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The NIO philosophy is conveyed in its logo: The top represents the sky, openness, vision, and the future. The bottom represents the earth, direction, action, and forward momentum.

Cars

NIO Enters the Global Stage — Not Your Average Carmaker

This article is a co-production of Maarten Vinkhuyzen and Chanan Bos

 

NIO is the new kid on the block. And it is different from all the other new kids that are trying to fit in. There is room for everyone, but NIO needs some extra introduction. It is not just another thirteen-a-dozen Chinese electric carmaker. NIO’s first foreign market is Norway. This year NIO will open NIO houses in the Netherlands (Rotterdam), Germany, Sweden, and the UK. By 2025, NIO aims to be present in 25 markets, the USA likely among them.

NIO is aiming at the market segment that is served by the Porsche brand and the top of the Audi brand. Neither is competing with the Tesla Model 3 & Y. NIO will launch a sub-brand to compete with Tesla. That will serve the volume segments where VW and lower Audi/BMW models are dominating. This is unique, a startup that is going to compete with the likes of Lexus and the top German luxury brands.

NIO EP9 supercar.

The first thing NIO did was build a $3 million supercar (NIO EP9) to collect some world records on the hardest circuits. There is one in the showroom of the NIO House in Oslo. Next came the development of an SUV (the NIO ES8). In comparison with the big electric SUVs of Audi and Porsche, it is a matter of taste (and money) what to choose. NIO’s pricing is very competitive. The other models NIO is launching are for the same high luxury, high quality, and high price segments. By going for the top of the market, NIO is attacking the stigma all new foreign entrants to European and North American markets carry with them automatically.

This is not even the biggest way in which NIO sets itself apart from other electric carmakers, startups, and the old guard alike.

The NIO philosophy is conveyed in its logo: The top represents the sky, openness, vision, and the future. The bottom represents the earth, direction, action, and forward momentum.

NIO is different because it looks at the world differently. Tesla is different in the way it is vertically integrated. NIO is different because it is holistic. Other OEMs leave customer relations to the dealers and energy distribution to the gas and grid companies. NIO looks at these as the NIO community and serving it with Battery as a Service (BaaS).

The BaaS activities of NIO are threefold. First, there is the chain of fast charging stations, just like Tesla has. Secondly, NIO has a fleet of mobile convenience and roadside assistance charging units. They are just vans with a big battery in the trunk that can help you when you are out of juice in the middle of nowhere or don’t have the time to go to a charger.

Third is the biggest service NIO has developed. They resurrected battery swapping as a viable technology to augment charging when traveling. NIO realized that the only way to do it right was in a fully automated swapping station. The swap is done in under 5 minutes, including entering and leaving the station.

But for real success, the way NIO builds a community of users and supporters is perhaps even more important.

Unlike other brands, NIO has not yet built up client relations with auto dealers, and does not have massive fan clubs like those started spontaneously around Tesla (and also helped by some good customer support managers and made into a stronghold by the PR and twitter genius of Elon Musk). NIO does not have the “first out of the gate” advantage Tesla had, and while their CEO is also a star performer, that is only within NIO’s in-app social media. NIO has a plan and systematically executes it. The NIO Houses are not dealerships — they are community houses, with community activities.

Even for people who do not drive a car, it is attractive to become a member of the NIO community. It has many benefits besides meeting other NIO drivers. The core is the NIO social media app, where NIO community members can interact.

The NIO House is situated at the ground floor and in the basement.

And NIO is a car brand with a number of models and perks for the owners. There is the lifetime warranty, lifetime route service, lifetime connectivity. Though, we are not clear whether this is for the lifetime of the car or the time it is owned by the original owner. But still, it looks more like a philanthropic institution than a commercial company. It looks like NIO has found a non-standard way to become very big and very profitable.

Whether this business model works with regular customers when early adopters become a minority, time will tell.

Battery as a Service

While “Power as a Service” would have been a better acronym than “Battery as a Service,” PaaS was already in widespread use, referring to Platform as a Service. That is why the world will know it as BaaS.

