SMU108: NIO Battles Tesla with Battery as a Service

SMU108
This case was written by Professor Shantanu Bhattacharya and
Lipika Bhattacharya at the Singapore Management University.
The case was prepared solely to provide material for class
discussion. The authors do not intend to illustrate either
effective
or ineffective handling of a managerial situation. The authors
may have disguised certain names and other identifying
information to protect confidentiality.
Copyright © 2021, Singapore Management University Version:
2021-12-12
NIO: BATTLING TESLA WITH BATTERY AS A SERVICE
“Buying is a profound pleasure” were the wise words of Simone
de Beauvoir, the noted existentialist

author, on the salutary effects of material acquisitions on the
human psyche.1 While they were
spoken more than half a century ago, the impact of acquisitions
on consumer utility remained relevant,
but with a caveat. A research report had found that while
consumers had the same adrenaline rush
from material acquisitions, the methods of acquisition had
changed.2 Over the last two decades,
consumers had been reducing their purchase of physical goods
as a percentage of their total
household expenditure, and instead, spending more on services
and experiences. They preferred to
access physical goods on a needs basis, in a shorter timeframe.
There was a similar trend in the B2B
sector as well; businesses had been lowering the share of
illiquid assets like property, plants, and
equipment as a fraction of their assets, and outsourcing more
activities. 3 Was this change in
consumer preferences permanent or transient? Could firms offer
their products using alternative
means (for instance, as a service) to take advantage of this
change? NIO’s CEO and founder, William
Li, was likely betting that the change in consumer preferences
was indeed permanent.

On August 9, 2021, NIO shares rebounded 3.1% to reclaim the
50-day and 200-day moving average
indicators after a 16% fall in stock price the previous month. 4
NIO was one of the strongest
competitors of Tesla in the electric vehicle (EV) market in
China. While 100% of the firm’s sales
came from China, it had plans to expand globally in the near
future.5 Many investors and stock
analysts in the market were closely watching NIO to see if it
could mirror the path Tesla had taken
to become a strong global competitor. While Tesla was the clear
leader across all markets in the EV
sector, the competition was intense, and NIO had launched
battery-as-a-service (BaaS) as its unique
selling point to attract consumers and compete against rivals. In
a press release, William Li had stated,
“We believe products and technology must change along with
the way people use them and their
entire ownership experience. We want consumers to feel
optimistic about owning a car.”6
NIO had launched BaaS in 2020 to offer battery charging and
swapping services to EV owners for a

small monthly subscription fee. BaaS users could buy a NIO car
without the battery, resulting in
savings of more than US$10,834 (CNY 70,000)7 on all NIO
models.8 This brought the EV to a
similar price bracket as fuel-run cars, making it attractive to a
wider range of consumers. It also
improved NIO’s price competitiveness against larger EV
manufacturers like Tesla in the cutthroat
market.9 Moreover, it allowed the firm to enjoy the subsidies
that had been extended by the Chinese
authorities in April 2020 to EVs priced below US$46,400 (CNY
300,000) if they supported battery
swapping. 10 The Chinese government had offered these
subsidies with the stated intention of
accelerating the move from fossil fuel vehicles to EVs.
EVs were an important element of the strategy in the
transportation sector to act on climate change
and contribute towards a circular economy. They offered a more
environment friendly and
sustainable way of life to consumers, and NIO and Tesla were
leading the way in producing next
For the exclusive use of c. tian, 2022.
This document is authorized for use only by caixuan tian in

AD715 2022 taught by VLADIMIR ZLATEV, Boston University
from Jun 2022 to Dec 2022.
SMU-21-0033 NIO: Battery as a Service
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generation EVs. There was also an increasing push from
environmental agencies to allow used
batteries from EVs to be reused for other projects (like home
solar) to extend their shelf life, and only
discarding them once their full usage capabilities had been
extracted.11 Hence, the BaaS service was
seen as an effective solution to combat the environmental
impact of batteries. Individual car owners
did not own and dispose the batteries; instead, the vehicle
manufacturer would retain the batteries for
reuse and disposal. Managing the usage of batteries at an
organisational level ensured that batteries
could be reused in a more environment friendly manner. BaaS
was also useful to the consumers living
in smaller houses/apartments where they did not have the
infrastructure to charge their cars.12

