NIO launched its long-awaited BaaS (Battery as a Service) on August 20, and the centerpiece of the launch was the two special "car invoices". For the first time, an NIO ES6 customer completed the purchase process of "buying a car without a battery".
The customer's "Motor Vehicle Sales Invoice" did not include the price of the battery, while the other invoice showed that the NIO battery had been resold by NIO to "Weineng Battery Assets" for 70,000 RMB (about $10,000).
Under the BaaS model, consumers can buy NIO's cars with a 70,000 RMB battery price exclusion. Users then have the option to rent battery packs of different capacities based on their needs, paying a monthly service fee.
NIO launches BaaS battery rental service, brings car prices down by about $10,000
Like previous owners who buy the car with the battery, they can still enjoy NIO's battery swap and battery upgrade services, as well as access to China's new energy vehicle subsidies and purchase tax exemptions.
NIO has already separated the battery from the body since its inception, and this time it has further separated the ownership of the two.
This may seem like a simple change in the way customers buy, but it's significant for NIO.
The model behind this is more like a "new tool" or "adjustment mechanism" enabled by NIO, which in the future will continue to balance the cost of purchase with the cost of use for NIO electric vehicle users.
For now, BaaS has two main core advantages. First, it significantly lowers the "barrier to purchase" for users. Second, it puts EVs and fuel-efficient vehicles on the same playing field. In terms of cost of ownership and cost of using the car, NIO is generally less expensive than comparable luxury brand gasoline models.
Li Bin, the founder of NIO, said at the launch that with the current BaaS basic pricing model, users can enjoy the price of the car minus 70,000 yuan, and then pay 980 yuan per month for battery rental service.
The original NIO ES8 price is 468,000 RMB, ES6 358,000 RMB, and EC6 is 368,000 RMB. After taking into account the subsidy, if you choose BaaS mode to purchase the car, the starting price of ES8 becomes RMB 380,000, ES6 starting price becomes RMB 273,600 and EC6 starting price becomes RMB 280,000.
Since the battery pack is not included in the purchase price of the car, the down payment and monthly payment for the customer's loan is also calculated with the battery pack removed.
There's a price difference of close to 90,000 RMB, and in the case of the NIO ES6, if you also choose a down payment as low as 15%, you can buy the more expensive NIO for the same down payment as the Tesla Model 3.
This achieves a lower barrier to entry than current auto finance solutions can offer, making it even more attractive to new customers, while not affecting existing customers who have already bought a car and battery.
On the other hand, the launch of BaaS, NIO's battery rental service, will better balance the cost of purchasing a car with the cost of using it.
Electric cars have always been more expensive than similarly sized fuel-efficient cars in their class because of the high cost of batteries.
But with NIO's BaaS model, both the cost of ownership and the cost of the vehicle are lower than gasoline models of the same class.
The BaaS model will also address the battery degradation, the inability to upgrade batteries, and the high variability of vehicle warranties that have been affecting the popularity of EVs.
It smoothly puts EVs and fuel-efficient vehicles on the same playing field for direct price comparison, which will encourage more gasoline car users to switch to NIOs more easily.
Lowering the price barrier is just one of the advantages of this BaaS model.
Li Bin used the analogy of the airplane industry to make a more graphic point. He said that the airplane body and engine have different operating entities. The life of an aircraft engine is measured in terms of time, and after a certain amount of time, it has to be repaired significantly or retired at a certain time. But the airframe of an aircraft is different, and the airframe will last for decades without problems.
Weineng Battery Assets, the owner of the battery assets, is an important part of BaaS.
It is owned by China's largest automotive lithium-ion battery maker Contemporary Amperex Technology (CATL), Hubei Science and Technology Investment Group, Guotai Junan International Holdings Ltd., and NIO (Anhui) Co. and was incorporated on August 18.
Li Bin also revealed that a number of new shareholders will be joining the company in the near future and are in the process of going through the process.
NIO president Qin Lihong said that this approach really brings the automotive power battery back to its essence as an energy source, rather than playing the role of a component with an energy source.
This becomes an "offensive weapon" or "adjustment mechanism" that NIO can use to balance the cost of purchase, cost of use, etc. for NIO EV users in the future.
A simple guess is that it will be difficult for NIO to be dragged into a price war with its competitors because NIO will only need to adjust its battery leasing service to offer new customers discounts, such as free battery leasing for the first three months, etc. This will allow NIO to easily adjust the market supply and demand without changing the price of the car.