NIO has now deployed BaaS in China with some incredibly large numbers. That is until you realize how tremendously big China is. China is about 4 times the USA and 80 times the Netherlands. I will use these two countries as a reference.

BaaS is made possible by vehicle-battery product separation. The vehicle is sold by one company, the battery is rented from and charged by another company. Batteries have a standardized external size and interface. They can have different capacities. Recently, a 150kWh version was added to the catalog. It can be installed in all existing car models. Your three-year-old SUV can now have a 150kWh battery. You can use a cheaper small battery for daily use and rent a super large battery for the holidays.

Battery swap station showing the batteries in stock.

Swapping. The fully automated swapping station replaces your battery in fewer than 5 minutes. The number of those stations is nearing a 1,000 in China and growing fast. The capacity of a swapping station is comparable to a charging station with 4–6 high-power charger (HPC) stalls. Both can provide energy to about 12 vehicles per hour.

In times of low demand, the swapping stations can make their storage capacity available for grid stability services, creating an extra source of revenue for NIO and an incentive to lawmakers that are managing the transition to renewable energy.

Other carmakers are asked to participate in this system and the Chinese government is being lobbied to help normalize this standard and speed up adoption. It is too early to make any prediction about the potential success of this concept, but it is a very unique solution for people living in apartment complexes who can’t charge their cars at home.

Charging. For charging, there are over 800 charging stations and growing in China. Before you fall off your seat in awe, that is just over 200 chargers when compared to the size of the USA and only 10 for a country the size of the Netherlands. Tesla has over 1500 Supercharger stations in the USA, and Fastned has about 150 Dutch stations. Even then, the Tesla USA and Dutch Fastned networks are not nearly big enough to meet upcoming demand as the transition to electric cars continues accelerating.

Rescuing. When in the middle of nowhere with a flat battery, just contact the NIO Power service using the app, and a mobile charging unit comes to the rescue. Too good to be true? Wrong!

NIO Power mobile charging station

The mobile charging service is made profitable by its daily work as a charging valet service. When you don’t feel like charging on your way home, or the charger is out of your way, call the NIO Power valet service. While you keep doing what you are doing, the mobile charger will visit your car and charge it. No gas station can do it in less time — and without going out of your way or being attacked by the smells of gasoline.

Community

NIO App. The app is the glue of the NIO community. Besides the same functions one expects from every carmaker’s app, connecting to your car and managing services, there is a large part that is a social media platform. The NIO app connects you with other NIO app users and offers an on-line store for its merchandise. It also has the on-line dealer functions incorporated for a car-buying experience like offered by Tesla.

NIO app screens.

NIO House. The NIO house is not a dealership. It is a community center. You will find a library, coffee bar, children’s play corner, meeting rooms, working locations, and often a ping-pong table. In one corner, the NIO cars will be on display. While there are car people for your car oriented needs, you probably better not ask the barista to schedule a service appointment for your car.

One of the community spaces in the Oslo NIO House.

NIO Life. The NIO lifestyle is about living the good life and doing it in a nice and responsible way, and part of that is their merchandise store that isn’t limited to just merchandise and it’s called NIO Life. The core values are committing to clean energy; following the principles of a circular economy, fair trade, respect for and protection of human rights; using suppliers with the same values; and having fun. In short, do business in an ethical way. Oh, and do not forget to make the products beautiful and taste great. NIO collaborates with over 500 designers and product developers. The NIO app is also a mini Amazon or Alibaba.

NIO NoMi. NoMi is the name for your in-car AI digital assistant. She/He asks you to get to know her/him. “Know Me.” The functionality of NoMi, as is the case with every AI, is growing. Putting it in the NIO “Community” chapter is based on a hunch. I can see NoMi merge into the NIO app, but no one can resist this little assistant’s cuteness.

Hi, I am NoMi. What can I do for you today?

