The Daily Telegraph - Saturday - Saturday
Look to the east for the next level of customer care
Fledgling Chinese manufacturer Nio is redefining the ownership experience with its service-based business, says James Foxall
Imagine a small stadium venue in a Shanghai suburb. Crowds pour through the doors. They could be flocking to cheer a midsized band, or be barracked by a big-name comedian, or watch boxers pummel each other senseless. On this Saturday evening, however, the attraction is the CEO of a car company. But this is no grizzled North
American executive in a sharp suit. This is William Li, frequently called the Elon Musk of China after Tesla’s mercurial visionary.
Li’s company is Nio. It launched its first car, a premium seven-seat electric SUV, in the summer of 2018. By the end of the year it had delivered 10,000 of these ES8s. With 8,000 employees worldwide, Nio is headquartered in Shanghai but has factories and facilities all over China. Its design and engineering centre is based in Munich; its advanced technology operation in San
Jose, California; and its highperformance programme runs from the UK. Last September it was launched on the New York Stock Exchange and the company is currently valued at £6.1billion.
Nio is clearly more than a dream, but why does it resonate so much? It’s hard to imagine 10,000 people giving up their Saturday night to watch Jaguar Land Rover’s CEO hold court, his forthright views on the potential problems for the car industry caused by Brexit notwithstanding. But then it’s also difficult to envisage Ralf Speth spending up to two hours a day talking to customers via a mobile phone app, responding to queries, comments and even complaints.
Li, whose background is digital marketing, doesn’t do this because he has to. He wants to understand his customers, know what they want in the future, predict how motoring is going to change, sell them cars, and crucially profit from the digital addenda that will go with motoring in the future.
A slim, neatly dressed, well-groomed 43-year-old, Li hopes to revolutionise motoring. “We want to redefine what service means for a premium car company,” he stresses. “Traditional companies can make a car but it’s difficult for them to provide the service and ownership experience that their customers really want.”
Nio does this via its app. It might have only sold 10,000 cars thus far but its app has 670,000 users, many more than any other Chinese car company. Customers use this to book servicing or repairs. Someone then comes and takes their car to a service centre. “It works brilliantly,” says Jenny Tsen, whose husband Jack purchased an ES8. “It has changed how I think about our car.”
Where the app really clever is by rewarding users with points. They then redeem these with Nio. Tickets for the stadium event, for example, were “bought” through points.
Customers also is get access to any of the countrywide network of Nio Houses, its replacement for the traditional dealership. Of course, these have a floor where people can poke around cars. But there’s also a café, meeting spaces, a library and even a crèche. And customers really use them. “If you want to meet someone in the city they’re perfect,” claims owner Chen Ziguang.
The entrepreneur, nicknamed “Sunny”, also uses Nio’s battery swap system. This is unique to Nio and features the 70 kWh lithium-ion cells slung beneath the car. When out and about with range running low, you visit a swap station. These are pop-ups, taking up the space of three parking bays. The car is hydraulically hiked off the ground, an automatic trolley appears and undoes the 10 bolts that fasten the battery. The 500kg exhausted battery is then whisked away and replaced with a fully charged one. The car is dropped back down and checked to ensure it’s in full working order. The process takes about five minutes in all.
“I drive from Henan to Guangdong (about 800 miles) and do four battery swaps. There have been teething troubles but it usually works very well,” Sunny reveals. “I once drove the car from Beijing to Shajing and back (about 2,800 miles) and swapped the battery 16 times! It’s great being able to drive that far with zero emissions.”
Like all other Nio owners, Sunny drives an ES8. Considering the reputation Chinese cars have for shoddy build quality and poor safety, the ES8 is a revelation. Panel gaps are tight. Cheapfeeling plastics at the bottom of the doors and in the boot aside, the interior has Volvo levels of premium-ness.
The 650hp motor gives a neckstraining 0-60mph time of 4.4 seconds. The structure and body are 96.4 per cent aluminium, making this SUV a relatively svelte 2.5 tons. The use of aviation-grade aluminium lets Nio’s German engineers claim this will be a Euro NCAP five-star car when it comes to Europe. And there are plans to bring it here within five years.
Nio has sensibly chosen to eschew unknown Chinese suppliers and source components such as brakes and air suspension from trusted European companies such as Brembo and Continental respectively. The ES8 is priced at £51,500 in China – about two thirds the cost of a Tesla Model X – and Nio is adamant that it won’t discount models to stimulate sales. Instead, rather as we upgrade our personal computers, it will offer modifications to owners. Its vice-president of user development Izzy Zhu says: “We are planning to enable existing users to upgrade to a better battery this year.”
That word “user” is important. In the future, Nio believes we won’t just buy our cars on finance, we’ll probably rent them only when we need them. Manufacturers such as Nio will profit by pairing with service companies to