On November 9th, Li Bin, CEO of Xilai Motor, issued a full letter confirming 10% layoffs, according to the Financial Associated Press. Xilai sub-brand Alps has begun to lay off staff and may no longer be an independent project in the future.
According to the report, people familiar with the matter have revealed that Alps staff will be assigned to various departments of NIO, and some posts will be cut accordingly. After the merger of departments and posts, small-scale, intra-departmental adjustments will continue until June next year. It is not known whether the Alpine team will return to the Ulay system, but the Alps will continue to launch models independently.
For the Alps, many people may not know about it. In fact, with regard to the NIO Alpine brand, which was first exposed in 2021, officials have revealed that the brand pricing range is between 200000 yuan and 300000 yuan, and the brand model is expected to be mass-produced in 2024. Last year, Li Bin also revealed that Xilai is speeding up the research and development of more than 200,000 models and will launch a new mass market car brand, which will be comparable to Standard Tesla Model Y and Model 3, but the price is about 10% cheaper than Tesla.
It is worth noting that the Alpine brand has not yet officially landed, there is news on the market in 2022 that Lai Automobile plans to launch a third car brand outside the two brands of Ulai and Alps, the third brand positioning is lower than the second brand, mainly hit the 10-200000 yuan market, the project code name is Firefly Project (internally known as FY).
In fact, it is not surprising for Lulai to launch a sub-brand. Li Bin said earlier that he hoped to break even by 2024. However, in terms of the current state, it is still a bit difficult for NIO to make a profit. Because from the perspective of its vehicle cost, marketing cost, and the degree of competition in the market, it is not easy for Xilai to make a profit in 2024. In the face of fierce market competition, it is only by further expanding the scale effect that it is possible to achieve a break-even.
First of all, in terms of sales, Xilai delivered 16074 new cars in October, although it increased by 2.77% month-on-month and 59.84% from the same period last year. However, compared with Xiaopeng and ideal cars, there is still a certain gap in sales, with a cumulative sales of 126067 vehicles from January to October. Sales are not ideal, and the losses behind them continue to grow. Relevant data show that the net loss of Lulai Motor in the second quarter of this year was 6.056 billion yuan, an increase of 119.6% over the same period last year, and the cumulative loss in the first half of the year reached 10.926 billion yuan. To this end, Xilai Motor also had to lay off staff.
On November 3, Li Bin, CEO of Xilai Motor, released an internal letter confirming the layoffs. It says the company will lose about 10% of its jobs, and the specific adjustment will be completed in November. Li Bin mentioned in the letter that Ulai delivered five new products this year and gained more than 40 per cent market share in the pure electricity market with a transaction price of more than 300000. However, "there is still a gap between the overall performance and the expected goal". In order to qualify for the finals, it is necessary to further improve the efficiency of implementation and ensure that there are sufficient resources for key operations.
As for the layoffs in NIO, some industry insiders pointed out that this adjustment and layoffs in NIO may have a certain impact on the company's operation and employee morale, if the company can make a smooth transition and adjust its strategy, then it is possible to reverse the situation of poor sales, but if the company cannot effectively solve the problems of personnel and new product launch, then the loss will be further increased and the situation will be more passive.
Of course, there is no doubt that the layoffs are intended to preserve strength in terms of increasing revenue and reducing expenditure, or to pin their hopes on sub-brands Alps and Firefly to make a profit. At the first-quarter earnings conference, Li Bin revealed that the development of the first Alpine model is progressing smoothly, and the second product is already under development. In 2024, NIO will not launch a new car, but will shift its focus to the Alps, with the goal of building a popular car. This time, Li Bin also made it clear in the full letter to ensure that the nine core products of the three brands are on the market as scheduled.
At present, there are ES8, ES6, EC7, ET7, ET5, ET5T and other models on the market, all of which are priced at more than 300000 yuan. The emergence of "Alps" and "firefly" brands, for Xilai Automobile, can explore and grab a larger territory in the market to meet different consumer needs, to a certain extent, is also conducive to the improvement of sales. After all, from the positioning and price of the three major brands of Ulai, Alps and Firefly, the three brands cover the luxury market, the high-end market and the middle-and low-end market. However, at present, many car companies are also laying out their new energy brand models at different prices. with the release and listing of these models, it will also face great challenges for Lulai Automobile. Whether the models launched by the Alps can bear the important task of large-scale sales, which remains to be verified by the follow-up market.
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