Alan Ai (Ai Tiecheng) has resigned as President of Onvo, Nio’s mass-market electrical car model, and has additionally stepped down as Senior Vice President at Nio. The announcement was made by way of a put up on the Onvo App on the morning of April 2nd.
In his assertion, Ai attributed his departure to the truth that the Onvo L60, a car he believes to be extremely aggressive, didn’t obtain gross sales volumes matching its product capabilities. He acknowledged shortcomings and deficiencies within the advertising and marketing efforts and took duty because the staff chief.
This announcement comes simply weeks after Ai, in early March, acknowledged his dedication to not “bow his head and admit defeat” when dealing with hypothesis about his potential departure. Nonetheless, inside 20 days, Nio and Onvo have applied a management change, with Shen Fei taking on as the brand new President of Onvo.
The transfer underscores the stress on Nio to realize profitability. The corporate has set a goal of reaching profitability within the fourth quarter of this 12 months, and the success of its second model, Onvo, is taken into account essential to attaining the mandatory gross sales quantity.
Whereas Shen Fei has been appointed as the brand new President of Onvo, the precise management will see a extra direct involvement from Nio’s prime executives. Based on Nio’s announcement, Shen Fei can be accountable for Onvo’s gross sales operations and regional firm administration, reporting to Nio President Qin Lihong. The heads of Onvo’s person operations and repair, Xia Qinghua, and Onvo’s nationwide regional common managers will report back to Shen Fei.
Crucially, core points of Onvo’s product and advertising and marketing can be straight overseen by Nio founder and CEO William Li and President Qin Lihong, indicating a whole integration of Onvo into Nio’s administration construction.
This organizational shift signifies a more in-depth collaboration and useful resource sharing between Onvo and Nio. Enhancing organizational effectivity has been a key focus of Nio’s latest reforms. Beforehand, whereas there was some sharing of know-how and sources between Nio, Onvo, and its upcoming smaller model, Firefly, the groups primarily operated independently, resulting in potential useful resource duplication.
Nio is reportedly implementing cost-saving measures, and this variation extends to its manufacturers. In late February, Nio merged the supply channels of the Nio and Onvo manufacturers to optimize staff personnel and channel sources.
Shen Fei’s main focus can be on Onvo’s gross sales operations. He’ll not function the pinnacle of Nio Energy, though Qi Haijun, head of Nio’s roadside service heart, will proceed to report back to him. Qu Yu will now handle all Nio Energy operations, reporting on to William Li.
Shen Fei joined Nio in 2015 and has been instrumental in constructing Nio’s battery swapping infrastructure from the bottom up. Nonetheless, he has no prior expertise in car gross sales administration, making this transition a brand new problem.
There may be hypothesis that Nio intends to intently hyperlink its battery swapping know-how with Onvo’s gross sales, doubtlessly utilizing the swapping community as a key promoting level for the brand new model. Each Alan Ai and William Li have beforehand acknowledged that the presence of battery swapping stations can positively affect gross sales efficiency, with shops close to swapping stations displaying improved gross sales figures.
Nio goals to have its battery swapping community cowl all counties in China this 12 months, and Onvo is primarily concentrating on the mass market in third—and fourth-tier cities. Thus, Shen Fei’s appointment might doubtlessly profit from integrating the efforts of the swapping station community and Onvo dealerships.
Regardless of the brand new management construction, Onvo faces vital challenges in breaking by way of the aggressive EV market.
As of the tip of March, Onvo had established 450 shops. Whereas the gross sales community is principally in place, Onvo’s gross sales haven’t saved tempo. Within the first three months of this 12 months, Onvo delivered 5,912 models in January, 4,049 in February, and 4,820 in March—figures that fell in need of inside targets and have been a direct consider Alan Ai’s departure.
In a earlier interview, Ai attributed the slower-than-expected gross sales to inadequate model consciousness, stating that many potential prospects have been unfamiliar with the Onvo model. He emphasised the necessity for better model recognition to generate client curiosity and consideration.
Whereas Onvo applied a number of initiatives across the Chinese language New 12 months to spice up model consciousness, the March supply numbers counsel that this problem has not but been absolutely overcome, which might proceed to affect the model’s efficiency.
Onvo is anticipated to launch two new fashions this 12 months: the L90, a big three-row flagship SUV anticipated to debut on the Shanghai Auto Present with deliveries anticipated within the third quarter, and the L80, a sizeable five-seat SUV slated for supply within the fourth quarter.
This 12 months is essential for Nio, with all three manufacturers (Nio, Onvo, and Firefly) launching new merchandise. Nonetheless, the first stress for quantity development rests on Onvo. The Nio model itself will see updates to its present “5566” fashions (ET5, ET5T, ES6, EC6) in 2025, together with the launch of the high-end ET9 (priced above RMB 750,000, or 108,000 USD) and one other new mannequin within the fourth quarter, suggesting restricted quantity will increase from the main Nio model. The Firefly model’s first mannequin is ready to launch in April, however its design has already generated controversy, and the small, premium automotive section just isn’t significantly in style within the Chinese language market.
William Li anticipates that launching 9 new fashions throughout the three manufacturers will drive vital gross sales development for Nio, with a goal of doubling final 12 months’s deliveries to achieve 440,000 models in 2025.
The Onvo L60’s underperformance is clear, making the upcoming L90 essential for the model’s success. Nonetheless, each fashions will compete in extremely aggressive segments. The L60 will face rivals such because the up to date Tesla Mannequin Y, Zeekr 007, and Xiaomi SU7, whereas the L90 will compete with the Aito M8 and Li Auto L8.
“If Nio has just one purpose this 12 months, it’s to realize profitability within the fourth quarter,” William Li has publicly acknowledged. This can be a essential endeavor for Nio, with little room for additional missteps for both the Nio or Onvo manufacturers.
Onvo missed the chance to capitalize on its preliminary robust launch and the window for establishing a robust market place. The model’s struggles have impacted Nio’s total efficiency. Within the face of those adjustments at Nio, William Li is reportedly taking a extra assertive method, and Alan Ai’s departure marks a comparatively uncommon public resignation of a VP-level government inside the firm.
