LeDao welcomes "happy troubles"

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Author | Chai Xuchen

Editor | Wang Xiaojuan

Before the peak season of the auto industry’s "golden September and silver October," NIO and Ledao have already been hit with an overwhelming wave of fortune, welcoming the happy headache of balancing orders and production capacity.

Within a month, Li Bin launched Ledao L90 and the new NIO ES8—two large, three-row all-electric SUVs, both surging in popularity. The former achieved over 10,000 deliveries in its very first month on the market. The blockbuster effect is also pushing the brand outward. "The L90’s pull on the L60 is very clear—this month, L60 orders have also hit a new high," Ledao President Shen Fei revealed to Wallstreetcn.

Shen Fei said rather modestly, "Given our product strength and the team's improving organizational capability, the current (sales) level hasn't reached where it should be."

It can be said that the Ledao brand, together with NIO, is facing significant change and turning point. It’s almost a given: the L90 and new ES8 have put Ledao and NIO back under the spotlight as the main stars.

Next, the continued delivery of the L90 and official launch of the ES8 will carry further expectations from onlookers. Having once suffered from capacity shortfalls amid popular models, how can NIO and Ledao avoid repeating past mistakes and sustain their hot streak? This is crucial to NIO’s promise of turning a profit in Q4 this year.

As for Ledao’s delivery rhythm, internal consensus is to focus on the L90 in the short term. Qin Lihong revealed that, because many parts are shared between models of the same brand, L60 production will partially give way to the L90 for a while. Also, the previously scheduled L80 launch this year will be postponed.

Qin Lihong stated the Ledao L90 is the brand's short-term focus; other models will stand aside. This third quarter is NIO’s turning point: “NIO is now in a phase of regathering energy and rising again—we have weathered the stormy cycle.”

He pointed out that L90’s sales exceeded company expectations. Total capacity will be under pressure in August and September; only in October will it ease. Shen Fei mentioned capacity will see an uptick in October, another step up in November and December, with further growth coming around the Spring Festival. By then, Ledao’s challenge will not be capacity, but whether it can secure more orders.

“Capacity is a small problem; demand is always the biggest problem," said Qin Lihong. He and Shen Fei remain calm about L90’s success: “It’s too early to call it a bestseller. Whether the L90 keeps selling well—we need to watch October's sales. Orders are currently booked through October.”

Despite the explosive growth in orders and soaring stock price, Qin Lihong remains sober: "It's far from time to pop champagne."

Indeed, after years of hardship, NIO has just returned to an upward track, but outside competition is fiercer than ever before. Thus, this year is also the key window to observe if NIO can truly escape the quagmire and leap ahead. Li Bin and his team must go all out in execution and delivery.

Below is a transcript of conversations with NIO President Qin Lihong and Ledao President Shen Fei:

Q: What's the user profile of Ledao L90?

Shen Fei: The L90 user profile is indeed very typical of family customers, with a rigid need for such large three-row vehicles. Some upgrade from previous L60s, some switch over from gasoline cars of other friendly brands, some come from pure electric, some from range-extended vehicles. Some move up from cars costing just over 100,000 yuan to the L90, while others already have very expensive, premium cars at home.

The L90 really meets the large three-row needs of families: the elderly and children are both satisfied—this is the best big family car.

Q: Since the L90 launch and NIO ES8 pre-sales, is there high internal confidence? Any cases of L90 users switching to ES8?

Shen Fei: The new ES8’s arrival definitely has some impact on the Ledao L90—positive impact, making L90 even more viral and selling even more. I believe L90 and the new ES8, spanning from the low 200,000s to over 500,000-600,000 yuan, will mutually drive and benefit each other, making them the best choices for family use.

Qin Lihong: I think the ES8 and L90 combinations have solidified the pure electric path for large, three-row SUVs. The main customers are those with related space and loading needs, and there’s also an obvious trend of switching from other power forms to pure electric.