However, setting up the infrastructure to support BaaS (i.e.
charging and swapping stations at various
locations) was an expensive affair.13 Moreover, these stations
could be used for charging only NIO
cars and not other EVs. Besides, the technology for batteries
had improved to the extent that they
could last longer in terms of miles travelled based on a single
charge, reducing the need for frequent
recharge/swaps at charging/swapping stations. Given the
scenario, was NIO’s BaaS venture a
sustainable business model? Could it provide the company with
a strong competitive advantage?
Climate Change, Electric Vehicles and the Circular Economy
EVs had seen growth primarily because of the climate change
agenda, which had been a topic of
international discussions for the last two decades. A global
panel on climate change had forecasted a
temperature rise of 2.5 to 10 degrees Fahrenheit over the next
century due to global carbon emissions
with transport accounting for around one-fifth of the total
emissions.14 Road transport accounted for

three-quarters of those emissions, i.e., 15% of the total carbon
dioxide (CO2) emissions globally.15
EVs were perceived as a reliable solution towards reducing road
transport emissions, as they did not
directly use fossil fuels and other carbon emitting sources of
energy.16
While EVs had been around for decades, it was only in the early
2000s that governments and
automakers started promoting them as a key technology to curb
oil use and fight climate change.17
Subsequently, demand for EVs started to grow, and in 2010, the
first modern, all electric, five-door
family hatchback EV (Nissan Leaf) was launched by Nissan for
the mass market.18
Over the next decade, many start-ups that specialised in
manufacturing EVs emerged, and Tesla soon
became the market leader for the growing EV market. Many
large auto manufacturers also entered
the EV market and launched new all-electric models in several
consumer categories.19
EV sales increased from 17,000 in 2010 to 2.1 million by 2019,
with China accounting for 47% of

the global sales.20 The global EV market was expected to grow
to 125 million vehicles by 2030
(refer to Exhibit 1 for Global EV Growth).21 Many traditional
auto manufacturers had started to
focus purely on EV models and halt traditional car
manufacturing for the future. For example,
General Motors had set targets to stop selling new gasoline-
powered cars and light trucks by 2035;
Volvo had decided to pivot to a hybrid and all-electric line-up
by 2030.22 23
However, while EVs were expected to reduce the climate impact
and pollution problems of transport,
many of the materials used in the batteries were toxic and
rare.24 In fact, by 2025, 250,000 metric
tons of EV lithium-ion batteries were expected to reach end-of-
life for vehicles.25 However, despite
being non-usable for vehicles, these batteries could still retain
70–80% capacity and could potentially
be used for other purposes.26 Finding a second life for disposed
batteries was essential for making
EVs sustainable.27 Reusing batteries from EVs could slow
down the resource cycle by extending
their life through recycling.28 Extending the battery life cycle

was therefore a crucial aspect in
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improving EVs contribution to overall sustainable development
and circular economy. Notably,
capturing the value left in a product after use was the
cornerstone of a circular economy.
However, EV consumers were mostly individuals and taxi
companies that had little incentive to
recycle the batteries. Besides, conducting such recycling
activities for end consumers was a headache
for manufacturing companies and entailed cumbersome tracking
and collaborations with multiple
collection, servicing and recycling agencies. In 2020, it was
estimated that only 5% of EV batteries

were recycled globally.29 Governments had taken note of this
problem, and regulated manufacturing
companies to ensure the sustainability of their products.30
Many EV companies had come up with different strategies to
tackle the battery problem. Nissan, for
example, was reusing old batteries from its Leaf cars in
automated guided vehicles used to deliver
parts to workers in its factories.31 Volkswagen had a similar
approach; it opened a recycling plant in
Salzgitter, Germany, to recycle up to 3,600 battery systems per
year. 32 A research study
had concluded that lithium-ion batteries could have a profitable
second life as backup storage for
grid-scale solar photovoltaic installations, where they could
operate for a decade or more in a less-
demanding role.33
Nissan and Renault had also started reusing batteries to serve
the household energy storage market,
with solar panels in the UK as their core customer segment.34
Many third-party entrepreneurs had
established second life battery businesses; for example, energy
control solution company Relectrify

