What does a car manufacturing base that is "better than a Porsche factory" look like in the eyes of Li Bin, founder and CEO of NIO?
"AVG cars shuttle in a busy and orderly manner in the factory, transporting parts back and forth", "8 robots surround the car body, and in less than 50 seconds, two car doors are firmly installed on the car body", "the robot arm replaces the engineer to install the center console inside the car body, which takes only a few seconds"
This is the "future" scene that the reporter saw at NIO's Second Advanced Manufacturing Base (referred to as NIO F2 Factory). Recently, reporters conducted on-site visits to this new energy vehicle manufacturing base, and the factory is less than 2 kilometers away from Hefei Xinqiao International Airport in a straight line. Several models under NIO, including ET5, ET5T, ES8, etc., are assembled and produced here.
In fact, this factory has extraordinary significance for NIO. It has officially brought NIO the qualification for car manufacturing, allowing NIO to remove the four words "Jianghuai Automobile" from the rear of each model. Jianghuai Manufacturing is about to become NIO's past tense.
From now on, I have the qualification to make cars
Move the time back to over a month ago. On December 5, 2023, Jianghuai Automobile announced a change of ownership of its three asset packages. NIO has become the transferee of the first and third asset packages.
One package of assets involves inventory, fixed assets, and construction in progress of the three factories of the passenger car company; The three guarantees of assets involve the structures and equipment of the passenger car company's Xinqiao factory.
According to public information, the three factories mentioned above are NIO Hefei Advanced Manufacturing Base (referred to as NIO F1 Factory), while the Xinqiao Factory is NIO's second advanced manufacturing base, namely NIO F2 Factory. The former has a transaction price of approximately 1.666 billion yuan, while the latter has a transaction price of approximately 1.492 billion yuan, totaling approximately 3.158 billion yuan. At present, all NIO products are produced from the above two factories.
The NIO F2 factory is also the destination of the reporter's actual exploration.
Interestingly, just one day before the disclosure of the above announcement, on December 4th, NIO's name appeared in the "Vehicle Production Enterprise Credit Information Management System" of the Ministry of Industry and Information Technology. The legal representative was Qin Lihong, and the production address was located at 299 Baita Road, Hefei Economic and Technological Development Zone, Anhui Province, which is exactly where NIO's F2 factory is located.
This also means that after acquiring F1 and F2 factories, coupled with being listed in the vehicle production enterprise directory of the Ministry of Industry and Information Technology, NIO officially has the ability to rely on itself and can announce its departure from the "OEM" model.
In the early stages of cooperation between NIO and Jianghuai, the market was not optimistic about this cooperation. But Li Bin was very firm in this decision and responded to the questioning by saying that "Porsche's factories are not as good as Jianghuai's factories.". The market is therefore curious about factories in Jianghuai.
So, what kind of black technology does the manufacturing base that "surpasses Porsche factories" in Li Bin's mind have? What old "shackles" can we break through?
In fact, Ford pioneered the traditional automotive production line, which operates in a streamlined manner, immediately transitioning from one process to the next. This can maximize process and time savings, and assembly lines have since become a common practice in large-scale industrial manufacturing.
However, automobile production may become more complex, and pure assembly lines may not meet the optimal efficiency of all production processes. Therefore, this model is constantly evolving in actual production.
After the reporter walked into the F2 factory, a huge NIO HOUSE appeared in front of him. Within NIO HOUSE, a corridor bridge connects the factory that is truly used for the production of vehicles. At the end of the corridor bridge, a six story "three-dimensional garage" that stands several tens of meters tall first catches the eye.
Through this "three-dimensional garage", NIO showcases to the outside world how car production ensures efficiency in a more complex product portfolio. This "three-dimensional garage" is actually a platform for accessing the vehicle body, connecting three workshops: painting, final assembly, and stamping. NIO refers to it as the "Rubik's Cube".
When the painting or final assembly workshop needs a car body, the robot will grab it out like a "claw doll" and quickly send it to the destination, completing a series of actions in less than 50 seconds. The entire Rubik's Cube can accommodate over 700 vehicle bodies in total.
It should be noted that according to official data provided by NIO, there are over 3.59 million personalized configuration combinations for the 8 models currently on sale. So many combinations were initially screened and allocated in this "Rubik's Cube". And throughout the entire process, no one needs to intervene.
Fully automated breaking free from "confinement"
According to the reporter's observation, there are still many unmanned areas in the entire factory. Especially different from the traditional vehicle assembly process, NIO's final assembly process does not require a lot of manual operation. The efficiency brought by robot intervention can be seen everywhere on the assembly line of its final assembly workshop.
Taking the installation of front and rear car doors as an example, throughout the entire process, the AVG car shuttles through the factory, delivering the required materials, such as the vehicle body, doors, hinges, etc., to the side of the robotic arm. Subsequently, the 8 robotic arms will cooperate with each other to complete the installation of the car door, and even simulate manual installation of hinges inside the car door, with the entire process taking about 50 seconds to complete.