Q: The L90 delivered 10,000 units in its first month. How long can this steady delivery be maintained? How do you view the "family" label on Ledao?

Qin Lihong: The market is always evolving. Quoting figures today is meaningless. For quite some time, L90 enjoys dominant strength in product and value in its segment; next, it's about our execution.

From a brand perspective, many friends said L60 shouldn’t be limited to family—we also have NIO and Firefly, suited for young, independent, multiscenario use. Firefly and NIO each have their own missions, but family needs are universal and enduring. Families come in many forms. The long-term bond between Ledao and the happy family is critical to the brand’s success; no one can live without a family. But this family positioning places many demands on the brand: With an L90, essentially all generations in the home must reach full consensus—even one objection can kill the sale. This means extremely high requirements: all-round, highly practical, emotionally valuable. The brand’s ability to stand firm in the family segment truly tests our car-building skills. The Ledao brand has been out a year. We’ve hit some bumps, but overall we’re resolutely heading in this direction.

Shen Fei: Production ramp-up is not that fast. Our deliveries in August and September, and even in October, won’t fully ease the pressure. L60 production is up. In October, capacity will climb a little, another increase in November and December, then again around Spring Festival.

Q: What’s the core logic behind capital markets’ optimism toward NIO and Ledao?

Qin Lihong: You might link NIO’s Q1 report, upcoming Q2 report, and July/August sales. NIO has entered a phase of regathering energy and rising again, having weathered the storm. Investors are fundamentally optimistic about a company that persists in long-termism, invests in R&D year after year (especially in fundamental R&D) and insists on the pure electric path, digs deep and puts effort into infrastructure, and builds its own business model.

This whole bundle of colorful, costly efforts is starting to yield results—which may only be a start. It also objectively validates NIO’s persistence over the past ten years. For outsiders, it’s a vote for our strategic direction. For us, it’s not yet time to celebrate—we’ve suffered a long time to see a glimmer of light. We must keep pushing, and recognize that many of our persistent choices were right.

Through the story of Ledao, you can see a team capable of self-reflection, self-denial, and growth, but we are still a startup.

Q: Both ES8 and L90 are large three-row SUVs. What market share do you expect or hope for in this segment?

Shen Fei: I’ve only been at Ledao for five months, so it's hard to say what combined heights L60 and L90 will reach. But with product strength and team capability improving, we haven’t reached where we should be—let’s keep striving upward.

After the L90, whether from direct exposure or breakout expansion, there’s been an obvious pull effect on L60. L60 orders hit a record high this month. This is what the whole NIO group should look like.

Qin Lihong: Ledao will prioritize L90. Frankly, L60 production will give way to L90 for a while, so L60’s deliveries may not reflect true order strength. L90 will maintain over 10,000 units for a while after launch.

The L80 will not begin deliveries this year. We have to focus on a few important things. Many friends advised NIO to do less but do it better. We’re making L90 the short-term priority for Ledao.

Q: As consumer preferences get fussier, NIO’s pricing is very friendly. How have you achieved this?

Qin Lihong: NIO must learn to be good to everyone while keeping the books in order. Don’t underestimate R&D’s impact on cost reduction. Most cost savings in technical, industrial products come from technological maturity and higher volumes—that’s the bulk.

The L90’s single-motor power is strong as it uses the ET9 motor. If L90 had developed a separate motor, costs would have soared. ET9, L90, and ES8 share the same rear motor, so strong power comes with cost spread over multiple models.

Our self-developed Shenji NX9031 chip equals the horsepower of four former flagship industry chips. The cost per car drops by over 10,000 yuan, and with VAT and gross margin, that becomes a 20,000-yuan price advantage.

Four years ago, NIO set up an in-house interior seating R&D team. Many questioned why not just buy seats, but without this, today’s VIP comfort wouldn’t be possible. The physical feel of Ledao seats fundamentally matches NIO’s; Ledao just made the front trunk roomier, while ES8 has a more complete walk-in wardrobe. Each caters to different needs. Underlying R&D progress and cost spreading is a huge factor in cost.

