Nio’s survival is the most important, CEO says, as ES8 released 14,100 USD cheaper than previous generation
Updated Sep 1, 2024 (23:23 China Time): We revised the wording to ‘Nio’s survival is the most important’ (蔚来活下去是最重要的). Here is the full recording of the speech.
At the media event following the start of the Nio ES8 pre-sale, William Li explained how the company saved costs to offer such aggressive pricing for its flagship SUV. Li also said survival is the top priority for the company now.
“We brought the price of ES8 where it should be”, Li said during the media briefing. “The price adjustment is not a short-term move but a result of Nio’s ability to adjust,” the CEO continued.
The ES8 is Nio’s first mass-produced car, launched in 2018. On August 21, it released its third generation, which starts pre-sale at 416,800 yuan (58,050 USD) for the 100 kWh battery version, which is 25% lower than the 518,000 yuan (72,140 USD) starting price of the previous generation ES8. The BaaS price (car without battery) is 308,800 yuan (43,000 USD).
The new ES8 will launch in late September at Nio Day, and based on CarNewsChina sources within the company, the launch price will be even lower than the presale start, starting under 300,000 yuan for the BaaS version.
Getting costs under control
William Li explained how the cost was saved to achieve such a cost reduction, mentioning a few main aspects. Nio renegotiated the cost with suppliers, lowering the procurement cost. R&D cost was spread across multiple models, sharing the core technologies such as the 900 V charging platform, rear motor, and in-house developed chip. The ES8 also underwent some material adjustments with a reduction of aluminium content.
William Li particularly emphasised that their in-house developed Shenji NX9031 5 nm chip “really saved a lot of money,” compared to the second generation ES8, which used the Nvidia Orin X chip.
Talking about R&D cost, Li admitted that in the past, “not every penny of the 60 billion yuan investment was highly efficient” and there is still room for improvement. Li said the company will set evaluation models for its R&D departments, tracking the return of investments in short-term or long-term periods. “Some investments may return in 3 months, 1 year, or 2 years,” Li explains. Nio will not reduce the R&D investments but will try to improve efficiency.
Li also addressed the existing customers’ backlash over the new pricing, as the new ES8 is 101,800 yuan (14,100 USD) cheaper than the previous generation. “Nio must prioritise the bigger picture as survival is the most important thing. The new pricing may hurt the feelings of some existing users in the short term, but in the long run, this pricing strategy will help Nio maintain its competitiveness in the fierce market.”
Ono L90, Nio ES9, no MPV
When asked about comparisons with the entry-level L90 SUV, the Nio President Qin Lihong stated that L90 is aimed at families, while ES8 is for those seeking “high-end experience” and emphasising luxury.
William Li also reiterated that the company have no plans for MPV in China and teased the ES9 upcoming flagship, which will be an SUV variant of ET9. “One thing I can reveal is that the ES9’s frunk will definitely not be as large as the ES8’s.”, Li teased. Nio ES9 will launch in the first half of 2026.
Nio never share the number of pre-orders for their vehicles, however, Qin Lihong said that the number of pre-orders of the new ES8 has surpassed those of the Onvo L90. Nio ES8 is already available in 400 stores across China and will launch in late September at Nio Day.