in Australia had introduced battery management systems to
squeeze more value out of used batteries
and facilitate the transition of batteries into a second life in
residential solar storage.35
However, while technology solutions for battery reuse were
advancing, economic and regulatory
aspects did not yet provide sufficient infrastructure, framework
and incentives for efficient battery
cycles (refer to Exhibit 2 for further details on the Circular EV
Value Chain).36 As of 2021, the
global capacity of recycling EV batteries stood at 180,000
metric tonnes while in comparison, just
the number of EV’s introduced on the road in 2019 could
generate 500,000 metric tonnes of battery
waste. Thus, it was evident that battery waste posed a
significant climate risk, which could dampen
the circular economy benefits of EVs in the long run.37
The EV market in China
China was the world’s largest EV market by demand and sales
volume in 2020, constituting 41% of
all EVs sold worldwide.38 The country had tried to promote

EVs to consumers in small and large
cities, with the aim of reaching its carbon emission peak before
2030 and achieving carbon neutrality
by 2060.39 EV sales in China were mostly concentrated in large
cities with over five million residents,
like Shanghai and Beijing.40
The Chinese government had tried to promote EVs since 2009
by offering subsidies, tax waivers,
and charging points to encourage manufacturers and consumers.
It had also implemented other
measures like licensing policies to limit the number of petrol
cars on roads using a car plate lottery
system, with winning rates as low as 1% or below, thereby
forcing consumers to switch to EVs.41
However, consumers (especially in smaller cities) were still not
keen, primarily because of EV’s
higher costs compared to traditional vehicles.42 The price of a
standard five seater fuel based top-
tier car was about US$ 34,150 (Nissan Altima)43; whereas the
price of an EV was more than double
that amount (Tesla Model X for example was around US$
89,900)44.

Demand for cars in China was on the rise and analysts had
predicted that over 70% of new car sales
(including EVs) globally would come from China by 2030.45
Chinese buyers were big fans of SUVs,
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especially of models from global luxury brands like Mercedes,
BMW, and Audi. Tesla was the
undisputed market leader of the EV market in China, focusing
on mass market and luxury cars, and
accounted for about 51% of the EV sales in early 2020.46 NIO
accounted for 16% of market sales in
the same period and focused on luxury cars. The bestseller in
the market, however, was Hongguang
Mini EV (a micro car built by a local manufacturer), which sold
about 270,000 units in 2020.47

The EV market in China had mainly flourished because of
government subsidies that enabled local
original export manufacturers (OEMs) to sell EVs at affordable
prices. However, EV sales had
plunged after the Chinese government cut subsidies by up to
50% in June 2020. The overall sales of
new energy vehicles (including EVs) in China had dropped by
7% year-on-year after these subsidy
cuts, marking the first fall in this market after more than two
years.48
However, despite the pullback of subsidies, the China EV
market had managed to regain its surge by
early 2021. Analysts predicted that the country would continue
to maintain its leading market
position for the next decade.49 EV sales in the country were
driven by government policy and
increased consumer demand, as EV prices continued to decline
while its quality continued to improve.
Analysts believed that Chinese producers would start to target
international buyers in the coming
years, given that they already had a head start on manufacturing
at scale over the West and that

government subsidies to the industry were starting to decline.50
NIO
NIO was founded by Chinese entrepreneur William Li in
Shanghai, in November 2014. Hailing from
a low-income family in a rural province in eastern China, Li had
humble beginnings.51 He grew up
in the mountains with his grandparents and herded cattle as a
child. After graduating with a computer
science degree from Peking University, Li took on several part-
time jobs to support himself, before
venturing out as an entrepreneur. In 2000, he launched auto
information website Bitauto, which listed
its IPO in 2010 and raised US$127 million on the New York
Stock Exchange (NYSE).52
Li then went on to establish NIO in 2014, as he believed that
there was a growing opportunity for
new entrants in the EV sector. The company’s Chinese name
Wei Lai meant “Blue Sky Coming”,
and originated from a vision of a future filled with blue skies.
The company believed that improved
smart electric car technologies, coupled with better experience

