[Exclusive] Nio Will Make Profit Faster Than Amazon Did, NEV Maker’s Founder Li Bin Says

[Exclusive] Nio Will Make Profit Faster Than Amazon Did, NEV Maker’s Founder Li Bin Says

Ge Weier

Date: Thu, 09/13/2018 - 16:45 / source:Yicai
[Exclusive] Nio Will Make Profit Faster Than Amazon Did, NEV Maker’s Founder Li Bin Says
[Exclusive] Nio Will Make Profit Faster Than Amazon Did, NEV Maker’s Founder Li Bin Says

(Yicai Global) Sept. 13 -- Chinese electric vehicle maker Nio rebounded to close up 5.4 percent on its opening day on the New York Stock Exchange yesterday after a shaky start, despite pricing its offering at the low end of the proposed range. But founder Li Bin is optimistic for the firm’s success, and believes it will turn a profit in less time than it took Amazon to do so.

The Shanghai-based firm started the day at USD6 a share, less than its offering price of USD6.26, which Li puts down to current conditions in the American stock markets.

Yicai Global spoke with Li on the day to gather his thoughts on the initial public offering and Nio’s future. Below is a transcript of the exclusive interview.

Yicai Global: Nio set the IPO price at USD6.26, the low end of the planned range from USD6.25 to USD8.25. Was that affected by recent performance of the American stock markets, or a decline in similar company’s shares, like Tesla?

Li Bin: That’s right, the overall market wasn’t friendly for our financing. But we still closed with several times as many subscriptions as we planned. Investors allowed us to set the share price freely, and we chose to set it at a low rate considering the market environment and to give our investors the possibility of long-term returns.

YG: Do you think Nio can produce and deliver 10,000 Nio ES8s before the end of this year, as planned?

LB: As of Aug. 31, we had manufactured 2,399 vehicles and delivered 1,602 -- you can see the pace of delivery is clearly accelerating. As a new company, we of course need to put effort into production and delivery, and we are quite confident that we can achieve our target and deliver the vehicles to our customers within the expected timeframe.

YG: Will the company be profitable by 2020?

LB: All companies need to make profit in the long term, but you must keep in mind that we have only been established for just over three years and still need to make new investments in research and development and user services. I see our strategy as investment, not loss making.

I do think we will make a profit someday. It took Amazon dozens of years to make a profit, and I think we can do quicker.

YG: Tesla is already working on its Gigafactory in Shanghai. How do you see China’s new-energy vehicle industry changing after the recent capital winter?

LB: Startups undoubtedly had good opportunities in the smart electric vehicle market as traditional global carmakers came in a bit late. In my opinion, future competition lies in user experience, relationships and satisfaction. From this perspective, Chinese companies enjoy advantages because connected vehicles rely on local infrastructure, data and users’ habits. For example, Alibaba has a larger market share than Amazon. I’m confident in our development.

YG: How can Nio ensure capacity and output using original equipment manufacturers?

LB: Nio and Anhui Jianghui Automobile Group have a deep cooperation and it our partner built a brand new, world-class factory for us in line with our requirements. We manage the factory together and adopt Nio’s quality standards along the supply chain.

I believe Nio should focus on research and development and user service while collaborating with partners in manufacturing, which is our long-term strategy. We will also set up a new benchmark factory in Shanghai to prepare for the subsequent production capacity, but will continue to make cars through manufacturing partnerships.

Editor: James Boynton

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Keywords: NIO, Li Bin, Amazon, NEVs