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Who Is Li Bin?

May 13, 2018 by A. Alfaro
Who Is Li Bin?

Li Bin (William Li), founder of the electric vehicle start-up, NIO is already a major player in the car industry and is expected to become even more influential thanks to his smart strategy.

Li Bin is often known in China as "the godfather" of the car industry. Born in 1974 and graduated from Peking University, he founded Bitauto in 2000. Bitauto is a provider of Internet content and marketing services for China's automotive industry. It is listed on the American Stock Exchange and is valued at over USD 1 billion. It now employs more than 3,000 people and covers 340 cities in China. He is also the founder, chairman and CEO of NIO, founded in 2014, and is often called "the Chinese Tesla".

At the end of April, he joined the ride-sharing service platform Dida Chuxing as its chairman. He is also a major investor in the bike-sharing platform Mobike and has invested in more than 40 companies in the automobile industry.

With such a CV, it is understandable that he has an excellent reputation in the industry. He became an entrepreneur in 1996 and has witnessed the growth of Internet in China almost since the beginning. In 2010, he was inspired by Lei Jun, founder of Xiaomi, who was trying to transform an Internet company into a hardware company.

Emulating the same, he wished to replicate Xiaomi’s business model with cars. But a car is not a phone; it is much more difficult to produce. Mistakes are unaffordable during car production. If a Xiaomi phone system has a bug, it is relatively easy to fix. But if anything goes wrong during the production of cars, people’s safety can be compromised. That is why Li Bin said that he would need at least USD 3 billion to produce a car. Although NIO has not started mass production yet, it has managed to raise approximately USD 160 million.

According to the Chinese portal 36ke, NIO is planning an IPO later this year. It is not clear yet whether the IPO will be successful, considering that NIO has not yet started mass production and is not yet profitable. NIO’s first mass produced model will be the ES8, with an estimated price of USD 70,000 and could become a serious competitor for Audi, BMW, Mercedes and other big brands.

Li Bin knows it is difficult to compete against such powerful companies. He will have to spend a lot of money to attract the best engineers and create a reliable brand. Also, there is some risk involved. After all, Internet companies are not that experienced when it comes to car manufacturing. NIO should be prepared for some product-recall crisis in the future.

Lei Jun’s was the first door Li Bin knocked on when he was trying to raise money. In 2014, Xiaomi was at its apex and Lei Jun had already met with many car manufacturers. Li Bin wanted to convince him to invest in NIO and hopefully make him give up on the idea of developing his own car brand. He hoped to transform Lei Jun into an ally rather than a potential competitor.

Li Bin also convinced Li Xiang, founder of the Chinese electric vehicle start-up, CHJ Automotive to invest in NIO. Like many other Chinese entrepreneurs, Li Bin also turned to BAT (Baidu, Alibaba and Tencent) for funding. But he was cautious as he was not willing to take too much money from them. He wanted NIO to be independent of BAT. In the end, he was able to raise money from Ma Huateng (Tencent), Liu Qiangdong (JD), Hillhouse Capital Group, Li Xiang and Lei Jun.

Now, NIO has 56 investors, including Lenovo, TPG, China Merchants Bank, China Industrial Bank and many other big names. One of Li Bin’s best skills is to be able to take money from investors in a prudent fashion. He has managed to remain in control of the company and has not allowed any investor to become too powerful. Not only that, he has made them feel allies. For many years, he has surrounded himself with the same powerful investors and has carefully built a good reputation. His wife said to 36ke that Li Bin is really good at turning enemies into friends. “He never blacklists anyone, he is always willing to sit down and talk to anyone”, she said.

Li Bin started designing NIO’s future after covering as a reporter for Bitauto, the Frankfurt and London car shows. He had the chance to interview high profile people within the industry. Little did they know that the reporter interviewing them was the founder of a company listed on the New York Stock Exchange.

In the early days of NIO, Lei Jun warned Li Bin about the difficulties in gathering a good team. Li Bin traveled to 17 different countries and interviewed hundreds of people for different jobs. He established research development centers in the UK, Germany and the US. Today the team has 5,500 people from 40 different countries, creating a globalized company.

To overcome language barriers, he had set up a simultaneous interpretation system similar to the one used at the UN, at NEO’s Shanghai headquarters. Although the team has been successful and the company has grown rapidly, some people within the industry still have doubts about NIO. After all, NIO has to start a car company from scratch.

NIO has teamed up with JAC Motors, which will be NIO’s main manufacturer, provider of aluminum and world-class components. But manufacturing a car is more than putting together top-notch pieces and components. JAC Motors does not have experience when it comes to manufacturing a whole car. We should not underestimate the complexity of the auto supply chain management. But then, Tesla had also faced the same problems in the past.

According to people who have worked with him, Li Bin is extremely hardworking. He is constantly traveling between Shanghai and Beijing and during his business trips, there is almost no resting time. Hi family has to force him to take vacations.

Li Bin is a man willing to take risks. Against the advice of his engineers, he insisted that the ES8 model had to reach 100 km/h in 4 seconds, equivalent to a Ferrari. For Li Bin, high performance is the essence of NIO. Because the battery system still has some weak points at this stage, Li Bin thinks NIO should excel in whatever it can excel now. With enough investment, the ES8 model can reach 100 km/h in 4 seconds. It does not matter that the average driver will never experience this feature. Tesla achieved 100 km/h in 4 seconds, so NIO must do it too.

Another of Li Bin’s gambles is NIO’s approach to swappable batteries. He thinks this improves user experience. But, Tesla had also considered this and had to finally give up. Renault’s CEO declared that “swappable batteries is a dead end”. In the swappable batteries model, the driver replaces his car’s battery with a fully charged one. This significantly raises costs.

An Israeli company called Better Place was a pioneer in this field but it went bankrupt in 2013. Li Bin interviewed one of the company’s investors who said that the reason for their failure was that technology was not rooted in user experience.

Li Bin declared to 36ke that he does not seek validation from material things. He does not own a house, he rents a house around Guomao (Beijing’s CBD). Friends say he does not care if a bottle of wine is USD 60 or USD 600. Also, he is not known to have any hobbies. Even if he did, he would not have time for that. He hopes to always keep an entrepreneurial attitude. He now rates NIO’s likelihood of success at 51%.

A. Alfaro

A. Alfaro is a Beijing-based freelance reporter. He focuses on China's politics, culture and society. He can be reached at varofaro@gmail.com. 

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