NIO rewards program. Loyalty programs have existed for ages. Most of the time, you get small rewards after years of spending money. That is, until Tesla kicked off its referral program. Suddenly, by having people use your referral link, you could even save up enough new points for a Tesla Roadster or two. That is, if you have a Tesla to begin with. NIO’s point system makes this and any other loyalty program you have seen in the past seem like a joke. First of all, you don’t need to own a NIO. The company wants you to be part of and feel welcome in their community even if you don’t have a car. Maybe you are there because you like NIO’s cars, maybe you downloaded the app because your friend took you to a yoga or painting class at the NIO house. Just downloading and setting up your profile gives you enough points to get a free coffee at the NIO cafe on the floor above the multipurpose room.

So, what can you do to earn points in NIO’s system? All kinds of things — from minor stuff like opening the app once a day, inviting friends to try the app, setting up your profile, using the embedded social media functionality, charging, driving, buying a NIO, referring someone to test drive or buy a NIO, and much more.

The same goes to spending points. You can spend it at the NIO Cafe, you can spend it on merchandise, you can spend it on all kinds of things. NIO has a diverse offering in its app, like wine and gifts, with new stuff going in and old out of the store on a regular basis. In fact, they often like to partner with local artists for limited series merchandise. There are events in town that NIO is sponsoring, like a basketball game that you can visit using your points. However, most importantly, you can spend your NIO points on stuff like fast charging, NIO Power, service pickup, designated drivers, as well as other 3rd party services offered in the app — they can all be paid for with NIO Points.

Just for your understanding, 1,000 points is roughly 12 euros, which means that referring one person to buy a car is 144 euros. Just by opening the app, whether it is to control your car or check social media, doing this just once every day for 2 weeks is enough for free coffee. If you think of it as a chore, that could be tiresome, but if you see it as the same thing as opening Twitter or Instagram, then suddenly once a day seems like almost nothing. Overall, the more you engage with any aspect of NIO, the more points you get.

They also sell cars!

Last but not least, NIO is a car brand. The title of this paragraph is a reference to a Heinlein story about a company that was very diversified in its services to its customers. Their service to their customers was all encompassing, and their customers came first. Their service to their customers ranged from organizing interplanetary conferences to walking dogs. “We also walk dogs” was their ad slogan and motto.

There are now 6 models that are in production or that are production ready, and sales are growing fast. This year, nearly 38,000 cars were delivered in the first 5 months. Covid and supply chain willing, over a 100,000 deliveries are likely this year. NIO can bring this many cars to market in just a few years because the actual production is outsourced to JAC. Much like Jaguar outsourced its production of the I-PACE to Magna-Steyr and Tesla once upon a time intended to outsource its production.

JAC and NIO factory entrance.

A decade after Tesla discovered that there were no companies that knew how to build an electric car, there are a number of companies capable to provide this service to NIO in China. NIO makes the designs and the software and is also responsible for procurement and the supply chain. China’s JAC puts it all together. After production, NIO follows up with sales and distribution. In essence, NIO has outsourced the “Production Hell” that delayed the arrival of new models from Tesla, VW, and Mercedes on the market. However, what is interesting to note is that while the vision comes from NIO China, the design comes from their German team, NIO’s hardware from their UK team, and the programming comes from their team in Silicon Valley.

NIO builds luxury cars. However, luxury is a deceptive description. For some, the minimalist Tesla interior is the height of luxury. Others like their car cockpit to resemble the cockpit of a jumbo jet. For NIO, it is a plethora of functions, managed either through the NoMi digital assistant, the touchscreen, or by well-placed controls that are easily or even blindly reachable. The internal materials are soft, beautiful, and environmentally friendly. Indirect lighting, a superior sound system, multi zone air-conditioning, and enough cupholders make it a truly luxurious interior.

EP9 Supercar. Directly after launching the brand, NIO entered the top of the market with the Electric Performance 9 (EP9). The EP9’s task was to get the attention of car lovers. Only a handful are produced and they are not road legal. Their use is limited to joyriding on the race circuits around the world.

Nio EP9 at the Nurburgrung

NIO EP9 supercar in its natural environment.