of car ownership, could drive
increased appreciation and adoption of smart electric cars,
leading to a more sustainable future for
the planet. 53 NIO attracted many top-grade investors,
including Tencent, Temasek Holdings,
Sequoia, Lenovo and TPG.54
Li was often dubbed as the Elon Musk (Tesla’s founder) of
China. His company’s first EV product
was a sports car named EP9, which boasted of an attractive
design, high driving performance,
powerful acceleration, and state of the art technology.55 The
EP9 quickly gained popularity as a
premium car and motivated NIO to launch its first mass
manufactured model, ES8, in 2017. The ES8
was a 7-seater SUV aimed at the luxury automobile market. As
NIO did not have its own
manufacturing plant, it collaborated with state-owned auto
manufacturer Jianghuai Automobile
Group Co (JAC) to build the vehicles. By 2018, NIO had
captured 19% of the market in China.56
In September 2018, NIO went public and raised US$1.8 billion
from its IPO on NYSE.57 It then

launched another SUV model, the ES6, a five-seater high-
performance premium electric SUV. Soon
after, in December 2018, NIO launched a five-door, five-seater
crossover SUV ES9 with a sloping
rear section and the largest panoramic sunroof ‘in its class’
(refer to Exhibit 3 for NIO EV models).
User experience was key to NIO, as Li had shared,
https://www.reuters.com/article/us-china-autos/china-new-
energy-vehicle-sales-drop-for-first-time-in-over-two-years-
idUSKCN1V20F2
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The user experience is not only about the functional experience
of the car - like acceleration,
speed, and power, but also about the emotional experience. If
you want to redefine the industry

and the product, you must redefine the youth experience of the
industry. In all industries in the
future, user experience of a car brand should include four parts:
car parts, service, digital
touchpoint, and beyond its life, what the car will bring to
you.58
After a few successful years, NIO faced troubled times, in 2019,
when the Chinese government
started to pull back subsidies for EV manufacturers. Withdrawal
of subsidies, along with the
departure of a few key executive and vehicle recalls, hurt NIO’s
business dramatically, plummeting
investor confidence in the company. Shares dropped from an
IPO high of US$6.26 in 2018 to a low
of US$2 in 2019.59 Notably, NIO recalled nearly 5,000 of its
ES8 high-performance electric SUVs
after a series of battery fires in China, followed by a subsequent
investigation that revealed a
vulnerability in the car model that posed a safety risk.60
To cope with the difficulties, NIO sought additional funding,
and found a new lifeline when the local
government of Hefei agreed to invest US$1.08 billion (CNY 7

billion) in the company. Li
subsequently set up a joint venture manufacturing unit (with
state-controlled automaker JAC Motors)
at Hefei, the capital of Anhui province in China, in 2020. The
deal also involved the building of an
EV industry park, called NeoPark, in collaboration with the
Hefei government to produce one million
cars annually.61
Following its deal at Hefei, NIO gained renewed momentum and
quickly recovered from its business
slump in 2019. In the first quarter of 2021, vehicle sales at NIO
accounted for revenues of US$1.1
billion (CNY 7.4 billion), representing an increase of 490%
from the first quarter of 2020 and an
increase of 20% from the fourth quarter of 2020. 62 The
company also introduced strategies to
expand outside China to gain global market share and
established teams in the U.S. and Europe.63 Li
shared,
We are a global company. We have offices in Shanghai,
Munich, London, and Silicon Valley. We
targeted the China market first, but we intend to target other

global markets also. We have more
than 1,000 people outside China.64
In May 2021, NIO entered Norway, its first expansion overseas
since its inception. Norway was the
first country in the world to have higher sales of EVs compared
to traditionally powered vehicles. In
2020, EVs accounted for nearly 55% of all car sales in the
country.65 NIO’s strategy was to use
Norway as a springboard for its expansion into Europe – which
was the second largest market for
EVs globally following China. By 2022, NIO aimed to enter
five more European countries, to cater
to an estimated demand of 95,000 vehicles yearly. EVs were
supported by subsidies in the European
market to drive the region’s commitment to climate change and
NIO was hoping to tap on this support
to expand in the market. Establishing battery swapping stations
and offering BaaS services formed a
key part of NIO’s strategy in Europe, just as in China.66
Battery Swapping and BaaS

