December 3, 2022

Launching new merchandise and making large upgrades to current merchandise is a deadly factor for an automaker to do. On the other hand NIO navigates smartly from that scenario.

NIO (NYSE: NIO, HKG: 9866, SGX: NIO) as of late formally unveiled its new SUV, the ES7, which, as its control group up to now mentioned, is aimed toward competing with the BMW X5L.

However the fashion itself and the narrative about it appear much less necessary than the truth that with as of late’s release NIO has controlled to unravel a catch 22 situation that its main native opposite numbers have up to now failed to deal with.

That catch 22 situation is how an automaker can keep away from a picture disaster within the technique of upgrading its merchandise whilst pleasurable possible consumers and fending off angering current house owners.

Clearly, NIO has executed it.

For NIO, as of late’s release match used to be no longer most effective its first on-line product release, but in addition marked the largest product replace in its historical past.

All over the quick 45-minute match, NIO unveiled plans for {hardware} upgrades to current fashions, annual facelifts for current SUVs, and the ES7, its first SUV in keeping with the NT 2.0 platform.

To know NIO’s cleverness, we will be able to get started by way of having a look on the catch 22 situation that its two main native friends, XPeng Motors (NYSE: XPEV, HKG: 9868) and Li Auto (NASDAQ: LI, HKG: 2015), have up to now confronted when updating their merchandise.

In July 2019, XPeng introduced the 2020 G3 SUV, lower than a 12 months after the fashion’s preliminary release.

XPeng no longer most effective larger the G3’s vary by way of greater than 100 km at the moment, but in addition diminished the cost by way of greater than RMB 10,000.

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The transfer for sure made possible consumers satisfied, however no longer so for individuals who purchased the 2019 XPeng G3.

XPeng used to be therefore hit with a flood of lawsuits, resulting in a disaster in its emblem symbol. The corporate later introduced reimbursement programs to quell the disaster, and its chairman and CEO, He Xiaopeng, used to be compelled to say sorry, pronouncing, “I’m sorry for making everybody unhappy.”

A an identical scenario took place to Li Auto remaining 12 months.

Li Auto introduced the brand new Li ONE on the finish of Would possibly 2021, and despite the fact that the cost used to be larger by way of RMB 10,000 in comparison to the former fashion, it introduced a large number of upgrades, particularly the self-driving chip and vary.

After the announcement of the brand new Li ONE, Li Auto additionally encountered numerous lawsuits from consumers who bought the automobile in a while ahead of the release of the facelift, claiming that the corporate failed to show details about the facelift on the Shanghai auto display on the finish of April and used to be suspected of fraud.

Such lawsuits had been reported within the media for a few months after the brand new Li ONE used to be introduced, exposing the corporate to the similar symbol disaster that XPeng had up to now skilled, despite the fact that the lawsuits have since light away.

NIO as of late introduced the brand new SUV ES7, with beginning costs of RMB 468,000 and 548,000 together with batteries. The fashion is to be had for pre-order now, and deliveries are anticipated to start out on the finish of August.

The corporate additionally introduced an annual facelift of the present SUV fashions with a extra tough in-vehicle intelligence machine, Alder.

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The beginning worth for the 2022 ES8 is RMB 496,000, which is RMB 18,000 upper than the former RMB 478,000.

The beginning worth of the 2022 ES6 is RMB 386,000, up RMB 18,000 from RMB 368,000.

The beginning worth for the 2022 EC6 is RMB 396,000, RMB 18,000 upper than the former worth of RMB 378,000.

Customers who make a selection to buy a automobile below NIO’s BaaS battery condo program will be capable of cut back the cost by way of a minimum of RMB 70,000.

Those 2022 fashions will likely be to be had for pre-order this month, with deliveries beginning in August.

For NIO, if it takes a an identical strategy to XPeng and Li Auto for the ES7 and the 2022 ES8, ES6 and EC6, the situation would appear to be this.

Customers who’ve bought NIO’s SUVs in fresh months will quickly see their cars grow to be out of date and a flood of lawsuits will arrive.

For many who can find the money for NIO cars priced at a median of over RMB 400,000, they might indisputably wish to pay an additional RMB 18,000 to get the most recent product moderately than see the fashion they only bought grow to be out of date.

The sensible factor about NIO is that it sort of feels to have began making ready for as of late’s release match from a 12 months in the past. Take into account when CnEVPost reported in overdue June remaining 12 months that the corporate used to be comparing {hardware} upgrades together with 5G make stronger for current fashions?

In truth, NIO’s preparation for the improve of its current fashions started a 12 months in the past, and plenty of conferences had been held with customers right through the method.

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Whilst the ES7 is for sure thrilling in mild of as of late’s release match, NIO’s proposed {hardware} improve plan is the important thing that may permit it to keep away from experiencing symbol issues.

NIO introduced at as of late’s release the clever machine Alder, together with onboard clever {hardware}, computing platform, working machine, algorithms and packages.

Each current ES8, ES6 and EC6 consumer pays to have their cars upgraded with Alder for RMB 9,600. With the extra possibility of a 5G high-performance central gateway, the cost is RMB 12,600.

The price of those upgrades is lower than the cost build up for the 2022 fashion 12 months relative to the present fashion 12 months and can stay current consumers satisfied as smartly.

Which means that if consumers who’ve bought NIO fashions in fresh months need to use the most recent {hardware}, they are going to be capable of get them at a cheaper price.

That is an important for an organization like NIO, which expenses itself as a “consumer endeavor,” and angering current house owners would shake one of the crucial key foundations of its trade fashion.

It’s laborious for a standard particular person to make everybody satisfied, and that is very true for an organization.

On the other hand, NIO has principally controlled to make the vast majority of its customers satisfied, which is the killer talent that has allowed it to take care of an overly excessive stage of consumer loyalty.

Despite the fact that NIO’s means is repeatedly being imitated, no different Chinese language corporate has been ready to do what it has executed to this point.

This text used to be first printed by way of Phate Zhang on CnEVPost, a website online that specialize in new power automobile information from China.