NIO’s second sedan ET5 officially started delivery in cities including Shanghai and Suzhou. Aiming at the pure electric, mid-sized luxury vehicle market, the ET5 will compete against products such as the Tesla Model 3 and BMW 3 Series.
At the Chengdu Auto Show in August last year, NIO Co-founder and President Qin Lihong said, “The BMW 3 Series normally sells around 12,000 to 15,000 units in a month, and NIO ET5 aims to surpass it within a year.” Such rhetoric is not uncommon in the new energy vehicle industry. When Li Xiang, Founder of Li Auto, first promoted the L9, he called it “the best family flagship SUV for less than 5 million yuan ($702,414).”
Before subsidies, the ET5 sells for 328,000 yuan to 386,000 yuan, and is complemented with a battery rental scheme. The ET5 adapts NIO‘s most extensive interior and exterior color options ever, with nine body colors and six interior color schemes. Equipped with the Aquila supersensing system, Adam supercomputer, and the latest generation of autonomous driving systems, the model provides a safe point-to-point autonomous driving experience.
In terms of performance, the NIO ET5 uses a dual-motor four-wheel drive system with a maximum power of 360 kW, a peak torque of 700 N・m, a 0-100km acceleration of 4.3 seconds, and a maximum endurance of more than 1,000 km. The length, width and height of the car are 4790, 1960 and 1499 mm respectively, with a wheelbase of 2888 mm.
On September 7, NIO Founder, Chairman and CEO William Li said on the earning call after the release of the second quarter financial report that he is very confident of meeting the full-year delivery target, and that the ET5 will have delivered more than 10,000 units by December. To date, NIO has delivered a total of 71,500 vehicles from January to August this year. Further, the company expects to have delivered another 31,000-33,000 units in the third quarter of 2022.
After ensuring delivery, capacity is also a key factor that companies cannot ignore. On August 24, NIO announced that the first batch of ET5’s rolled off the line at the company’s Xinqiao Factory. On September 7, Li said that NIO‘s supply chain and capacity limitations will ease in October, and that the Xinqiao plant will start production in the fourth quarter. Moreover, the plant will only manufacture the ET5 in the early stages.
To promote the ET7 and ET5, NIO‘s spending on R&D and marketing has skyrocketed. In the second quarter, NIO‘s sales and management expenses reached 2.28 billion yuan, R&D expenses were 2.15 billion yuan, and operating expenses reached 4.19 billion yuan.
There are other factors driving up the company’s spending. Higher R&D costs are due to the design and development of new products and technologies. For example, the NT3.0 project that is to be launched next year, and the establishment of a battery R&D team of more than 400 people, have both contributed to higher expenditures. NIO is currently working on an 800V battery pack that supports swapping and ultra-fast charging, and should be ready for launch in 2024.