Battery swapping in the EV industry was not a new concept.
The industry had tried and tested several
ways of designing an effective solution for battery swapping to
overcome the high costs of charging
and replacing batteries. The first approach was introduced in
2007 by an Israeli start-up called Better
Place that allowed its customers to switch their batteries in a
fully automated station using a
membership card.67 In 2013, Tesla had introduced a swapping
station, where consumers could drive
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in to get their batteries replaced.68 However, consumers in the
U.S. (Tesla’s biggest market) were
not impressed with this solution and preferred to use home and
public chargers, given their lifestyle

and the conveniently available infrastructure of public charging
stations. Both Tesla and Better Place
dropped their swapping approaches eventually, as it did not
make business sense to build stations
when consumer demand was minimal.
In China, battery swap technology had already been tested for
personal and commercial vehicles in
five cities before it was launched by NIO.69 However, although
swap stations tried to replicate the
experience of existing gas stations, there were still issues that
prevented their wide-scale
implementation.70 Most swapping stations were concentrated in
larger cities like Beijing and the cost
of installing a charging station was huge – approximately
US$500,000. Moreover, swapping stations
were not standardised, which meant that EV owners could only
swap batteries at their own brand’s
stations.71
However, despite the constraints, battery swapping had several
benefits. It could reduce the peak
consumption of electricity by centralised charging and avoided
grid overloading due to mass EV

charging. Empty batteries could be charged when electricity was
cheap and demand was low. Battery
swapping was also quick to execute and typically took a couple
of minutes. Additionally, providing
swapping services as a BaaS to consumers helped reduce the
risks related to inefficient battery
disposal.72
NIO BaaS
NIO had realised early in its business that batteries could add
significant costs to EVs, which were
competing against traditional fuel-run cars in the market.
Removing the cost of the battery from the
product could reduce its price significantly and potentially
increase its attractiveness to consumers.73
Making batteries more affordable, accessible and reusable was
also necessary from the circular
economy perspective and for realising the Chinese
government’s ambition of having one in five
vehicles driven by non-fossil/non-fuels by 2025.74
NIO batteries were manufactured using cell-to-pack technology,
to achieve an energy density that

was higher than a conventional battery pack by about 37%.75
The batteries were also lighter and used
40% fewer components than standard batteries.76 All batteries
were monitored by a cloud-based
battery management system, which included features like
thermal propagation prevention and smart
parameter adjustments for environment conditions to improve
battery performance.77 Consumers
who brought a NIO EV with the battery could enjoy lifetime
free battery swap services and out-of-
town free power services of up to six times per month.78
Battery charging and swapping services
were offered to consumers using an integrated power solution.
The NIO power solution consisted of four comprehensive
battery services: a home charging solution
(Power Home), a battery exchange (Power Swap) service at
swapping stations, a mobile charging
service provided through on-call service trucks (Power Mobile),
and a 24-hour on-demand pick-up
and drop-off charging service (Power Express). NIO vehicles
were also compatible with publicly
accessible charging network in China of over 214,000 charging
piles, 59.6% of which were

superchargers (fast chargers).79
Although NIO had home charging solutions for its batteries,
very few homes in China had the
infrastructure to support installation of home charging points,
as a majority of its EV consumers were
from large cities and lived in high-rise condominiums.80 Hence,
NIO realised that to attract more
customers, it would have to focus more on the option of
charging the EV batteries in a swapping
https://multimedia.scmp.com/news/china/article/2169344/china-
2025-electric-vehicles/
https://multimedia.scmp.com/news/china/article/2169344/china-
2025-electric-vehicles/
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station. The government had also launched a support scheme in
2020 to promote the setting-up of
swapping stations to lure more consumers to buy EVs, in a bid
to control pollution from fuel-based
vehicles.81 These reasons further motivated NIO to expand its
swapping station network and offer
BaaS services to its consumers.82
In early 2020, NIO started offering subscription plans for its
battery services, which would allow
consumers to buy its vehicles without the battery. Removing the
battery reduced the purchase price
of the NIO vehicles by over US$10,834.83 In the subscription
plan, buyers would pay a monthly fee
of US$152 (CNY 980) to lease a battery and could use free
charging and swapping services as part
of the BaaS subscription.84 The services were offered through a
mobile internet-based solution that
managed an extensive network of battery charging and swap
facilities.
NIO had opened its first battery swapping station in 2018;
however, it took a few years for its battery
swapping services to accelerate interest amongst consumers. By
October 2020, NIO had completed

