Why NIO’s Founder Has Fallen Off the Radar
When the founders of XPeng and Li Auto, two famed Chinese electric vehicle (EV) startups within a trio that also includes NIO, were busy interacting with each other on social media during a marketing relay for their newest EV lineups in late June, NIO Founder and Chairman William Li kept a low profile.
Unlike XPeng Chairman He Xiaopeng and Li Auto Chairman Li Xiang – both are buoyant influencers on social media – NIO‘s Li has rarely been active on social media throughout recent years, despite the trio’s rise to global prominence in the EV sphere.
NIO and XPeng recorded cumulative sales of more than 200,000 units successively, while Li Auto is on course to post sales of 180,000 units. Furthermore, all three startups currently hold upwards of 40 billion yuan ($5.97 billion) in cash reserves apiece, according to their fiscal disclosures for the first quarter.
Despite being a social media recluse, NIO‘s Li had stayed active among the EV brand’s user community, made appearances at new product launch events, and perhaps most notably, continued attendance at an annual major domestic auto forum.
For five years in a row until 2021, Li attended the China Auto Blue-Book Forum (CABF) where the poster child for Chinese EV making new forces blazed the country’s automobile trail with some much-quoted wise sayings.
The NIO founder, nonetheless, will be absent from this year’s CABF, which is scheduled for July 7-9 in Wuhan, Central China’s Hubei Province.
Over the years, the founder of China’s answer to Tesla has had a bumpy and rough ride.
Back in May 2017, Xu Heyi, then chairman of BAIC Group said during the upgrade-themed annual CABF that he was unconvinced by – and yet envious of – the upstart EV brand NIO and its founder William Li.
At that moment, NIO‘s first mass-produced model – the ES8 – was yet to hit the market. But Li had already decided on basing the firm’s future on a user-centric mentality.
In 2018, when the first batch of automaking new forces began delivering their products, with some of them on display at the Beijing Auto Show, Geely Founder Li Shufu, a traditional auto magnet, suddenly lambasted the new forces, accusing internet-based electric vehicles of bamboozling average folks.
NIO‘s Li implicitly hit back at the Geely founder’s remarks, saying that Li Shufu described a car as the combination of four wheels with two rows of sofa when founding Geely 20 years ago. That said, the NIO founder asked: Why did the Geely founder consider new carmakers unreliable?
The Tesla of China arguably walked a tightrope in 2019 amid the emergence of an industrywide downtrend. At the 2019 CABF, William Li reflected on courage – the forum’s theme – dissecting courage as a wakeup call for across-the-board innovation, overhaul and breakthrough.
A continuation of market downturn, compounded by stringent investments and the once-in-a-century COVID-19 pandemic in 2020 apparently dealt a hefty blow to startups. Luckily, NIO inked a cooperation framework agreement with the government of Hefei in East China’s Anhui Province in late February 2020. NIO has since selected Hefei as the host of its Chinese headquarters.
At the 2020 CABF, William Li opined that renovation and innovation are eternal for a company. He estimated that the global mainstream market for upscale cars will be downsized to house only five carmakers over the next 10 years.
Motivated by such a keen sense of crisis, NIO was reborn, with its products sitting atop the EV new force sales rankings in the first half of 2021.
At last year’s CABF – the theme of the annual forum was securing a head start – the NIO founder emphasized the need for training long-term thinking capacity, both for himself and the company.
Many of the company’s mistakes and much of the “tuition” it has paid were attributed to indiscreet and inadequately deep thinking, he remarked.
It seems, however, that NIO is still paying the price.
Throughout June, when William Li was almost invisible, NIO had found itself in a mess of multiple perplexities. In a report on June 28, short seller Grizzly Research claimed NIO played accounting games to inflate its revenue, which has underpinned its stock rally since 2020.
The short seller attack came only days after a fatal accident in which a NIO test car fell from the third floor of the company’s Shanghai office, killing two test drivers.
Earlier in June, NIO was purportedly being sued in Germany by Audi, under allegations that two of NIO‘s models – the ES6 and the ES8 – infringe the trademark rights of Audi’s S6 and S8.
SEE ALSO: Audi Sues NIO for Infringement of Car Names
More worryingly, NIO only took the fourth spot on the Chinese EV making new force rankings in June in terms of vehicle deliveries. NIO delivered 12,961 cars during June. For the first six months, its delivery numbers totaled 50,827.
By comparison, Xpeng delivered 15,295 cars in June, and 68,983 cars for the first half, claiming the top position. Li Auto ranked third, trailing EV brand Neta from Hozon Auto.
NIO Chief Financial Officer Feng Wei rebuked the Grizzly Research attack as groundless, with lots of erroneous information about NIO and a misleading conclusion.
The reported lawsuit at a time when NIO is readying itself for a foray into the European market at the year’s end also raises doubts about the actual intent behind the litigation.
Boasting an average selling price higher than that of Audi and BWM, a decline in sales volume in the case of NIO seems to be well offset by its premium positioning.
All these attest to the ups and downs the eight-year-old NIO has been through.
William Li’s most recent media appearance was in mid-June. The NIO ES7 went on sale on June 15 and Li described the ES7 as the quickest-delivered model in the company’s history. It introduced three new models this year, breaking a past tradition of unveiling one model per year.
NIO will be heading for Europe and the US, Li said after the ES7 launch event.
China is the most competitive market on the planet, he said, noting that its survival in China makes a compelling case for its survival in Europe and the US.
NIO has plans to land its products and services in Germany, the Netherlands, Sweden and Denmark by the end of this year, before reaching out to more than 25 countries and regions by 2025.
The Chinese EV maker, according to William Li, will become a global brand name with overseas markets generating half of its entire sales in the future.
Meanwhile, there are media reports spilling the beans that Li has left for the US, as the NIO founder continues his bumpy yet courageous EV ride.