In recent years, including the buyback and joint-venture with JAC factories, we now have four plants running simultaneously. August deliveries will exceed 30,000. As volume increases, manufacturing costs per car drop by several thousand yuan. Efficient management this past year has also helped. Ultimately, it's all about market demand.

Q: Will the Shenji chip and Aquila hardware architecture be implemented in Ledao products to boost competitiveness?

Qin Lihong: The Shenji chip only just entered mass production with ET9 deliveries this year, so initial quantities are limited. We will go NIO first, then Ledao. Ledao models are being planned to gradually adopt the Shenji chip; for now, breaking ground will be left to NIO.

Ledao currently takes the pure-vision route. The two brands must be distinct—not everything can be the same. Regarding the price difference (over 100,000 yuan) between L90 and ES8: For NIO customers, we must clarify where the extra cost goes. For Ledao buyers, we must show that even with the lower price, the car is still great. This really tests us, but it’s the reality.

Q: Why doesn’t NIO have short-term plans for an MPV?

Qin Lihong: Users pay for experience. What do users really mean when they say they want an MPV? The key is space: headroom, legroom, balanced space in all three rows. The L90 and ES8 have achieved this—and even excelled.

They might also mean luggage space when fully loaded. I think L90 and ES8 do better than most MPVs. They mention convenience of getting in and out, height of the step, three-row access, aisle width, whether the floor is flat—we analyzed users’ needs down to the raw basics. The L90 and ES8 perfectly replace most of the MPV’s offerings for customers seeking an MPV.

Compared to MPVs, SUVs have superior handling, safety, power, and aerodynamics on the highway. MPVs are more like long-distance runners. Another small issue: some MPVs are so luxurious that the driver is mistaken for a chauffeur, not a family member. For a family-oriented MPV, it should be clear that everyone onboard is family. On every front, we try to meet MPV functions with three-row SUVs. Of course, some needs remain unmet—MPVs will always have a market.

In the past several years, MPVs’ penetration in China’s passenger car market has stayed around 4%—no more, no less. SUVs have always grown. Last year, SUVs became the largest passenger car category. When planning products, we weigh such facts. Some users really, strongly want MPVs, and that's valid. NIO just can't do everything today.

Q: How can Ledao sustain its current strong momentum?

Qin Lihong: As a young company, the most important thing is learning to toughen up and grow. We never expected a world so kind; there will be new setbacks ahead, but I hope we never trip up twice at the same spot.

Disappointments in the past mostly stemmed from tripping over the same thing more than once, like the new product capacity ramp-up issue. For ET5, there were objective reasons: it was delivered when China’s COVID situation was dire, factories were hard to open, workers lived in tents in the plants, parts couldn't get in. But L60’s issues last year woke us up: Did the so-called objective reasons with ET5 make us forget to reflect on what we could have done better subjectively? Sometimes, having external excuses lets you overlook what you could improve internally.

Next, we’ll produce two large, complex SUVs—ES8 and L90—each with more parts. We’re giving each 100 days to see if ramp-up, delivery, and execution improve. Talk is cheap—after 100 days, results will speak for themselves.

I want to see whether the L90 keeps selling hot—the real test will be October’s full-month numbers. Orders are already scheduled to October. Good performance in August/September means little; what matters is after October. ES8’s success will hinge on December figures.

We’re also setting objectively higher, cooler observation standards for ourselves. We often encourage our team and partners. We’ll celebrate successes as deserved, but we know the contest is at its tensest stage—far from decided, not even time to pass judgment.

Risk Reminder and DisclaimerThe market has risks; investment should be cautious. This article does not constitute individual investment advice and has not considered specific users’ investment goals, financial position or needs. Users should consider whether any opinions, views, or conclusions in this article fit their situation. If you invest based on this, you do so at your own risk. ```