Written by Cláudio Afonso | LinkedIn | X
William Li, founder and CEO of electric vehicle maker Nio, admitted on Wednesday that there are “many areas” where the company needs to improve in response to a long critical text shared by a customer on the brand’s official app in China.
The critical post, written by a self-described “die-hard Nio fan,” shared concerns about the company’s long-term strategies and questioned the EV maker’s ability to balance ambitious goals with practical execution.
In the text, the customer focused on six main points: Long-Term Vision vs. Short-Term Execution, Strategic Ideals vs. Reality, R&D Investment vs. Output, Self-Appreciation vs. User Perspective, Overpromising vs. Practical Communication, and Bureaucracy vs. Accountability.
Before pointing out concrete areas and examples where the company can improve, the user said he sees Nio‘s outcome as “either becoming a top-tier national car company or failing due to lack of resources,” adding that his “concern is that Nio is slowly drifting towards the latter.”
“Recently, Nio’s delivery and sales efforts have faced various setbacks, and the capital market performance has been sluggish. I imagine Nio fans are feeling somewhat down,” the user wrote in the first paragraph of the post initially shared by Marcel Münch on X.
Nio shares have lost 49% of their value year-to-date. After hitting a new four-year low of $3.61 in April, the stock more than doubled to $7.71 in late September, fuelled by news of fiscal stimulus in China. However, the stock has returned to the $4.50-$4.75 range this week.
“Long-term vision shouldn’t be a cover for operational chaos,” the user wrote, adding that “Nio seems too immersed in its own world” and calling for a more user-centered approach.
In October, Nio Group delivered a total of 20,976 electric vehicles including 4,319 units of its sub-brand Onvo and 16,657 vehicles of the Nio brand. Nio brand delivered 16,657 vehicles, up from 16,074 units recorded in October 2023 but 3,692 fewer EVs than September’s figures.
The customers said also that “long-term vision shouldn’t be a cover for operational chaos” pointing out reasons allegedly claimed by the company to justify lower than expected delivery numbers.
“We admire Nio for its long-term commitment, but this should not excuse its weak short-term execution. It has been 10 years since its founding, and monthly deliveries still hover around 20,000. I’ve lost track of the countless reasons for delayed deliveries—pandemics, capacity issues, wheel hub shortages, and now even paperwork registration in Shanghai? Long-term vision shouldn’t be a cover for operational chaos,” he wrote.
The customer claimed that “Nio’s leadership has made so many bold claims over the years—24,000 sales target for 2023 (only half met), ET5 outselling BMW 3 Series, and the promise of Q4 2023 profitability (if I’m wrong, correct me),” before noting that the stock price action has suffered the consequences.
“Continually under-delivering has eroded trust. The capital market, especially institutional investors, votes with their feet. Just look at the stock price,” he added.
Commenting on the complexity of expanding to the European region, the customer said the EV maker has “aggressively” expanded overseas asking if the expansion strategy considered the challenges there.
“While Nio is not firmly rooted domestically, it is expanding aggressively in Europe with its “Nio House” and battery-swapping stations. Has the management considered the high labor costs, bureaucratic procedures, and geopolitical challenges for car companies entering Europe?,” he asked.
A few hours later, after the post became viral in the Nio App, William Li answered, admitting that the company is “far from perfect” while thanking the customer for the feedback.
“Thank you for the heartfelt feedback. Nio is indeed far from perfect, and there are many areas we need to improve. We will keep working hard!,” the company’s founder and CEO commented.
Nio will release its third-quarter earnings next week, on November 20, with a conference call scheduled for 7:00 a.m. Eastern Time.
As reported earlier today, Fidelity’s subsidiary Geode Capital Management has nearly exited its position in Nio, four and a half years after first investing in the company.
According to its latest quarterly filing, the asset manager reduced its stake in the Shanghai-headquartered company by 94.07% in the third quarter of this year.
Written by Cláudio Afonso | LinkedIn | X
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