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JLS

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Alias Born 12/14/2004

JLS

Re: JohnSamuel post# 11264

Thursday, 02/13/2020 2:34:01 PM

Thursday, February 13, 2020 2:34:01 PM

Post# of 22053
Fine;

Tradition is what it is. I don't have any problem with that.

The problem remains that NIO does not have a profitable business model. Every car sold is sold at a loss. The more they sell, the greater the loss, as the quantities are at the point of diminishing returns (assuming you know what that means). The determining factor is that NIO cannot do their own manufacturing. Without that, NIO's business model is broken.

At the current volume of NIO auto production, and with NIO not having their own manufacturing facility, increases in sales has no more leverage in terms of being able to lower the cost of production.

IF NIO could have its own manufacturing facility, their cost of production would be lower (as they would not be spending money to sub-contract car production), and they could then probably make a profit. But it is not in their plan to build such a facility. Without that, NIO cannot win.

NIO's business model, as it is, is broken -- period.

I'll make a suggestion: India has auto production facilities, as does South Korea and other Asian countries. Perhaps NIO should seek to obtain competitive bids to manufacture NIO's cars from all auto manufacturers in all Asian countries (which would also include China). In exchange, NIO gives a percentage ownership of NIO to the winning manufacturing company with no special consideration given to which country or which company wins the bid; and because of that, NIO no longer pays for manufacturing. In other words, NIO becomes a multi-country company partially owned by NIO and partially owned by the winning auto manufacturing company.
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