Three things came to mind for me: the fervor for the ET5, the AR+VR play and the unofficial announcement of U.S. market entry.
NIO Day 2021 is in the books.
The much-anticipated ET5 mid-size smart electric sedan, NIO’s fifth model after the ES8, ES6, EC6 and ET7, was finally revealed and became the latest sensation in China’s smart EV space.
So much so that the ordering page for the ET5 on the NIO app nearly crashed as soon as pre-order opened. Half of my WeChat contacts were posting moments showing off their orders, it seemed. Special musical guest Alan Walker did not get much love for his virtual performance because everyone was busy submitting orders on their phones, someone joked.
“The number of orders that we have received for the ET5 immediately after launch has far exceeded that of any of our other existing models,” said William Li, founder, chairman & CEO of NIO in an interview a day after the event, without disclosing actual numbers.
With a theme of “Hello World,” the fifth installment of the Chinese smart EV startup’s annual celebration with its users and new model launch event went a bit quicker than those in the years past partially due to stricter COVID-19 safety requirements (attendance capacity at the Suzhou Olympics Sports Center was cut in half) so no interactions on or off the stage, but also due to the fact that we have become so familiar with the event flow and the ET5 looking much like and sharing much of the same specs as the ET7.
It started out with a piano and cello duet performed by NIO owners, followed by a series of mini movies based on true stories of NIO owners (including an American named Eric), recap of NIO’s latest achievements and reveal of the ET5 by Li, virtual performance by Walker and finally a live on-stage performance by the NIO Band.
Li began his speech by talking about the event itself. It had 106 parallel venues where users and fans gathered to watch the livestream of the event with support from 450 user volunteers, and 490 users participated in the creation of the event. Over the past year, more than 12,000 users participated in 260 charitable events organized by NIO.
Then it was onto recap of achievements over the past year, plans for 2022 and product/service updates:
Retail footprint: 11 new NIO Houses opened in 2021 including the first overseas NIO House in Oslo, Norway, a key milestone achieved during the year.
International expansion: 25 countries and regions by 2025 including Germany, the Netherlands, Sweden and Denmark in 2022. The ET7 will be launched in Germany in September 2022 when the ET5 starts deliveries. And based on the maps shown at the event of the key regions of expansion by 2025, we can add the Americas (the U.S. in particular), Australia/New Zealand, greater Asia including Japan and Southeast Asia in addition to Europe. This is the clearest indication yet of a pending U.S. market entry among Chinese smart EV startups short of an official announcement. I think we can start the countdown. In fact Li shared in the interview that NIO has been considering U.S. market entry for four years and that would be the “biggest challenge” of its international expansion by 2025.
NIO User Trust: 13 charitable events were carried out, User Fund officially established, 14 industry communities formed where 3,100 users have shared resources and helped each other. In 2022, NIO will invest 80 million NIO Points for this user-partner platform co-created by users. So far, a total of 232 users have become user-partners.
CleanParks: RMB100 million to be invested over the next three years on this ecosystem co-building plan to support nature reserve protection around the globe and establish a clean and low-carbon energy cycle system, protecting the authenticity and integrity of ecosystems.
Vehicle fleet mileage driven: more than 3.6 billion km driven by NIO users to date.
Charging footprint: home chargers installed for more than 94,000 users (out of more than 156,000 users); 7-kW and 11-kW DC chargers to be added in 2022 along with existing 7-kW and 20-kW chargers; 3,348 destination chargers; 3,136 super chargers (77.1% of the electricity charged went to non-NIO brands); 440,000 third-party chargers covering 333 prefecture-level districts; expressway power network in Inner Mongolia covering 1,170 km with 72 super chargers completed; 6,000+ super chargers and 10,000+ destination chargers deployed across China by the end of 2022, connecting over 30 destination charging routes including the ones for the Silk Road and the tropical rainforest of Xishuangbanna.
