[NIO Q&A] With global chip shortage, would you remain confident in NIO?

This article is a script from the Q&A session of NIO's earnings call on March 1. In order to facilitate reading, we have made appropriate cuts. If you want to know more details, you can click the link provided below to re-watch the earnings call.

Q: NIO’ll enter Europe later this year. I’m wondering what kind of sales volume would you expect in the longer term. There is also a lot of speculation from the press lately that NIO is getting much more serious about getting to the US. Could you share your latest thoughts about that?
A: Starting from this year, we are going to enter the European markets. We will build our own sales and service network in the European market. Right now, we have already kicked off the preparations regarding the team setup, products, and the sales, and the service network building, basically covering all aspects for our operations in Europe. But we understand the sales and the service is going to be more complicated if we decide to enter different regions and the countries. Regarding the U.S. market question, we have already kicked off the research about the U.S. market entry at a very early stage. We have started about the possible business models, strategies, and the different approaches about how should we enter the U.S. market.

Q: You seem to be quite positive about second quarter, you guided about 7,500 per month. Is that your guidance for second quarter?
A: The first quarter of the year is the low season for the EV industry because of the subsidy and other policies. Model Y has announced their pricing for the locally manufactured vehicle, but this is the normal strategy and the practice of Tesla. They cut the price, and then they can boost the order backlog. We would like to focus on the service and the experience improvement, as well as building a positive word-of-mouth reputation in the market because we do not want to cut the price. Because of our strategy, we can achieve a very stable and solid pricing with our products, which will also help with our gross margin and the vehicle gross margin. Just like I mentioned, in February, the BaaS take rate among the new orders has reached 55% and is growing every month. So with our unique competitive edges and our long-term capabilities, we believe we should be able to secure a strong footing in the market.

Q: The question is about the vehicle sales this year because since our next model, ET7 won’t kick-start deliveries till next year, how can NIO meaningfully grow the vehicle sales in 2021?
A: Starting from now to the delivery of ET7, we will mainly rely on three current products, including ES8, ES6, and EC6 for the sales performance. In terms of the product life cycle, we believe all the three models are quite competitive in the market compared with the gasoline cars and other EVs. But on the other hand, we would like to further expand our sales and service network. Before the launch of the NT 2.0, we will mainly focus on the sales and service network and experience improvement to improve our sales performance. At the same time, we also have Battery-as-a-Service and the 100-kilowatt-hour battery pack delivery. This is going to contribute to the conversion from ICE to BEVs. We're witnessing the trend is accelerating from this conversion. So we believe with our current sales target, we should have the competence to achieve the objective.