After gaining its place in the high-end market, NIO launched Ledao under the name of disrupting ModelY to break into the mass market.

On September 19, the countdown to the launch of Ledao's first new car, the L60, has entered the countdown. On the eve of the press conference, Ai Tiecheng, president of the Ledao brand, had an in-depth conversation with Wall Street News. In this conversation, he explained in detail the causes and consequences of building the Ledao L60, as well as NIO's ambitions.

Ai Tiecheng said that the L60 is the “ultimate product” that the team spent more than 3 years polishing. Before it appeared, it was determined to disrupt ModeLy, the king of SUVs currently selling 450,000 units a month.

“In the past, there was no product as capable as Ledao L60 on the market,” Ai Tiecheng pointed out. Currently, Modely is the only company in the mid-size SUV market, but it is difficult to sustain a good product even if it hasn't been updated for too long.

Behind this “arrogance” is Le Dao standing at a high starting point. Qin Lihong, president of NIO, once used “born and mature” to describe this sub-brand that has long been part of the NIO system - a mature technology, energy supplement system, and a handsome player who has led the team to the mainstream market.

Ai Tiecheng said bluntly that he has worked for foreign companies for many years and was shocked by the maturity of the domestic automobile industry and technology industry, and famous overseas designers and engineers are fond of it. Over the past few years, the “long-term doctrine” that NIO has spent a lot of money on is born from an environment with such “rich” resources. This made Ai Tiecheng even more convinced that “the next generation of the world's first model should be a Chinese brand.”

Furthermore, what is more important is how to use an unusually balanced style of play to break through and get a share of the pie in this large-scale, imaginative, yet highly homogenized market. The key player in Ledao is Ai Tiecheng, who Li Bin dug up from Disney five years ago.

Ai Tiecheng revealed that as early as 2014, when the car was built, Li Bin began thinking about using a new brand to enter the mainstream household market. After getting out of ICU and surviving 2019, NIO put a second brand on the agenda in 2020, and the “Alps” project, the predecessor of Ledao, was officially launched.

In Ai Tiecheng's eyes, what Li Bin sees is the user mentality he has developed over many years at Procter & Gamble, WeWork, Disney, etc. “If I ask what Tiecheng is good at, I think it's user insight, which is the foundation of my entire career.”

After taking the lead, Ai Tiecheng traveled to Tier 1 to 5 cities in China with his team. The conclusion was that 85% of China's passenger car market is home users. He painted a basic portrait of the nearly ten million car owners - everyone is at a stage where their lives are improving.

As a result, Ai Tiecheng wrote enough articles about the family scene in terms of safety, space, and energy consumption. If electricity rental BaaS services are combined, the L60 threshold can be directly lowered to the 0.15 million yuan range. This is also the final barrier to joint venture oil trucks.

Everything is ready, and music has become the key to the scale of NIO's sprint.

However, L60 trackers are also succeeding. Models such as the Feifan R7, Zhiji LS6, Ideal L6, and Star Era ET are the first to join the scuffle. The Extreme Krypton 7X, Avita 07, and Enjoy R7 will also soon be launched.

Predictably, the 0.2 million SUV market will face a vicious battle next, and Ledao's situation will not be easy. Crucially, the estimated overall sales volume for the second half of the year of the L60's debut is only 0.02 million units, which seems out of step with the ambition of Le Dao.

As far as Ai Tie is concerned, the first battle of the Ledao brand cannot be lost. How will he take the helm to tell the disruptive story of this SUV track?

The following is a transcript of a conversation between Wall Street News and Ai Tiecheng, senior vice president of NIO and president of Ledao Motors (edited):

Q: What are NIO's motivations and thoughts for developing popular brands?

Ai Tiecheng: If Li Bin wants to do something, he starts thinking a long time ago. When he first started his business in 2014, he began to want to enter the mainstream home market with a new brand. Because NIO is only a high-end brand, the global market of $0.05 million or more accounts for 15-18%, and the overall market size is about 10 million vehicles; the mass market (0.03 million-0.05 million US dollars) is about 50%-60%, which is more than half.

China has changed so fast in the past two years. When I first joined in 2021, I actually wanted to be a Volkswagen or Toyota in the smart era. Because in the past, the best thing the oil truck era did for mainstream household users was Volkswagen Toyota. Why did I compare Tesla ModelY and Rongfang during the press conference on May 15? This is completely consistent with our early thoughts.

Q: How has the positioning and understanding of music changed since it was initially targeting Volkswagen and Toyota, but now targeting ModeLY?

Ai Tiecheng: We discovered that in the gas truck era, there were “bullcars” such as Toyota Rongfang, Honda CRV, and Volkswagen Tiguan L. Today, looking at the US market and the European market, including Southeast Asia, these three cars are still very good cars.