Power swap footprint: 733 stations deployed, and more than 5.5 million power swaps completed to date, averaging 20,000 per day or one every 4.2 seconds; power swap network covering five vertical and three horizontal expressways and four major metropolitan areas has deployed 169 stations and will soon hit its target of 195; more than 1,300 stations deployed in China by the end of 2022 (roughly 550 added to the approximately 750 total in 2021).
Flexible battery upgrade plan: nearly 10,000 users have enjoyed battery upgrade; flexible upgrade became available in December.
ET7: order confirmation to begin on January 20, 2022 with deliveries starting March 28, 2022; 20 new features and specs have been added or enhanced during mass production preparation, including improving 0–100 km/h acceleration to within 3.8 seconds and drag coefficient to 0.208. RMB5,000 deposit will be applied as a RMB10,000 credit toward total purchase price, existing NIO users ordering ET7 will receive RMB7,000 credit and 30,000 NIO points, while owners of ES8 Founders’ Edition ordering ET7 will receive RMB10,000 credit and 50,000 NIO points.
The highlight of the night was obviously the ET5, dubbed by many as the best Tesla Model 3 competitor yet.
When it came out onto the stage, my initial reaction was that this is the little brother to the ET7 (like the 3 Series is to the 5 Series or C-Class is to the E-Class), and that’s how Li and President Qin Lihong described it in media interviews.
Except the smaller size with exterior dimensions of 4,790x1960x1499 mm (LxWxH) and a wheelbase of 2,888 mm that’s longer than a Model 3, the ET5 is much the same as the ET7 embodying NIO’s super DNA and “Design for AD” concept, resulting in a fluid silhouette that seamlessly integrates high-performance autonomous driving sensors including the “watchtower” LiDAR from Innovusion into its pure yet progressive body lines. The more compact size makes it sportier and a true four-door coupe, very Model 3esque and Porsche Taycanesque especially with the fastback and wide rear stance.
Like its big brother, the ET5 has the same CLTC range classifications: 550 km with a 75-kWh standard range battery, over 700 km with the 100-kWh long range battery, and over 1,000 km with the 150-kWh hybrid solid-state ultralong range battery (which according to Li will be available in Q4 2022 as planned but likely only be offered as a lease via BaaS for flexible battery upgrade). These are obviously helped with a new-generation high-efficiency electric powertrain with 150-kW front and 210-kW rear motors empowered by the SiC power module and a drag coefficient as low as 0.24.
Other key performance specs include 0 to 100 km/h acceleration time of 4.3 seconds, braking distance from 100 km/h to a complete stop of 33.9 meters thanks to NIO’s in-house developed high-performance 4-piston fixed calipers with aluminum casting, ultrahigh-strength steel-aluminum hybrid body with torsional stiffness up to 34,000 N·m/deg and a rollover-resistance rating of 1.7 above NHTSA’s 5-star criteria thanks to its ultra-low gravity center at 482.6 mm and ultra-wide wheel track of 1,685 mm.
As with the ET7, the ET5 comes with the same NIO Autonomous Driving (NAD) featuring Aquila Super Sensing and Adam Super Computing that allow advanced driver assistance in scenarios such as highways, urban areas, parking and battery swapping. Initially the ET5 will come standard with 19 ADAS features. NAD’s full features will be gradually rolled out after development validation and be available to users via a RMB 680 monthly subscription under ADaaS (AD as a Service).
The biggest surprise for the ET5 is the PanoCinema panoramic and immersive digital cockpit featuring AR and VR technologies. To achieve this, NIO has partnered with AR device company NREAL to jointly develop AR glasses dedicated to NIO users that can project an effective screen size of 201-inch at 6 meters. NIO also worked with Nolo to jointly develop the NIO VR Glasses with ultra-thin Pancake lenses realizing binocular 4K display effect. The 10.2-inch HDR instrument cluster further boosts the vividness of images. Enabled by the cutting-edge hardware, continuous software development and content creation, elevated by the all-new 256-color curtain ambient lighting and Dolby Atmos 7.1.4 surround sound system, PanoCinema “creates an exclusive space where users can indulge all their senses.”
