The first model from the Nio battery swap alliance is doing winter testing, and the first model of the Firefly sub-brand will start selling in Europe next year.

Nio (NYSE: NIO) held a year-end 2024 media event today in Shanghai, the city where it's headquartered, and the company's founder, chairman, and CEO William Li answered more than 200 questions during the three-hour-long communication.

As a background, the electric vehicle (EV) maker has in past years held a large-scale media event at the end of the year, just days before Nio Day, to respond commonly asked questions.

This year's event was held at a hotel in Shanghai, and CnEVPost was there on-site. The upcoming Nio Day 2024 will be held on December 21 in Guangzhou, where the company will officially launch the ET9 and launch the Firefly brand.

In today's communication, Li answered a total of more than 200 questions the company collected in advance from participating reporters, covering a wide range of topics. Here are the key takeaways of the event by CnEVPost.

Sales target

Li reiterated Nio's sales target for 2025 is to double from 2024, or around 440,000 units.

The company's management first mentioned the 2025 sales doubling target in its third-quarter 2024 earnings call on November 20, but didn't provide more details at the time.

Nio at the time guided for fourth-quarter vehicle deliveries to be in the range of 72,000 to 75,000 units, meaning it was expecting 2024 deliveries to be in the range of 221,000 to 224,000 units.

In the media meet today, Li said the company expects sales of Nio's main brand to grow moderately in 2025 compared to 2024, without mentioning further details.

In the January-November period this year, the Nio brand delivered 180,599 vehicles, up 27.16 percent year-on-year, according to data compiled by CnEVPost.

The Onvo sub-brand is expected to achieve an average of 20,000 units per month in 2025, above 200,000 units for the year, Li said.

For the upcoming Firefly brand, Nio expects sales in the thousands of units per month.

Responding to a question from CnEVPost, Li said the company is confident of meeting its fourth-quarter deliveries guidance with more than 30,000 units delivered in December.

Nio needs to deliver at least 30,449 vehicles in December to meet its fourth-quarter delivery guidance, according to CnEVPost's calculations.

For December 1-11, Nio Inc received the highest number of locked-in orders for the same period in the past six months, Li said.

Onvo and Firefly

Li today reiterated that the Onvo sub-brand will deliver over 10,000 L60 vehicles in December and see monthly deliveries reach 20,000 in March next year.

The Onvo L60 was launched on September 19 and began deliveries on September 28 and is still in the capacity ramp-up phase. Customers who order the model now will have to wait 8-10 weeks for delivery.

Li said that due to the long waiting time for the L60, some customers have opted for Nio models in Onvo stores.

Last month, Onvo sales team helped sell 200-300 cars for the Nio brand, according to Li.

Li said that the Onvo brand has not cannibalized Nio, saying that only 2 percent of the sub-brand's customers were originally considering buying a Nio model.

The Onvo brand will launch two additional models in 2025, with deliveries starting in the third or fourth quarter, Li said.

On the November 20 earnings call, Nio management said Onvo would launch two SUVs next year, including a six/seven-seater and a large five-seater.

Onvo's product lineup won't be as large as the Nio brand, with a maximum of four or five models, according to Li. There are currently eight models being delivered under the main Nio brand.

Li reiterated that the number of battery swap stations available for Onvo will reach 1,000 by the end of this year and 2,000 by next April.

The company is positioning the Firefly brand as a premium boutique small car, similar to the BMW Mini and Mercedes-Benz Smart.

Li said there is consumer demand for such small cars, but they don't have good choices in terms of supply.

In the Chinese market, the Firefly brand will have only one model and will continue to iterate on it.

The Firefly model will be priced similarly to the Mini cars in China.

In overseas markets, the Firefly brand may follow a different strategy than in China, and Nio has not yet decided whether to launch multiple models for Firefly overseas, Li said.

Firefly is important to Nio Inc's strategy of entering global markets, where there is a big demand for small cars, according to Li.

The company will begin selling Firefly models in Europe in 2025, in a move largely synchronized with its moves in the domestic market.

The first Firefly model was initially built for the European market, but has since shifted to be launched in China as well, considering that there is demand for such models in the country as well.

The Firefly's battery swap network is cheaper to build and easier to deploy because the packs are smaller and designed to be deployed quickly around the world.

Firefly will share the Nio brand's sales channels and will also have its own user touchpoints, Li said.

The company will maintain reasonable gross margins on the Firefly brand and work to improve it over time.

Nio still wants to enter 25 countries and regions cumulatively by 2025 and will focus on sales of Onvo and Firefly models in overseas markets as they are less expensive than the Nio brand.

Battery swap alliance

Nio has announced a number of partners joining its battery swap alliance over the past year, saying it will work with them to build battery swap-enabled models, but didn't provide any further details.

Li said today that those efforts are moving forward and that the cycle time to build a new battery swap-enabled model is about 18 months.

The first model from the Nio battery swap alliance is undergoing winter testing, Li said.

By 2027 and 2028, there will be more new models built using Nio's battery swap technology, he said.

No plans to launch hybrids in China

One of the most asked questions at today's event was whether Nio has any plans to launch hybrid models.

Li re-emphasized that the company will not launch hybrid models in China, but did not rule out the possibility of launching such models in overseas markets.

Last month, it was reported that the Firefly sub-brand would launch hybrid models in overseas markets. Nio said in a clarification at the time that it would not launch hybrid models in China, but made no mention of overseas markets.

Li said today that Firefly will only offer battery electric vehicle (BEV) models in China, while plans for overseas are still being studied as charging infrastructure in most other markets is 5-10 years behind China.

Explanation for Nio brand sales decrease

With Onvo L60 deliveries increasing, deliveries of Nio's main brand models have seen sequential declines in the past 2 months.

Li today denied that this was due to the Onvo brand cannibalizing Nio's orders and also said that Onvo was not taking capacity away from Nio branded models.

In October and November, deliveries of the Nio brand were down due to reducing promotions by at least RMB 10,000 ($1,380), Li said.

In the third quarter, Nio sacrificed some gross margins for higher volumes, he said.

For the Nio brand, growth quality and gross margins will have a higher priority in 2025, Li said.

NEV penetration

Li said today that he now expects China's new energy vehicle (NEV) penetration to reach 90 percent by 2027 at the latest, three years earlier than his previous expectation of 2030.

A possible milestone for China's NEV market in 2025 would be for NEV penetration to reach 75 percent, he said.

In November, China's NEV penetration at retail stood at 52.3 percent, the fourth consecutive month above the 50 percent mark, according to the China Passenger Car Association (CPCA).

In China, NEVs include BEVs, plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles. Currently Nio only produces BEVs.

($1 = RMB 7.2702)