However, China is developing too fast; these cars are not good in every aspect of intelligence. We soon stopped watching them, and later targeted Tesla ModelY. Li Bin said they wanted to be 10% cheaper than it, and the product was even better than it. At that time, he called out ModeLy, which can exchange electricity. Netizens called it “Hardcover Plus Power Exchange ModeLY,” and we achieved our position very well at the time.

Q: It's been five years since ModelY was launched, and no car can replace it. What is the motivation for the ModelY challenge?

Ai Tiecheng: Up to now, Modely is the only mid-size SUV company, with an average sales volume of close to 40,000. Because it was the first to enter this market, it also did a good job in terms of space and energy consumption. Coupled with Musk's aura, it is still very strong in user perception.

However, if a good product is not updated for too long, it may be more difficult to sustain. Our domestic automobile industry is iterating too fast. There may not be a product as capable as the Ledao L60 on the market in the past. Safety, comfort, large space, and low energy consumption can all be achieved. I think the next generation of the world's first model should be a Chinese brand.

In fact, I'm thinking about why brands such as Japan and Europe are not keeping up in terms of intelligence. Chinese technology companies and millions of software college graduates every year have a strong talent base, and Internet companies are also quite developed. These are the fundamental reasons why China can lead the world.

Q: Now that Tesla has announced FSD's roadmap to China, will this be the new killer?

Ai Tiecheng: I'm also looking forward to it opening in China, but it will take time for them to really drive like old drivers in urban areas. New domestic forces have done a very good job of smart driving. Ledao is also the only brand that can be used for national high-speed pilots and urban pilots as soon as it is launched. This is also the result of NIO's overall empowerment.

Q: Previously, Toyota and Volkswagen empowered Porsche and Lexus, but from the luxury market to the mainstream market, how can we balance cost and product strength?

Ai Tiecheng: The L60 is very simple. The entire product revolves around safety, comfort, large space, intelligence, and electricity consumption, and the core needs of mainstream home users. I often talk to my team about preparing staple foods and main dishes to the end, focusing on the high frequency needs of home users; we don't do low frequency ones; the product power of L60 fully shows this.

The real bottom layer is actually technology-driven. When we first set up the team, I discovered that the Chinese talent was excellent. Not only are we at the configuration level, we are already completely ahead of the rest of the world in terms of technology. The motors we make are very small and powerful, and also save electricity and space. In addition, we have a power exchange to completely relieve battery life anxiety.

Q: Many of the basic configurations of the L60 are even higher than NIO ES6 and ET5. Will the two brands overlap in user resources? So how do you separate brands from Ledao and NIO?

Ai Tiecheng: Judging from the reservation situation, less than 5% of users are in the NIO system, and the vast majority are new user groups. Many people ask why Ledao doesn't belong to the NIO brand; they just want to be differentiated. The NIO brand will be more inclined towards high-end business, and the music will focus more on home users.

Our bottom line is the same, but the more consumers can perceive parts, the more different they will be. The reason behind this depends on the positioning of the two brands and the differences in the crowd. For example, in the past, Mercedes-Benz and BMW had many business attributes. In terms of brand positioning, business attributes were a little stronger, and family attributes were weaker. You wouldn't buy a Mercedes-Benz C and say why this car doesn't have more space than a Highlander, and it's still more expensive than a Highlander.

In the long run, a technology flagship is truly luxurious. It must be a technological pioneer; it must do extreme innovation; Ledao may not necessarily be the most innovative one; NIO can delegate some technology to it.

Q: There seem to be fewer and fewer pure electric cars on the market. What do we think?

Ai Tiecheng: We don't make transition products. A lot of people ask me, now that the competition is so fierce, why didn't you order it sooner? Because we just want to be the ultimate product, this is very firm. The average usage period for home users is 7-10 years, and the products that no home users want to buy will be out of date the next year. This is also a pain point for many home users. Whether in terms of driving the situation or intelligence, we need to use the latest technology.

But why did we choose to launch in May and then deliver the car by the end of September? Since I'm a new brand, it takes about 3-6 months for home users to consider buying a car. From the beginning of the demand until he learned about the final car purchase, everyone should be given three or four months to consider and compare.

Q: I mentioned before that Ledao needs to be a leader for 3-5 years, but now it's developing faster and faster. How can we guarantee that we can actually maintain the lead after 3-5 years?

Ai Tiecheng: True smart trains started with Tesla, and it's been ten years since then. We are predicting when the final product shape will take shape. For example, the first three generations of the iPhone tested the waters, and the iPhone 4 was considered the final smartphone product. Although it has now been iterated to the iPhone 16, essentially there aren't many changes other than changing from 3G to 5G; its updates are all minor improvements.

Back to trains, the voltage ranges from 400V to 8,900 volts. Even if the current flow rate is not enough, 900V is quite an ultimate product; the intelligent architecture has also integrated the four domains. Perhaps this industry should have already reached the point where there are relatively final products, and what we are doing is technology that is close to the final product form. It should continue until the next 5 years, or face the next 10 years.