one million swaps and by May 2021, it had completed two
million swaps.85 By June 2020, NIO had
built 135 swap stations across 59 cities in China.86 However,
the number of swapping stations were
far below NIO’s original plans of setting up 1,100 units by
2020. This slow growth was attributed to
NIO’s cash flow crisis in 2019, which was alleviated through its
subsequent deal with the local
government of Hefei.87
The power swap locations were connected through its automated
power solution across numerous
cities in China to provide improved battery supply and services
at its swapping locations. The
automated solution also inspected every battery pack removed
from a vehicle for electrical
performance before recharging it for the next user. If a fault
was identified, the battery was taken out
of circulation and sent for repairs.
In terms of footprint, NIO swapping stations were as large as
three parking spaces. The changing
process was fully automatic; the car was driven into the station
where it was serviced by a car lift-

battery replace system that replaced the batteries
automatically.88
Key features of NIO BaaS
NIO’s bet on BaaS hinged on several key factors. Firstly, the
battery swaps at the swapping station
were fast; on average, it took three to five minutes for a battery
swap – replacing the existing battery
in the vehicle with a fully charged battery, compared to 75
minutes for a full charge at a
supercharger.89
Secondly, the battery swaps were also slightly cheaper than
other battery alternatives for EVs. NIO’s
service offered six swaps a month in its monthly subscription
price, which provided about 1,500
miles of range. The math for the subscription amounted to
US$0.10 per mile, which was slightly
lower than the estimated US$0.104 per mile cost for using Tesla
superchargers.90
Thirdly, swapping batteries also motivated NIO customers to
opt for battery upgrades when a more
advanced battery pack was available, which helped preserve the
car’s performance and resale value

and mitigate broader concerns of battery degradation.91 In
order to ensure that new batteries could
fit with old cars, NIO had standardised its battery sizes, thereby
also enabling its batteries to become
a replaceable module in the broader construction of the vehicle
(refer to Exhibit 4 for more details
on NIO EV Price details with BaaS).
Fourthly, batteries were an important consideration in the EV
market; market dominance of an EV
producer was highly correlated with who could build the best
battery technology. NIO’s BaaS had
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helped in this aspect by allowing the company to invest in

battery technology without worrying about
replacing older batteries.
BaaS also created two sources of revenue - a monthly recurring
revenue from battery service
subscriptions and the other from upgrade requests for newly
launched batteries. By early 2021,
approximately 40% of NIO owners had already opted for battery
subscriptions. 92 With
approximately 75,500 NIO EVs on the road, analysts estimated
that the subscription service
generated about US$4.5 million in monthly recurring revenue,
or US$54 million in annual revenue.93
This revenue was expected to increase further as NIO expanded
production, increased subscription
penetration among existing consumers, and grew its network of
swap stations.94 In July 2021, NIO
unveiled its ‘NIO Power 2025’ plan to further expand its BaaS
initiative and completed 301 battery-
swapping stations across the country, with plans to reach the
3000 mark by 2025.95
Competition with Tesla

While NIO was a much smaller company than Tesla in terms of
market capitalisation, market share,
global presence, and production capacity,96 its stock had
garnered considerable media coverage and
attracted the attention of analysts worldwide.97 NIO’s stock had
seen as much volatility as Tesla’s
since its IPO, and had soared from US$3.27 in May 2020 to
US$61.95 in January 2021.98 In
comparison, Tesla had seen a steeper jump advancing from
US$49.58 in October 2019 to US$439.67
in October 2020, and US$880.02 by January 2021.99 Tesla’s
market capitalisation was at US$715.35
billion, while NIO’s was at US$67.88 billion as of August 2021.
But despite being one-ninth the size
of Tesla and overcoming a near brush with bankruptcy in 2019,
NIO had posted a 190% year over
year delivery growth in quarter two, 154% growth in quarter
three, and 111% growth in quarter four
of 2020.100
Tesla possessed a much larger manufacturing capacity than
NIO, and owned four operational
factories in Fremont, Nevada, New York, and Shanghai (with

