The business model of NIO.
When you think of electric vehicles (EVs), what is the first brand that comes to mind? Probably Tesla. But besides Elon Musk’s brainchild, others have been making a name for themselves in recent years. One of them is NIO, an automotive company that designs, develops, and produces the next generation of premium EVs. From its unique battery as a service (BaaS) approach, to the world’s first in-vehicle artificial intelligence (AI) assistant, ‘NOMI’, they are creating a user experience that is hard to match. Buckle up, as we get ready to zoom into the story of NIO and how they supercharged their business model.
EV Fever in China.
The mobility industry is evolving, and the buzz is all about electric vehicles (EVs). With eco-consciousness on the rise, one place that is truly electrifying the automotive landscape is China. In 2022, “China’s clean car sales hit 5.67 million, capturing 59% of EVs sold globally”. And this is only expected to grow, with the EV penetration rate to reach 90% by 2030, according to HSBC. NIO is among the top players in this market, with other Chinese brands, such as BYD, Xiaopeng Motors, and Li Auto, all fighting to take the first-place spot in the race towards a greener future.
Flashback to the future.
Circling back to 2014, in the vibrant streets of Shanghai, the wheels of a new EV company were set in motion. William Li envisioned cars to be more than just transportation, but experiences on wheels. This jump-started the idea of NIO, a one-of-a-kind EV brand with a mission to shape a joyful lifestyle and design vehicles that cater to emotions, aspirations, and experiences.
Fast forward to the present, William’s vision has become a reality. NIO believes that the key to the future of the world’s EV industry lies in a combination of eco-friendliness, innovative technology, and a user centric design. This has allowed them to cross the border and expand into several European countries, such as Norway, Germany and the Netherlands, with plenty more soon to come.
“‘Blue Sky Coming’ describes our guiding philosophy in a brighter, positive future, and a more sustainable tomorrow. This is what’s driving us — every day, across the globe.”
— NIO
Ready for a pit stop with a twist?
NIO is thinking outside of the box and pursuing innovative solutions. One of the ways they are doing this is through their battery-swapping technology. When you purchase a NIO car, the battery is decoupled from the car, creating a Battery-as-a-Service (BaaS) model. Compared to regular ICE (Internal Combustion Engine) premium vehicles, this approach lowers purchasing and using costs, opening up its door for a wider range of consumers. Additionally, NIO offers options for different battery sizes and swapping subscriptions, catering to all types of driving needs.
NIO is among the pioneers of battery swapping technology for EV’s but was not the first. Other companies, like Better Place, had experimented with the technology in the past, but failed as they were simply ahead of their time. NIO had entered the market at a better time and in a better environment. Competition among EV manufacturers is increasing in China, driving down prices, and production costs are overall lower, making scaling and the expansion of their required infrastructure more feasible than many years ago.
But how does this battery-swapping system work?
Simple! Drive to a NIO Power Swap station, roll up in front of it, and let the car take care of the rest. Using its 360° camera system, it automatically navigates into the swap station and aligns with the swapping machinery. Once in place and secured, the station safely removes the depleted battery from your car and stores it in the station, recharging it for future use. Meanwhile, a fully charged battery, stored within the station is lifted and installed into your vehicle. The battery swapping service takes just 3 to 5 minutes, during which automatic checks keep your battery and car in top shape. In comparison, supercharging methods can take up to 10 times longer. Tesla’s Model 3, for example, needs 15 to 25 minutes for a 320-kilometer recharge. NIO’s Power Swap service makes them ultra-efficient and sets them apart in the EV market.
Looking for an experience supercharge instead of a battery swap?
Your dream ride, your way.
NIO offers more than just inventive battery management. They have created a premium brand experience tailored to the customer’s desires. NIO’s vehicles are extensions of your personality. Depending on what model you choose, NIO gives you a variety of customization options, such as colors, performance, and specifications. This mass customization approach aligns production with the market’s demand, minimizes waste, and creates a loyal customer base.
Say ‘Hi!’ to NOMI.
In addition to these options, NIO has created a first of its kind in-vehicle Artificial Intelligence system. Meet NOMI, a ball-shaped virtual assistant sitting on top of your dashboard, designed to take care of all your driving needs through human-like interaction. NOMI learns from your behaviour and builds an immersive experience through engaging all senses. It can activate the massage seat, spread scents around the car, have a conversation with you and a lot more. Not only does NOMI create a joyful driving experience, it keeps you safe by taking care of all non-driving related tasks as well.
Navigating the NIOverse.
NIO’s user-centric approach does not stop there. There are many more touchpoints in the brand’s journey. This includes its lifestyle brand, ‘NIO Life’, it’s showrooms, ‘NIO House’, and its physical spaces, ‘NIO Spaces’, where people can meet, connect, and experience all things NIO.
To boost their customer’s experience even further, they have introduced the ‘NIO App’ designed to offer convenience through features such as vehicle management, remote control and shopping. Next to that, the app offers a platform where the NIO community can connect, both online and through regular events like lectures, festive banquets, and children’s activities.
Continuing its commitment to excellence and innovation, NIO has launched ‘NIO Certified’, their solution to redefining the standards of second-hand car ownership. This service guarantees high quality used cars that have been thoroughly inspected and certified, providing peace of mind to their customers and making NIO a smart and reliable choice even in the secondary market.
Let’s have a look at how all this adds up on the business model canvas:
“We empower an inspiring community of users, where they can share and grow together.” — NIO
The road ahead.
At the heart of NIO’s strategy is a clear mantra: enrich every touchpoint. As they drive towards the future, their navigation guides them with a user-centric and sustainable approach. They are igniting passion, sparking change, and inviting you to be part of something bigger. So let’s keep the wheels turning, the batteries charged, and the dreams of a cleaner world alive. Are you up for the ride?
Here are 3 things from NIO’s manual that you can start applying today!
1. The Triple-P Mindset: When dreaming up new things, remember to keep people, the planet, and profit in your sights. It is your magic formula for long-term success.
2. Out-of-the-box Mojo: Break free from the mould, take risks, and see where your innovative spirit takes you.
3. Customer is king: Imitate NIO’s user-centric approach by designing unique experiences around your products and/or services. A loyal community can be your brand’s biggest asset.
Curious to see how your experience matches up?
Originally published at https://www.businessmodelsinc.com.