Q: Now that Ideal and Xiaopeng are sinking, everyone seems to be working in the family market. What are the advantages of Ledao as a latecomer?

Ai Tiecheng: Back to being a user, user insight is my strength. We have conducted many surveys on mainstream family cars around the world, and one thing is very consistent - users in this price range are at a stage in their lives where they have upward goals, and the upward trend is better.

Family users buy cars when they are very happy. Getting promoted and getting a salary increase, getting a partner, and having children are all very happy and happy times in their lives. Since we are a family user, can we have fun with Garak? The brand personality we set for ourselves is warm, reliable, and sincere.

Assuming China's 22 million vehicle user market, the 0.15-0.35 million market was over 8 million last year, and may be 10 million by 2025, 85% of which are home users. At this point, it depends on who does a better job, and who can satisfy the best experience and lower costs.

Q: Will Ledao further disrupt the 0.15 million market after using the electricity rental service?

Ai Tiecheng: Yes, 80% of NIO Oil users use the Baas plan. We anticipate that the Baas of Le Dao will be relatively high. 39% of Ledao L60 subscribers have compared ModeLY, but very few compared fuel trucks.

After leasing electricity, Ledao can reach less than 0.2 million. In fact, Ledao needs to be the last bastion of joint ventures - mid-size SUVs. In this regard, Ledao also has advantages over NIO. For example, the 0.35 million yuan ES6, and the 0.28 million rent doesn't have any fuel trucks. Once Ledao enters the 0.16-0.17 million range, there are a lot of fuel trucks there. Even if you add the monthly electricity bill, it's much lower than its fuel bill.

He probably bought a car worth 1.67 million today; he probably didn't settle the accounts; I want to help him figure it out. If you drive a Tiguan or Rongfang, the fuel cost is 9,000 yuan for 20,000 kilometers a year. Our product experience is several generations ahead of it. Plus, the cost of use is lower than that, the electricity costs and maintenance are cheaper, so why not try it out?

Looking at a car with more than 200,000 household users, this is a significant investment for home users; it is probably the only car in the family. He must fulfill his needs such as picking up children to school, driving to work, and taking his family on weekend trips. In the past oil truck era, the product value and strength of about 200,000 cars were the strongest.

Back to the volume of everything, and at the end of the day, back to the basics. We are also looking at how to explain this to users. You can buy a better car that will help you save money. This is our biggest strategy.

Q: How many models are currently planned by Ledao?

Ai Tiecheng: Now there are 3-4 models. For example, the three or four best cars sold by Toyota back then, the 200,000 were Rongfang and Jiamei, and the other one was the Highlander. Because families need a large SUV, we need a big SUV. We call the L60 a smart family mid-size SUV. The second SUV has three large rows and revolves around a large family of three generations and many children.

We only focus on popular models; that is, the models that most users buy.

Q: The current order has exceeded management's expectations, but this year's estimated production capacity is only 20,000 vehicles. NIO has suffered losses before. Has Ledolai considered this risk?

Ai Tiecheng: The rules of crawling production are inevitable; every company must experience it. A few thousand units in the first month, a few thousand in the second month, and 10,000 in the third month, it may be possible to reach 20,000 units per month as originally anticipated by April-June. We are trying to improve as much as possible. In fact, starting in the first half of 2022, our team has procurement, quality and other departments specially stationed at suppliers, and the ability to begin delivering 20,000 per month.

Q: The Ledao battery supports 60 degrees and 85 degrees, but the NIO battery supports 70 degrees and 100 degrees. How can we solve the battery compatibility problem.

Ai Tiecheng: Technically, it is already compatible. There are NIO and YouleDao batteries. The battery compartments of the 3rd generation (21 blocks capacity) and the 4th generation (23 blocks) are very large. Currently, they are not full; only about a dozen blocks have been placed.

We will prioritize battery investment based on the usage of users around the power exchange station. If there are a large number of users around the power exchange station, a few more batteries may be placed inside, which is probably the case.

Q: How is Ledao's idea of opening a store different from NIO, and why did half choose to open it in an auto city?

Ai Tiecheng: Tesla, ideal. Basically, where they have them, we have us, because they've already stepped on it once. In the 0.15-0.35 million range. It's best if it has an agglomeration effect, because users can't just look at one brand and buy a 0.2 million car. Generally, they have to compare three or four cars.

Q: What are your biggest challenges in the automotive industry in the past three years?

Ai Tiecheng: I've always been building brands, but today the way we communicate with brands has changed a lot. We want Ledao to be a warm, sincere, and reliable brand. How can we stick to the bottom of our brand and at the same time let others know that we stand out. This is something I need to think about.

Q: Isn't it more difficult to start a new brand now?

Ai Tiecheng: I think we're fine. Our company has its own traffic. Of course, my goals are also ambitious. I think being a new energy source takes time, and others need to know you better.