Nio, a prominent electric vehicle manufacturer, has managed to reduce costs for its new ES8 model by spreading R&D expenses across multiple models and achieving greater scale. The company’s founder, chairman, and CEO, William Li, emphasized the importance of survival for Nio, especially in the current competitive market.
The third-generation ES8 boasts a gross margin even with its aggressive pricing strategy, according to Li. He highlighted that maintaining competitive prices is crucial for Nio’s success in the market. The new ES8 has significantly lower costs compared to its predecessor, yet it still manages to generate a gross margin at its current price point.
Nio recently unveiled the new ES8 and began accepting pre-orders. The large SUV comes with a 100-kWh battery pack and is available for pre-sales starting at RMB 416,800 ($58,030), including the battery pack. This marks a substantial reduction of RMB 139,200, or 25.04 percent, from the previous 100-kWh version of the ES8. The BaaS battery rental plan offers an even lower starting price of RMB 308,800 for the third-generation ES8.
Deutsche Bank analyst Wang Bin’s team estimated that the final starting price for the new ES8, including the battery, would be around RMB 399,000. Nio managed to reduce costs on the new ES8 by using less aluminum in its body while maintaining high safety standards and sharing R&D expenses across multiple models.
Qin Lihong, Nio’s co-founder and president, revealed that the ES8 received more pre-orders within the same timeframe compared to the Onvo L90. Despite not disclosing specific order information, Nio’s management remains optimistic about the new ES8’s success.
Overall, Nio’s strategic cost-saving measures and aggressive pricing for the new ES8 demonstrate the company’s commitment to innovation and competitiveness in the electric vehicle market. As Nio continues to expand its product line and reach a larger scale, it is poised for continued growth and success in the industry.