Hence the “Ignite the Senses” tagline for the ET5, in comparison to the “Ready for Tomorrow” tagline for its bigger sibling.
The ET5 comes with nine exterior color options including First Light Kiss and Sunbathe Yellow that will be exclusive to the model, as well NIO Color of 2022: Airspace Blue. Pricing starts at RMB328,000 before subsidies but drops to only RMB 258,000 with BaaS (Battery-as-a-Service), where users will pay a monthly battery leasing fee of RMB980 for the 75-kWh version and RMB1,480 for the 100-kWh version. ET5 users are entitled to 10-year unlimited warranty, lifetime free Power Swap, free Power Home, free roadside rescue, and free connectivity.
Delivery is expected to start in September 2022, so in just a little over nine months, as opposed to 15 months for the ET7.
So there you have it, recapping the most of what happened at NIO Day 2021 and key highlights of the ET5.
A few things stood out for me.
First, the fervor for the ET5 that ensued following its reveal and start of pre-order resulting in the NIO app nearly crashing due to a sudden increase in orders being placed, I don’t think I’ve seen anything like it before. Not for NIO and any of its other models, and not for any other brand or model in recent memory except maybe the Model 3 back in 2016. The ET5 certainly won’t get anywhere close to the level of order volumes the Model 3 got in its early days but remember that despite the ET5 being the entry model in the NIO family, it is still priced well above RMB300,000. The BaaS option bringing the upfront purchase price to as low as RMB258,000 is obviously very attractive, and that’s before any subsidies. Overall, the ET5 has hit a sweet spot in terms of its positioning, size and features, especially new exterior and interior color options as well as the immersive digital smart cockpit featuring AR+VR technologies that differentiates it from rest of the competition.
Second, the AR+VR play is a pleasant surprise, a smart move and a huge selling point, putting NIO in the middle of the metaverse narrative that’s been gaining attention ever since Facebook changed its name to Meta. It’s yet another tactic from NIO to provide its users with the holistic experience that it often preaches, and a reason why it decided to equip the model with the Dolby Atmos sound system.
Third, pending U.S. market entry. By lighting up the map of the U.S. as part of the 25 countries and regions it plans to expand to by 2025, NIO has unofficially declared its intention to crack the toughest market of all, something no Chinese brand has successfully done except BYD (though it’s only been focused on buses and trucks). I bet NIO is already actively exploring different options and potential partners to work with while navigating the complicated geopolitical environment to help its U.S. entry. From the very beginning, NIO has always aspired to be a global brand. And it certainly understands that to become truly global, you have to be in the development markets of Europe and the U.S. So it will be really interesting to see how NIO finds a way to tackle challenges especially with the recent fallout of the DiDi delisting and scrutiny over Chinese tech companies, and eventually launch its products and services State side.
The ET5 is the best designed NIO to date, and possibly the best designed smart EV in China if not globally. It should do very well and I’m thinking monthly deliveries should easily surpass 5,000 vehicles. Is it going to cannibalize the ET7? I think it will, but it’s also going to take huge chunks of the market away from entry level premium models like the 3 Series, C-Class and A4L. Most of the orders, according to Qin, are coming from customers new to the brand.
For many of those that have put down orders for the ET5, I have a feeling they could care less about the hard specs but are rather drawn to it simply by its stunning exterior and interior design, immersive cockpit with AR+VR, and most importantly the understanding and peace of mind that it can depend on NIO’s already established power swap network, flexible battery upgrade model and holistic service experience that is not available at other brands. That is the value these customers are paying, not the vehicle itself.
Now comes the hard part of ramping up production and delivering on the promises. As Elon Musk would say: “prototypes are easy, production is hard.”
