Author | Chai Xuchen Editor | Zhou Zhiyu Faced with the trend of new energy electrification and the loss of market share under price wars, joint venture car companies have been "Renovating" their famous cars in an attempt to mount a strong counterattack. On May 30, SAIC Volkswagen's Touareg L Pro was launched. The car, which is said to be "the smartest gasoline car", had been preheated for nearly two months prior to its launch. The launch invited representatives from DJI Car and Tencent Travel, as well as the person in charge of iFLYTEK, all of whom attended in person to demonstrate the strength of its smart driving and smart cabin. As a "meritorious model" of SAIC Volkswagen, Touareg has been synonymous with Volkswagen SUVs for the past 15 years and was once the best-selling joint venture SUV. With a monthly sales volume of nearly 20,000 units for a long time, it occupies a 20% share of SAIC Volkswagen. SAIC Volkswagen hopes that the new Touareg will become a disruptor in the current market, from gasoline car intelligence to a stable price system with value-added buyback policy. In the view of Yu Jingmin, Vice President of Sales and Marketing of SAIC Volkswagen, new energy vehicles still have range anxiety and gasoline cars have an advantage that needs no explanation, but the biggest difference between them and electric vehicles lies mainly in their appearance and intelligence. After fulfilling the core needs of contemporary consumers, this once "famous car" seems to be reborn. Thus, from DJI's advanced intelligent driving solution to iFLYTEK's smart cabin voice assistant, this 200,000 yuan-level SUV brings together the strengths of various parties, aiming to break through the industry's perception that gasoline cars are less intelligent than electric vehicles. The launch of the new Touareg marks the beginning of SAIC Volkswagen's counterattack. In a post-event interview, Yu Jingmin mentioned several times that due to external cooperation and the accumulation of joint venture partners, SAIC Volkswagen's technology center is actually ahead of many independent brands, but unfortunately the rhythm is too slow. The company will now accelerate its efforts to catch up and even surpass in electric, hybrid or gasoline cars. Yu Jingmin revealed to Wall Street News that the new Touareg is the first gasoline car product in the Pro series, which is focused on intelligence, and that the Passat and Touareg Pro versions will also be introduced within the year. While polishing its technology, it is also preparing for the intelligence of its A-class cars. A counteroffensive war ignited by a gasoline fueled chariot seems to be brewing rapidly. But to be fair, SAIC Volkswagen's intelligence still lags far behind new forces such as Huawei, Xiaopeng, and Ideal. At the same time, in the current context where BBA is crazy about price cuts and the BMW electric car at over 180,000 yuan is setting a new industry low price, the 236,800 yuan Touareg L Pro seems somewhat out of step and the counterattack is difficult to achieve. In response to the challenge, SAIC Volkswagen has given a three-year 20% discount buyback plan. Users no longer need to worry about the fluctuation of vehicle purchase costs and second-hand car prices. SAIC Volkswagen locks in the difference between the purchase and final selling prices of users' vehicles, in a move to crack the price war. This also buys precious time for SAIC Volkswagen to speed up product and intelligence catch-up. This is the backdrop of the efforts to win back the former "king" of the Chinese car market.

In today's weather is good. Today's weather is good.

As the next decade approaches, NIO has delivered a new report card.

On the evening of November 20, NIO released its third-quarter report, and with a record high delivery volume of 0.062 million units, the market expects a more impressive financial performance. However, NIO's performance has never been a simple linear growth strictly tied to sales volume, which adds some ambiguity to external judgments about its fundamentals.

The financial report shows that in the third quarter, NIO's auto sales increased by more than 6,000 units compared to the same period last year, but the sales revenue from autos slightly decreased year-on-year, and the loss also expanded, which seems contrary to market intuition.

The reason lies in the decline of NIO's average selling price, which was 0.27 million yuan per unit in the third quarter, lower than the previously implied guidance of 0.282 million yuan.

The financial report explains that this is due to changes in the product mix. In September, NIO's mid-range models such as the ES6, ET5T, ET5, and EC6 took the lead, contributing over 90% of the sales. This is similar to the situation with Li Auto's entry-level L6 and Xiaopeng's MONA, which have become sales powerhouses.

However, even so, NIO's overall scale effects have begun to emerge, and with the decline in battery costs, NIO's auto gross margin has increased from 12.2% in the second quarter to 13.1%. Coupled with the profit increase brought by high battery swap station utilization, NIO's overall gross margin recorded 10.7%, surpassing the market expectation of 10.5%.