Fremont and Shanghai producing
vehicles and the other two producing solar/battery technology).
Tesla’s global production had
increased by 39.6% year-over-year to 509,737 units by
2020.101 The automaker’s success was
mainly driven by an increase in EV demand in China (where the
economy had recovered quickly
from the impact of the Covid-19 pandemic) and an expansion of
demand in the US.
Tesla started manufacturing in China at its Shanghai Plant in
2019 to promote local vehicle
production, reduce costs, and expand its profit in China.
Notably, the company had delivered 137,000
EVs in China and posted an increase of 28.3% on its revenues
year-over-year, hitting US$31.5 billion
in 2020.102 In comparison, NIO operated only one factory, with
an annual capacity of around 90,000
vehicles, and had delivered 36,721 vehicles in 2020. The
company had plans to increase its
manufacturing capacity to 240,000 vehicles per year by
2021.103
Tesla’s supercharger network had also helped strengthen its
competitive moat. Setting up a

supercharger station was less expensive than a swapping station
and could cost between US$100,000
to US$ 175,000.104 The company had installed 6,000
supercharging stations in China and more than
20,000 superchargers globally. However, analysts had argued
that these numbers were not enough
for its customers, as there were over 1.2 million Tesla vehicles
on the road worldwide.105 Owners in
high density areas were often plagued with long lines as demand
for the Tesla chargers exceeded
supply. Besides, each charging session could take on average
45-50 minutes leading to long wait
times and congestion at the stations.106

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In contrast to Tesla’s charging stations, many industry analysts
perceived NIO’s BaaS as a powerful
competitive strategy. Battery swaps were not only more time
efficient than battery recharging, but
also easy to provide as a subscription offer, enabling the
manufacturer to sell the vehicle at a cheaper
price by removing the price of the battery and offering it as a
service. Swaps also provided fully
charged batteries that could last for a longer range (about 380
miles) than a recharge (a 45-minute
recharge provided about 228 miles) at a supercharger.
Both Tesla and NIO provided battery packs of 100 kWh, and
while Tesla intended to continue
providing similar weightage batteries in the future, NIO had
plans to start delivering 150 kWh battery
packs in 2022107, which could further reduce charging
costs.108 However, Tesla was also trying to
implement battery cost reduction measures, albeit with a
different strategy, and this posed a threat to
NIO’s BaaS. Tesla had plans to produce lithium-ion batteries
in-house at half the cost of its existing
batteries with an annual production capacity of 100 GWh

batteries (for 1.4 million EVs) by 2022.109
Tesla was also trying to enhance its partnerships with battery
suppliers and directly source materials
for the batteries to bring down battery costs.110
Additionally, Tesla was planning to launch fully autonomous
cars in the near future, as it felt that
this was the ensuing fate of the automobile industry.111 NIO
had similar predictions for the future,
and had announced a partnership with artificial intelligence (AI)
chipmaker Nvidia, to accelerate
progress towards building autonomous cars.112
Despite Tesla’s large lead, analysts believed that regulators
were unlikely to favour a monopoly in
the EV market, and smaller competing companies like NIO
could benefit from regulatory controls
and remain in the run.113 In markets like China, government
strategies to build internal competition
and bring down prices of EVs significantly could further curb
Tesla’s growth in the future.114 Overall,
analysts predicted that market competition in the EV sector
would continue to be cutthroat, with new
emerging players having ample opportunities to capture market

share.115 This posed a promising
market for existing players like NIO, as well as new incumbents
planning to enter the EV market.116
Battery Technology: A Possible Game Changer?
In addition to its niche BaaS strategy, NIO had also used a
diversification strategy to remain
competitive in the market, and stand up against Tesla. Beyond
EVs, NIO had diversified its business
in 2018 and added two new businesses under its belt – NIO
House and NIO Life. NIO House was a
concept store with home design products that gelled with NIO
cars to provide owners an opportunity
to become connoisseurs of NIO designs.117 Similarly, NIO life
was an e-commerce mobile app
selling NIO lifestyle products to consumers, aimed at expanding
NIO’s brand philosophy. Since its
launch, NIO’s online store had roped in over 500 designers
around the world, developed 813 new
products, and sold these products to over 2.8 million customers
in China (refer to Exhibit 5 for NIO
House store).118

