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Recently, Xilai Motor announced its entry into the German, Dutch, Danish and Swedish markets, as its innovative subscription model once sparked a lot of heated discussion among netizens. It is understood that at the European press conference held by Lvlai Motors last week, it said that it had launched a "subscription model" in four European markets. As to why the subscription model is launched in the European market, Li Bin said that vehicles will eventually become services and, in the final analysis, consumer goods. Users used to have a lot to worry about. NIO hopes to simplify the interface of user services and turn the car into a service through various attempts. In addition, it is to help Xilai enter the European market more quickly and increase the gross profit margin of vehicles, coupled with the high acceptance of the "right to use" and "subscription model" in the European market.

The "subscription model" of the four European markets is mainly divided into two types: short-term subscription and long-term subscription, that is, users can choose models with different configurations and different battery capacity to subscribe according to their own needs, with a minimum lease of one month and a maximum of five years. Short-term subscribers can cancel the current month's subscription at any time two weeks in advance, and can change their subscription vehicles at will, and the monthly subscription fee will be reduced with the increase of vehicle age; the long-term subscription period is 12 to 60 months. Users will enjoy a lower and fixed subscription fee. If the user does not terminate the subscription after the subscription expires, Ulai will renew the subscription automatically in accordance with the flexible subscription terms. The subscription price depends on the subscription mode, vehicle configuration, battery capacity and so on. in addition, the subscription price of the same configuration model is also slightly different in different countries.

Take the German market as an example: the monthly subscription fees for the 75-degree battery pack short rent of ET7, EL7 and ET5 in Germany are 1549, 1669 and 1249 euros respectively (equivalent to 10734, 11565 and 8655 yuan respectively); long-term monthly subscription fees are 1199, 1299 and 999 euros respectively (equivalent to 8308, 9000,6922 yuan). As a reference, the monthly rental price of Tesla Model Y in Germany is about 600 euros, while that of Mercedes-Benz EQB is about 500 euros, while that of Ford Electric Horse and Volkswagen ID4 is less than 500 euros. It is not difficult to see that the rental prices are higher, even at about the same price as Porsche Taycan.

In response, Li Bin also responded, "our prices, like Mercedes-Benz and Porsche, are actually reasonable, and we want the products to return to the essence of price." We are all-inclusive at one price, others are just simple car prices, and many prices need to be calculated separately. " It is understood that the "subscription model" not only provides vehicles for users, but also includes full insurance, maintenance, winter tyres, scooters, door-to-door pick-up and delivery services, and flexible battery upgrade services that will be provided in the future. At the same time, subscribers will become a member of the user community, participate in all kinds of user activities held by NIO, use NIO Center, etc.

In addition to the hot discussion among netizens about the price, its innovative subscription model has also made many netizens think that the "rent but not sell" strategy is adopted by many netizens. In response, Li Bin, chairman of Xilai, responded: "at the press conference, we only said that we would provide this lease, but we did not say not to sell it." In fact, this should have been done step by step, because at the initial stage, it would be more troublesome if these models were carried out together. " In fact, for Xilai, the subscription model is adopted to enter the European market, which is also combined with the local situation in Europe.

It is understood that in the European market, most people are willing to want the right to use the car, because the company car (employees only enjoy the right to use) can enjoy more tax concessions. A company car refers to a car purchased by a company or organization for employees to use in their business or private life. The company's cars account for more than 50% of EU car sales and are an important part of the European car market. Li Bin also said: in most other European countries, high-end company car subscription has formed a tradition, which is easy for most consumers to understand and accept. If you do not consider the infrastructure or the entire upfront fixed investment return, but only consider the vehicle subscription model itself, the gross profit margin of vehicles under the subscription model will be higher than that of selling cars, it said. "vehicle rental pricing under the subscription model basically takes into account various factors, such as reasonable gross profit margin, sustainable operation and so on." At the same time, Li Bin also pointed out that NIO will not do anything that "loses money and makes money."

Of course, all business logic comes from the market. From the point of view of the launch of the subscription model in the European market, it is a successful attempt if the subscription model in the European market can bring a high response to the market. After all, as Li Bin said: from car sales to vehicle subscription is very difficult, but from vehicle subscription to sales is relatively easy. However, although the subscription model is in line with the current consumption concept in the European market, it plans to build 20 exchange power stations in Europe by the end of 2022, and the number is expected to reach 120 by the end of 2023. It will also carry out its own sales business in the European market, and the investment of these heavy assets and the high cost of obtaining customers in the early stages of the brand will also bring challenges to the operation of Lai Motor in the European market.

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