Chinese electrical car maker Nio launches a smartphone at an occasion in Shanghai on Sept. 21, 2023.
Evelyn Cheng | CNBC
SHANGHAI — Chinese electrical automotive model Nio on Thursday launched an Android smartphone, which the corporate expects at least half its users to buy, CEO William Li instructed CNBC in an unique interview forward of the launch.
The telephone, priced from round $900 to $1,000, is an Android system that is about $150 cheaper versus a comparable Huawei telephone, Li mentioned in Mandarin.
He instructed CNBC that amongst Nio users from which the corporate makes a revenue, greater than half are iPhone users, whereas the opposite half makes use of flagship Android telephones from Huawei and different manufacturers.
“I imagine this portion of users are very doubtless to use this new kind [of device] when they’re altering their telephones,” Li mentioned in accordance to a CNBC translation, citing the telephone’s total efficiency and automotive connectivity.
Nio is the primary high-end Chinese electrical automotive model to launch its personal smartphone, which Li mentioned the corporate developed in about a 12 months. Electric automotive firms in China have sought to make in-car leisure and cell phone connectivity a promoting level for his or her automobiles.
Delivery begins on Sept. 28, with orders beginning instantly.
Nio shares
Swedish electrical automotive maker Polestar, which counts China as a main market, instructed CNBC earlier this month it plans to launch a phone in December.
Smartphone firms Apple and Xiaomi have lengthy been reportedly engaged on their very own automobiles.
Less than two years in the past, Huawei launched the Aito model, which sells electrical automobiles in China which are built-in with the smartphone firm’s working system. Huawei additionally sells its in-car software program to different electrical automotive firms corresponding to Avatr and BAIC’s Arcfox.
That connectivity permits drivers to sync their private system settings — corresponding to for music — with the automotive. Nio additionally has a standalone cellular app.
A smartphone for automobiles
While the brand new Nio system resembles a typical smartphone, it comes with a particular button that acts as a key for the automotive, Li instructed CNBC on Wednesday.
The Nio smartphone additionally permits users to join extra seamlessly with the automotive, corresponding to when transitioning between the telephone and the car throughout on-line conferences, he mentioned.
What we’re pursuing is the automotive expertise and the emotional expertise we will present to our users.
The new system is a chance for Nio to earn more money per person.
“We pay extra consideration to the worth that every person brings to our complete model, and it is extra handy to join users. It can be extra environment friendly than earlier than,” Li mentioned. “What we’re pursuing is the automotive expertise and the emotional expertise we will present to our users.”
The telephone is offered to all customers in China, not simply those that personal Nio automobiles, Li added.
He identified that the Nio telephone app has 600,000 lively users a day, about 1.5-times the quantity of automotive users.
Nio holds a product occasion in Shanghai on Sept. 21, 2023.
Evelyn Cheng | CNBC
Nio’s month-to-month deliveries rose to round 20,000 in August and July, after a decline in supply quantity the prior three months.
In the second quarter ended June 30, Nio reported that income from the “other sales” category was primarily pushed by a increase within the gross sales of used automobiles, equipment and energy providers, which greater than doubled from a 12 months in the past to 1.59 billion yuan ($217.86 million) regardless of a decline in complete income.
The firm attributed the year-on-year and quarter-on-quarter improve in different gross sales to “continued progress of our users.”
Europe market
However, Nio does not have plans to launch the smartphone in Europe — at least not till the market grows bigger, Li mentioned.
Nio is in 5 international locations in Europe, together with Germany, and the corporate wants time to deal with growing native automotive providers, Li mentioned, noting these are necessary for auto merchandise.
When requested in regards to the European Union’s anti-subsidy probe into Chinese EVs, Li mentioned the corporate was nonetheless studying the small print.
We imagine time remains to be on Nio’s facet.
It’s extra necessary for the world to cooperate, particularly on addressing local weather points, he added.
“I do not suppose anybody ought to block users from utilizing good merchandise via a number of methods” corresponding to investigations, he mentioned.
Investing for the long run
In China, the penetration of new vitality automobiles has expanded shortly, however an total slowdown in financial progress has weighed in the marketplace.
Competition within the home electrical automotive market is “fierce,” Li mentioned, noting challenges for business friends as effectively.
But he expects enterprise investments will assist Nio create limitations to entry. “We imagine time remains to be on Nio’s facet,” Li mentioned.
He famous the corporate spends about $500 million on analysis and growth each quarter. Other main areas of funding for the corporate, he mentioned, are battery charging and growth of a mass market model.
Nio beforehand mentioned it plans to launch a car within the second half of subsequent 12 months below the mass market model “Alps.”
The firm has confronted financing challenges greater than as soon as since its founding in late 2014. Earlier this 12 months, Nio mentioned it was delaying some spending plans due to lackluster deliveries.
But the corporate subsequently received nearly $740 million from an Abu Dhabi-backed fund. Nio additionally introduced this week a refinancing plan for a portion of its debt.