 22, 2012, Tesla delivered the first Model S. Around the first smart electric car, Tesla’s business has expanded horizontally to direct sales, delivery, service, and charging (overcharge + destination charging + home charge).
For a startup, premature involvement in multiple related areas and high business complexity significantly increased operational risk. But at the same time, Tesla succeeded in bringing the company’s lifecycle experience process to the company cut down two: the regulatory authorities (car management, traffic police, etc.), and Tesla.
Everyone knows the high threshold of the auto industry, and does not say that the cruel survival of the fittest in China’s new car movement has begun. Elon Musk’s evaluation of the establishment of a smart electric car company or entering the automotive industry is idiocy squared.
So, what is the performance of Tesla Motors?
From 2015 to 2018, Tesla ranked the last three in the reliability ranking of Consumer Reports and the number one in user satisfaction for three consecutive years. The two conflicting indicators are concentrated on the same brand. In addition to the innovative experience that Tesla has brought to the leading position in the smart electric field, the fully reconfigured user experience “process” is the real trick to impress users.
The barbarian Tesla rebuilt the user experience “process” with a completely different strategy and achieved great success; for the people in the traditional auto industry, they could not understand why Tesla spent a lot of energy involved in multiple The field increases business complexity, and it is even more difficult to understand that consumers will be most satisfied with brands that have poor workmanship, poor interiors, and the most reliability.
This is in line with the typical response of people in the original industry to subversive innovation: invisible, incomprehensible, unable to catch up.
As mentioned earlier: NIO Power is at the absolute core of the NIO business system. The failure of a single model and the failure of a certain technology sector can be compensated or corrected by increasing attention and strengthening investment. However, if NIO Power fails, it shows that NIO’s mission and business model have gone wrong. This is the failure of the basic route and the failure of the foundation.
NIO officially defines NIO Power:
NIO Power is a mobile Internet-based power-on solution with a wide-ranging network of charging and replacing facilities. Based on NIO Cloud technology, it provides users with exclusive power-on and one-button power-on experience beyond expectations, making powering more convenient than fueling.
The key words here are based on mobile internet, charging and switching, and cloud technology. In the cloud, the mobile charging car, the power station, and the super charging pile of the power supply end are connected to the vehicle at the power demand end through the road service team.
Today, NIO has deployed 100+ power station and more than 500 charging vehicles in first- and second-tier cities across the country. Next month, NIO’s super charging station will be officially opened.
When any one of the owners of NIO has a charging demand, they only need to place an order at NIO App, and the order is submitted to Cloud. The background is based on the best data, the nearest and lowest cost charging facility based on LBS unified scheduling. Meet the user’s charging needs.
Let’s first demonstrate the rationality of NIO Power. Shen Fei, vice president of NIO Energy, said that the group buying fuel vehicles and electric vehicles has different core demands:
In fact, Tesla and NIO have reached an agreement on this issue, and Tesla has invested more energy to solve the user’s charging problem earlier. In my opinion, the Tesla Super Charging Station Network is a very good benchmark for building a user experience moat.
Li Bin said that BBA is a 1.0 company, Tesla is a 2.0 company, and NIO is a 3.0 company. This sentence will easily lead to the instinct of most people. We mentioned earlier that the key words of NIO Power are based on mobile internet, charging and switching, and cloud technology. In the dimension of NIO Power, I think this sentence is true.
Shen Fei said that a gas station is centralized, and NIO Power is decentralized. How do you understand this words?
The restaurant is centralized, and the takeaway is decentralized; the earliest postal delivery is centralized; the express delivery is decentralized; the decentralization is the network of supply and demand connected through the mobile Internet, losing the clear central control node consists of a large supply and demand network composed of a large number of supply and demand nodes.
The efficiency of the decentralized model is much higher than that of the centralized model. For example, the MeiTuan and Drip Taxis have greatly improved the efficiency of matching between supply and demand, and also brought a better user experience.
However, NIO Power actually has bugs: the mobile charging car that can be “moved” in NIO Power has decentralized conditions, but the “unmovable” power station and the soon-to-be-in-charged ultra-filled pile are essentially centralized charging facilities. . How to solve it?
All the vehicles on the demand side can be “moved”. By one-click power-on to pick up the car and exchange passengers, it is also the human-sea tactics. NIO provides a decentralized user experience based on the centralized energy model.
NIO Power’s unified and high-quality user experience has surpassed the Tesla overcharge network that is maintained by dedicated personnel, exclusive to Tesla owners, and the highest output power. However, there is a fatal flaw here: the business model is not established.
Think again about how NIO provides a decentralized user experience based on a centralized energy model: picking up cars and man-farming tactics. This tactic is not very clever, and it is not fundamentally different from the O2O that has been popular in all walks of life in the past few years.
NIO can’t avoid a problem: NIO Power can’t make a profit anyway, according to the current energy worry-free package price and service. Of course, Li Bin once said that NIO’s position on NIO Power is “not making money, and hopes to be flat at the end”. But according to current pricing, NIO Power is unlikely to break even in any case, even if it does not talk about one-time fixed input costs, light energy costs + labor costs.
I suddenly found out that the order in which we discussed NIO Power is consistent with the values of Li Bin and NIO. Let’s talk about NIO Power’s unparalleled user experience and its advanced concept. Then we will discuss whether it can make money or be flat, and whether it will be sustainable in the long run. In fact, this is the two words of Li Bin’s highest frequency: user experience, system efficiency.
NIOs style is often to consider the user experience first, followed by the systematic efficiency of the entire model, but as mentioned earlier, NIO Power’s system efficiency may have room for improvement, but this business must not be able to breakeven.
We have clearly stated at the beginning that NIO Power is one of the most “excellent” elements of NIO. It reflects the mission of NIO and the business model designed by Li Bin. If it can’t be self-financing, does that mean that the company mission is a beautiful big bubble?
In fact, Amazon launched the Amazon Prime membership system in 2005; when JD decided to build its own logistics in 2007 and Tesla established an overcharged network in 2012, it encountered similar challenges. To this day, none of the three leading or even ranked businesses in the industry has achieved breakeven.
Why do we believe that NIO Power can break even?
Is NIO Power the closed O2O or the Tesla overcharge network in the mobile Internet era?
I prefer to believe that NIO Power is the next Tesla overcharge network.