As for the losses, CFO Qu Yu stated that the main reason for the expanded losses in the third quarter largely stemmed from losses in invested enterprises. He believes this is a normal phenomenon in the fiercely competitive automotive industry.

However, objectively speaking, while NIO is seeing a contraction in revenue, expenditures are still growing rapidly. Under the commitment to self-research in technology, the development of new products from three sub-brands, the establishment of stores, and the infrastructure coverage of energy replenishment in every county, NIO still needs to invest a large amount of resources. Yet, according to Chairman Li Bin, this is necessary accumulation before an explosion.

At the earnings conference on the night of November 20, Li Bin set a new goal, stating that NIO aims to double its sales next year (reaching approximately 0.44 million to -0.45 million) and achieve breakeven in 2026, with the target of achieving profitability for the entire year.

In other words, NIO wants to 'borrow' another year or two from the market to realize its grand ambitions and build up a snowball effect in performance.

The capital markets quickly reacted, with NIO's stock price on the Hong Kong stock exchange dropping from HKD 37.05 on November 20 to HKD 35.95 at the close on November 22. Clearly, investors seem to have developed a sense of 'aesthetic fatigue' regarding NIO's grand narrative. The critical question is whether the promises for the following years can truly be realized.

Li Bin's confidence comes from the upcoming multi-brand strategy that will be 'launched all at once,' along with the imminent arrival of a large number of products.

Li Bin revealed that next year, the NIO brand will gradually switch to the NT3.0 platform, entering a new product cycle; regarding Leidao, in addition to the L60, there are two products in the pipeline, six or seven-seat mid-to-large SUVs and a large five-seat SUV; at the same time, the Firefly, positioned similarly to BMW MINI, will be showcased next month at NIO Day, with official delivery set for the first half of next year.

Li Bin believes that the three major brands under his umbrella will each have their own responsibilities, with NIO focusing on improving gross margin, while Leidao and Firefly will be responsible for volume.

He stated that Leidao is currently accelerating production ramp-up, aiming to reach 10,000 units per month by December, with delivery and capacity targets of 20,000 units per month in March next year. The next two family SUVs will directly compete with the ideal L7 and L8, and both models are currently in the final preparations before mass production. Li Bin boasted that their costs and prices will be more competitive than those of Ideal; combined with the expansion of battery swapping facilities, he does not worry about demand.

From the current performance of Leidao, it is evident that with a low starting price, large space, advantages of the BaaS model for replenishment, and the momentum of high-end brands sinking into the market, it has successfully created a hot-selling product, with a relatively adequate number of orders in hand. Li Bin mentioned that while the L60 is not as hot as it was initially, the recent test drive conversion rate remains quite high.

Given this, the sub-brands will become the main force contributing to growth next year. However, industry insiders believe that if NIO wants to achieve profitable growth on schedule, the high-end positioning of the NIO brand must provide crucial lift.

In the current environment of consumer downgrading, NIO has already felt some resistance. After recalling some promotional policies in late October, the monthly sales of the parent brand dropped from a steady 20,000 units to 17,000 units. The revenue and delivery guidance for the fourth quarter indicates that the average selling price per vehicle for NIO will continue to decrease to 242,000 yuan.

Industry insiders pointed out that since NIO adopts high-end services and a battery swapping model to establish a premium image, it needs to release more high-margin products and scale to dilute the initial investments. Compared to the low single-digit gross margin of Leidao and the forthcoming Firefly, whether NIO's high gross margin models can consistently perform will be core to supporting the entire NIO company in eliminating losses.

Qu Yu stated that the target for the gross margin of the automotive business in the fourth quarter remains at 15%, and will continue to increase to 20% next year through optimizing market strategy and supply chain. Li Bin is still confident in this, proclaiming that Leidao brand aims to gradually achieve a gross margin of 15% under the effect of scale; on the other side, the flagship sedan ET9 with 'black technology' is also set to be released soon.

At this moment, Li Bin still holds several cards, but how to combine them into a winning hand according to the timing is the secret of the "gambling god"'s strategy. The next one or two years will be a critical period for NIO to make its move; if it can successfully overcome the challenges, it will obtain the passport it desires to become a giant.