NIO Inc. (NYSE: NIO) stock is in the limelight after CEO William Li announced the development of the second-gen Nio phone.
During a recent Nio vehicle event, CEO William Li announced that the second-generation Nio phone has completed its development phase and is poised to commence production.
Nio first ventured into the smartphone market with the launch of its inaugural device in September, which garnered attention for its integration with Nio vehicles. Priced between $890 and $1,030 depending on storage and RAM configurations, the smartphone emphasized connectivity features, allowing users to remotely control various vehicle functions, such as temperature settings and door locks.
Li disclosed at the gathering that Nio intends to stick to an annual smartphone release schedule. Considering the timing of the previous launch, industry observers expect the release of the second-generation Nio phone within the coming months.
CEO William Li Comments on Second Generation Nio Phone
Last week, CNEVPost revealed that Nio is offering complimentary first-gen phones to buyers of its 2024 vehicles until the end of the current month. This initiative aims to boost vehicle sales amidst intense price competition and market rivalry.
In the meantime, some NIO shareholders question the effectiveness of allocating capital towards Nio’s expansion into the mobile device sector. In addition, Nio continues to face financial challenges, as evidenced by its reported net loss of $2.981 billion in 2023, coupled with decreasing vehicle and gross margins. Moreover, given the formidable competition from established smartphone giants, the EV company seems unlikely to succeed in this field.
However, Li perceives the Nio phone as a “defensive strategy” against its competitors.
Li said,
“If a potential customer asks a salesperson in a store: Huawei’s cars can connect with phones, can yours do that? How do you think our Fellow should answer?”
Details regarding the second-generation Nio phone remain limited. The initial model featured an Android-based operating system powered by a Qualcomm (NASDAQ: QCOM) Snapdragon processor and included an action button that provided access to over 30 vehicle control functions.
The Nio phone, according to Li, is a strategic addition to the product line of Nio, providing a competitive advantage and a safeguard against rivals. The sales figures for the first-generation phones remain undisclosed.
NIO (NYSE: NIO) Stock Movement
NIO stock dropped 0.72% to close at $5.54 on Monday. The traders had exchanged hands with 48,317,980 (48.31 million) shares compared to the average daily trading volume of 62.87 million.
