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The storm of financial losses in NIO continues, and articles and opinions that question Wei's operation can be found everywhere. A few days ago, some self-media said that NIO's lifetime free change of electricity had shaken the revenue base of NIO, and Zhu Jiang, vice president of NIO, responded.

On August 24th, 2019, Xilai announced that the first owners of ES8 and ES6 would be able to change electricity for free for life.

Zhu Jiang responded by adding 50,000 yuan in operating costs every day. "NIO launched free power exchange through business departments, financial departments and other joint repeated actuarial results. According to the current statistics of the actual operation of free power exchange, an average of 1000 users drive and change electricity free of charge every day. The charge of a change of electricity is about 50 kilowatt-hours, and the cost of a single bike is about 50 yuan. Because the replacement of the power station and its operating costs already exist, in fact, the current free exchange of electricity will increase our operating costs by about 50,000 yuan a day. "

Zhu Jiang responded to the full text:

Today, I noticed an article by some friends in the media to interpret the financial impact of the policy of free power exchange for the first car owner (hereinafter referred to as free electricity exchange). I would also like to express some views here.

NIO launched free power exchange through business departments, financial departments and other joint repeated actuarial results, according to the current statistics of the actual operation of free power exchange, an average of 1000 users will drive and change electricity for free every day. The charge of a change of electricity is about 50 kilowatt-hours, and the cost of a single bike is about 50 yuan. Because the replacement of the power station and its operating costs already exist, in fact, the free exchange of electricity will increase our operating costs by about 50,000 yuan a day.

Up to now, the home pile installation rate of Lulai users is close to 80%, and the vast majority of users will use home piling in their daily use to replenish energy, which will not bring too much burden to the entire power exchange system and corporate finance.

I would also like to point out that electric vehicles can replenish energy efficiently and quickly through power change, and the whole energy replenishment time is similar to that of fuel vehicles, which largely solves the pain point of long waiting time for charging and greatly improves the user experience. A change of power station can provide power exchange service for 72 vehicles a day, and the efficiency is high. This is also for NIO to further expand the market space and win more sales opportunities. This policy is disguised as Wei to save marketing costs: just after we announced the free power exchange and the introduction of the double-free combination policy, there was a good increase in delivery and orders in the third quarter of Lailai, which shows that the expenditure of this fee is very effective.

It is said in the article that "the whole vehicle will wear out three sets of batteries in 15 years", which may be due to the lack of understanding of NIO's power battery technology. I would also like to take this opportunity to introduce to you that according to the design life and actual test performance of the NIO battery package, it still meets the standard of power battery after 1200 times of full discharge. With regard to the actual use of users, assuming that a battery is fully recharged at 0% twice a week and accumulates 100 times a year, then a maximum of one and a half batteries will be enough in 15 years. In addition, the old battery is not "scrapped", the residual value will not be zero, but can enter the echelon utilization system to continue to play value. And with the improvement of battery technology and the appearance of production scale effect, the decline of battery cost is also expected. Combined with the above, we do not need to spend that much money to maintain a healthy power exchange system.

With regard to lifetime warranty, NIO established lifetime warranty service at the time of ES8 listing, not this addition. Therefore, in the 2018 financial report, it has been disclosed that the relevant warranty fees will be removed from the car price in accordance with accounting standards as deferred income. Therefore, there is no such thing as "improper recognition of income".

I would also like to draw everyone's attention to the policy of free lifetime warranty, which is only aimed at the first owner of the car, not the lifetime of the whole vehicle, and there are two other exclusion conditions (excessive accidents and failure to carry out maintenance at authorized service stations). If the first owner of Wei Lai uses it for an average of 5-6 years (the lifetime free warranty will expire when the vehicle changes hands), the cost we have to bear is not much different from that of the six-year free warranty for Lexus hybrid models. In addition, according to industry practice, parts suppliers will also provide manufacturers with at least three years of warranty claims for their products. In other words, our financial account is reasonable. With the continuous improvement of service and user-oriented awareness in the whole industry, we also see that there are more and more traditional and new automakers, such as Lecker, Xiaopeng, Weimar and so on. For its single or full product line has launched a lifetime free warranty policy one after another.

NIO has indeed made a lot of innovations in China's automobile industry, from ideas and business models to technology, products, user operations and services, etc., we also hope to contribute to the transformation and upgrading of China's automobile industry. We have been groping constantly, and we especially welcome friends from the media to communicate with the public and us more, communicate deeply, and have useful discussions on the development of the industry and enterprises.

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