During the visit, the reporter's biggest impression was that multiple robots in the workshop worked together to achieve high intelligence production. According to the staff, the entire F2 factory body workshop is equipped with 756 robots, achieving 100% automation.
It is worth mentioning that in addition to the traditional assembly line mode, NIO has also set up several dedicated work areas next to the assembly line in the final assembly workshop, which are used to assemble different accessories, such as tailgate, dashboard, front and rear windshields, canopy, etc. The vehicle body is transported out of the assembly line by AGV cars, and after assembling these components, they are transported back to the water line.
Because they are separated from the assembly line and operate smoothly, these work areas are called "enclaves".
This independent operation mode is similar to the "independent operation island" concept in Toyota's lean production, but with different implementation methods and operation modules: a typical independent operation island assembles a complete set of component families using the same machine tool, while NIO's "enclave" uses robotic arms to automate the assembly of components.
For example, during the installation of the center console, traditional factories require engineers to manually install it, but NIO uses a robotic arm that simulates human hands to achieve installation, which only takes about 14 seconds.
A NIO engineer described personalized "enclaves" in large-scale production as transforming the original "single lane" into a three-dimensional "overpass system", completing personalized configuration of vehicles. In his opinion, arranging some processes on the branch line will not affect the normal operation of the entire assembly line.
In his view, if all processes are connected together, the mutual influence between different process modules will be significant, such as operating rates and process characteristics.
It should be noted that in the early stages of production, Tesla Model 3 was once trapped in a "production capacity hell" due to a large investment in robot automation production lines. Later, Musk agreed to re add the necessary manual assembly to make the production line run quickly again.
Therefore, separating the "enclave" design from the assembly line can greatly avoid a single process affecting the overall rhythm. Currently, it seems that this is also a breakthrough for NIO in the traditional automotive manufacturing process.
As mentioned earlier, the NIO 8 models have a combination of over 3.59 million vehicles, and the degree of vehicle customization is clearly higher than that of competitors such as Tesla and Ideal. This product strategy can indeed meet the refined needs of different users, but it will also bring challenges to large-scale industrial manufacturing.
Therefore, this is also NIO's response to its complex product portfolio.
What will be the cost reduction effect?
During the exploration of the F2 factory, the reporter also observed that in the entire Hefei Xinqiao Intelligent Electric Vehicle Industrial Park, in addition to the automobile production workshop, there are also 10 major component suppliers in the park. Including Andaotuo, Lear seats, and Shangsheng Electronics, all of which are NIO's supply partners.
After these suppliers produce tires, seats, and other components, they can be transported to the final assembly workshop through an air transportation corridor with NIO factories. According to NIO, this type of machine transportation chain delivery saves 400 yuan/vehicle in single vehicle logistics costs compared to traditional logistics models.
Moreover, this not only saves transportation costs, but also allows components to enter the production line faster, greatly compressing the production and manufacturing time of the entire vehicle. According to the reporter's understanding, it only takes 14 days for the NIO F2 factory to complete the entire process from the moment the user places an order to the official offline of the vehicle.
According to the plan, a battery factory will also be built around the NIO F2 factory. The transportation cost of batteries is very high, and after the battery factory is built, it can also be transported into the factory, greatly reducing transportation costs.
For cost reduction, NIO F2 factory is also reflected in green energy. As is well known, new energy vehicles are closely related to environmental protection and energy conservation, but automobile production usually consumes a large amount of energy.
In order to solve this problem, NIO F2 factory has built a distributed photovoltaic power station, achieving spontaneous self use and surplus electricity grid connection. This not only reduces carbon dioxide emissions, but also covers 25% of the electricity required for factory production.
According to data disclosed by NIO, from January to September 2023, the F2 factory contributed 40.79 million kilowatt hours of photovoltaic power generation, with an average daily power generation of 150000 kilowatt hours, equivalent to the annual electricity consumption of 17000 urban households (calculated at 200 kilowatt hours per household per month).
With such a factory, NIO will completely bid farewell to the OEM model, and "Jianghuai Manufacturing" has become a thing of the past. Correspondingly, NIO has also paid a considerable price of over 3.1 billion yuan (the total consideration for F1 and F2 factories). What kind of effect will this move bring to NIO next?
Li Bin once revealed at the 2023 Q3 performance meeting, "From a manufacturing perspective, if NIO's cars were entirely self manufactured, manufacturing costs would decrease by 10%."
After all, in the past, NIO had paid a considerable amount of expenses for contract manufacturing. According to NIO's 2022 annual report, for the years ended December 31, 2020, 2021, and 2022, NIO paid monthly production costs to JAC Motor for each vehicle. According to the annual report, as of December 31, 2020, 2021, and 2022, the total amount of expenses paid to JAC Motors was RMB 532 million, RMB 715 million, and RMB 1.127 billion, respectively.
Next, in the increasingly fierce competition of the new energy vehicle market, it remains to be seen how NIO, bidding farewell to the OEM model, will perform. We can wait and see.