The car is made of carbon-fiber both externally and internally. Its four motors deliver 250kW each. The performance is awesome enough to get the Nurburg Ring Nordschleife record for electric cars.

ES8, ES7, and ES6 SUVs. The first real cars NIO designed (not produced — that is done by JAC) were the ES8 and ES6 SUVs. The ES8 is a three-row big tank on the road. The ES6 is its two-row “little” brother. The latter is in the same class as the BMW iX3 and the Tesla Model Y. They have the typical boxlike design of the first Range Rover super utility vehicle. And while writing this article, another NIO SUV has entered the market. It is the ES7, which is positioned between the ES8 and ES6.

Do you see the leg rest? That is my kind of luxury.

I did drive the ES8 in Oslo, and it was an absolute pleasure. The heads-up display let me keep my eyes on the road while giving me essential information. When I sat as a passenger in the middle row, my bloated body did have enough room, and the doors were wide enough to get in and out. I am old, too wide around my middle, with joints that don’t like to bend any more, and I’m a male. Many modern cars are not for me, because I can’t get in or out and the seats are too narrow, all of which is not a problem with the NIO ES8. Hopefully that puts my comments into perspective.

All three of these cars deserve a full-length review. And honestly, I am a lousy car reviewer. Luckily, I have a colleague who is in Nirvana when offered such a beast for a few days to review. So, make sure to check out his article and video review of the ES8, coming soon to a site near you.

EC6 SUV Coupe. The two boxy SUVs were joined by a SUV coupe called EC6 in 2020. This is the real Model Y competitor. The NIO is a bit longer, wider, and higher. Even the sunroof is the biggest in its class. Performance is also in the same class, something most Tesla competitors can’t say.

The SUV “coupe” line. Part of the back is cut off.

What is very different, however, is the interior design. The NIO follows the company’s ideas about luxury. For example, there is an intelligent air fragrance system. I hope it has an “Off” function. (It does.)

ET7 and ET5 Touring Vehicles. The latest additions to the lineup are the ET7 and ET5 sedan models. These are not city cars, but rather long-distance tour cars made for the long road trips many dream about … but few actually make. Battery capacity, just as with all NIO models, is up to 150 kWh, available when you need it through BaaS and the battery swap system.

Room enough on the rear seats, made for traveling.

The ET7 started deliveries this spring and is the current best seller. The competition is the Mercedes E-Class and BMW 5 Series. Both are trying to find a place in the electric vehicle market, a market segment where electric is clearly superior but where the conservative buying public needs some more time to realize this.

The ET7 has a Mobileye-powered autonomous driving suite using 33 sensors. How autonomous this system really is today is not clear from the documentation. It is likely a very advanced “level 2” or “level 3” ADAS system.

The ET7 will probably get to Europe next year. NIO will then be present in at least five European markets. My colleague can’t wait to test one.

The view from the rear seats.

The ET5 is expected in China later this year. It is the NIO competitor to the Model 3. Wait for reviews when it gets to European and American markets.

Full Disclosure

NIO provided airline tickets and a night in the best hotel in Oslo. It also included lunch in a fish restaurant with a Michelin mention. The NIO hospitality in Oslo was perfect. It was my first visit to the city. I now know it has an airport, a train station, a hotel, a NIO house, and some highways. I would have preferred to travel to Oslo in my own car and stay at a B&B like I normally do — getting to know the city at least a little bit. But the communication with NIO before the event was so difficult that I ended up in a nightmarish flight from Frankfurt to Oslo and a worse journey home. This type of sponsored visit was a one-time thing, but never again.

I did visit Oslo again for EVS35, this time by driving my Renault ZOE from Holland to Oslo. NIO House was now full of tourists and car shoppers. Oslo is a fascinating city and I didn’t have enough time to really explore it — EVS35 was 16 kilometers from the Oslo center. I have to go back to visit it a third time. The city looks worth the effort.

All pictures courtesy of NIO.

 
 
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Written By

Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. At the end of 2019 I succeeded, I replaced my Twingo diesel for a Zoe fully electric. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car. I added some Fastned, because driving without charging is no fun.

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