He said it Luca De Meonumber one of Renault and Acea, the association of European car manufacturers: «The Chinese have taken a generation advantage, about 6-10 years» compared to us. A huge gap that can be explained by the strong pressure from the Beijing government towards the production of plug-in cars and the control of the raw materials to build the batteries. But it’s not enough. Today, well-made, technologically advanced cars are coming out of Chinese factories at a frenetic pace, ready to compete with Tesla and EU producers. A result obtained thanks to strategic choices. As revealed in this interview by an Italian manager who has been working for almost ten years at Nio, a Chinese company that produces electric cars in the premium segment that have the possibility of replacing the battery in a few minutes in special “swap stations”. His name is Danilo Teobaldicomes from Italdesign-Giugiaro and in 2015 decided to join the newly formed Nio, because he was “impressed by the vision, attitude and spirit of the founders William Li and Lihong Qi”. Today Teobaldi And principal chief engineer and responsible for future technologies at Nio.
Based on your more than twenty years of experience in the automotive industry, what are the strengths of the Chinese industry?
First, Nio is an international company, present throughout the world and, to date, in five European markets. Our cars are designed and engineered globally, with design facilities in Munich and research and development facilities in Germany, the UK and Hungary. Nio alone has filed over 9,100 patents and employs over 11,000 people in research and development. Secondly, the Chinese automotive industry has undergone an important evolution, or perhaps a revolution, with the advent and success of electric cars for which the Asian country is by far the main market. In recent years, Chinese products have proven to be of an equal or often even superior level to Western ones. Chinese companies (and Nio above all) have been better able to identify customer needs in the new era of mobility transition. Another success factor is linked to the component supply chain which benefits from economies of scale, significantly reducing production expenses. Vertical integration within companies allows for leaner production and quicker responses to disruptions. The country’s advanced logistics infrastructure and access to essential raw materials further enhance efficiency and cost-effectiveness. Last but not least, the Chinese companies that are succeeding are those that have maintained a mentality and operations typical of start-ups with obvious advantages in decision-making processes and speed of execution. In a highly competitive market, being late makes a huge difference.
A study by Alixpartners highlights that Chinese companies develop a new vehicle in half the time compared to traditional companies, 20 months versus 40: did you also find this at Nio?
The development time of a Nio product is in that order of magnitude. It is important to note that high-speed development is conducted without sacrifices on the product experience and certainly without discounts on the safety, quality and reliability of the car, as confirmed, for example, by the 5-star Euro Ncap obtained by all our six models in Europe.
Let’s go back to vertical integration: how does it work at Nio?
Vertical integration is one of the main factors in containing product costs which guarantees companies a clear competitive advantage. From day one, Nio has invested in the vertical integration of strategic components such as batteries, traction systems and our unique “Power Swap Stations”. Over the years we have expanded the list of “homemade” components to include other systems such as suspension or our autonomous driving chip. Last but not least, the centrality of software in electric and connected cars must be remembered. At Nio we introduced the SkyOs operating system, entirely developed in-house. A one-of-a-kind solution that connects different dedicated operating systems and serves as the technological foundation for Nio’s present and future in the era of smart vehicles and artificial intelligence.
How is Nio positioned among Chinese electric car manufacturers?
Nio is a premium brand, offering superior quality and content electric vehicles with innovative technology, personalized services and a deep commitment to environmental protection, which is reflected in a higher price. The vast majority of other Chinese companies instead started from the mass-market segment. Secondly, Nio is global and is recognized as such. We have been in Europe and the USA since 2015: we started with our design headquarters in Munich, the advanced engineering center in Oxford and the digital engineering headquarters in San Jose USA; and we continued to invest in research and development by opening centers in Berlin and Budapest. From a product point of view, the thing that distinguishes us most clearly is the possibility of exchanging batteries. Nio is unique in offering its own network of swapping stations to allow users to replace the battery in three minutes. Finally, we have redefined the automotive landscape by moving to a “user-enterprise” approach: in each of our models, all functions and their updates are strictly adapted to the needs of the user, who can provide feedback to our developers both online, via our interface in your Nomi car or the Nio app, whether offline, in our Nio Houses or Spaces. This approach distinguishes us: at Nio we do not talk about «Software defined vehicles» but rather about «vehicles defined by the user experience».
How many swap stations do you have in Europe and what is the future goal?
We have 56 battery exchange stations in the countries where we are present. With our charging stations we are already able to cover more popular routes throughout Europe, such as Amsterdam-Berlin, Munich-Amsterdam or Oslo-Copenhagen. We continue to explore additional options to expand our network. Then our cars can be recharged at the charging stations like all electric ones.
And when will you arrive in Italy?
We don’t have a certain date and we are evaluating different options. Tariffs and being high-end don’t help at the moment.
One of the advantages of the interchangeable battery is the possibility of adapting your vehicle to the development of new batteries without having to replace the car: right?
Absolutely yes. This is part of the ability to keep the product cutting edge throughout its life cycle. And the battery is the most critical and strategic system for electric cars, where improvements happen very quickly. Thus, over a 10-year life cycle three or four battery cycles can be used with various increments of available energy. Furthermore, Nio operates with the «Battery as a service» system which consists of purchasing the car but renting the battery in order to have different sizes of batteries on request. A user who rents a 75 kWh battery can upgrade to a 100 kWh battery if necessary. This means that we provide our users with charging services that meet all their needs. The battery is rechargeable, replaceable and upgradeable.
However, to make this expensive business sustainable, more manufacturers would need to adopt the same battery: has Nio found allies in this sense?
On a global scale, Nio has more than 2,600 trading stations. The value of the infrastructure and the potential of the product in terms of charging and flexibility in installing the energy I need when I need it are now fully recognized by Nio users and other companies. For this reason, an alliance was recently created, promoted by Nio, between car manufacturers and energy managers. Among the objectives of the alliance are the standardization of exchange systems, the management of the battery park by third parties and, why not, also the sharing of platforms between different brands. Among the members of the alliance, to name a few, Longi, Geely Holding, Changan Auto, Gac Group, Wenergy Group, Csg Energy Storage Technology, Faw Hongqi.
Nio produces “Swap stations” in Hungary: when will it also produce cars in Europe?
Our production capacity in China is currently sufficient to meet the needs we have in Europe. Local production is decided when sales volumes justify it. We are monitoring the market situation.
Last question: would you return to work in Italy?
Question that would take hours to answer. Let’s say that at the moment I’m happy in Nio and I’m lucky enough to be able to be in Italy on a sufficiently regular basis and therefore able to enjoy the best of both worlds (or three, given that I spend half of my time in Oxford).