It was NIO’s BaaS, however, that had managed to garner the
maximum media attention, and was
lauded as an innovative concept and the firm’s unique selling
point in the competitive EV market.
Nonetheless, many analysts had opined that while NIO’s BaaS
and large-scale implementation of
swapping stations could provide the company with an immediate
advantage in the market, it was
unlikely to provide much competitive sustenance over the long
run.119 This was primarily because
battery technology was evolving rapidly and charging times
were predicted to reduce dramatically
in the near future.120

10/20
EV’s with lithium-ion batteries were expected to give way to
vehicles with lithium-iron phosphate
and other technologies that could cut costs, extend vehicle
ranges to 400 miles or more between
charges, and enable batteries to last as long as a million
miles.121 EVs were expected to become more
useful as their ranges increased, and provide a better value
proposition because the batteries could
have resale value and last longer than the cars they were sold
with. This was also in line with the
goals of governments and industries to move towards a circular
economy.
Additionally, new EV technology could make electric vehicles
as cheap as those powered by petrol,
and the EV price would no longer pose a cost barrier.122 On a
separate note, analysts had raised
concerns over NIO’s battery swapping strategies, arguing that
setting up battery swapping
infrastructure and swapping stations was expensive, and hence
needed to fulfil long-term needs of
consumers to make business sense.123 However, with the
battery technology advancing so quickly,

it seemed unlikely that swapping stations would remain relevant
over the long time horizon.124
Amidst such strategic concerns, would it make more sense for
NIO to halt its battery-swapping
infrastructure and focus on the battery technology itself?
Alternatively, could NIO continue to benefit
from its BaaS services, and make it its winning strategy? How
could it explore opportunities with
BaaS to make its EVs more sustainable in the future? What
other strategies could NIO explore to
compete with the EV giant Tesla? Would the battery-swapping
model continue to be relevant in the
future? In which other industries could battery swapping prove
to be a plausible business model?
Could the as-a-service model help propagate a circular
economy?

11/20
EXHIBIT 1: GLOBAL EV GROWTH (SALES)
12/20
Source: Roland Irle, “Global EV Sales for 2021, EV-Volumes”,
EV-volumes.com, https://www.ev-volumes.com/,
accessed September 2021
EXHIBIT 2: CIRCULAR ECONOMY EV BATTERY VALUE
CHAIN

Source: Adapted form Cai Wenlong et.al., “A Review on Energy
Chemistry of Fast-charging Anodes”, Chemical
Society Reviews 49(12), June 2020,
A_review_on_energy_chemistry_of_fast-
charging_anodes/figures?lo=1,
accessed September 2021.
EXHIBIT 3: NIO EV MODELS
https://www.ev-volumes.com/
file:///C:/Users/shantanub/Downloads/A_review_on_energy_che
mistry_of_fast-charging_anodes/figures%3flo=1
13/20

NIO ES8 SUV
NIO ES6 SUV
14/20
NIO EC6
NIO ET7

15/20
NIO EP9
Source: Flickr Commons,
https://www.flickr.com/commons/usage/, accessed September
2021.
EXHIBIT 4: NIO EV PRICE WITH BAAS
Price Benefits ES8 EC6 ES6
70-100kWh 70-100kWh 70-100kWh
MSRP
US$ 73,389 to
US$ 82,484
US$ 57,736 to
US$ 66,836
US$ 56,167 to

US$ 65,267
Post-Subsidy Price
US$ 70,884 to
US$ 79,701
US$ 55,194 to
US$ 64,012
US$ 53,626 to
US$ 62,443
Price with BaaS
US$ 59,901 to
US$ 59,619
US$ 44,212 to
US$ 43,930
US$ 42,643 to
US$ 42,361
Source: NIO, “Battery as a Service”, https://www.nio.com/baas,
NIO Battery Swap Station

https://www.flickr.com/commons/usage/
https://www.nio.com/baas
16/20
2021.
EXHIBIT 5: NIO HOUSE STORE

17/20
2021.
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18/20
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29 Emma Woollacott, “Electric cars: What Will Happen to All
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30 Ibid.
31 Ibid.
32 Ibid.
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36 Ibid.
37 Madeleine Stone, “As Electric Vehicles Take Off, We'll
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40 Ibid.
41 Bloomberg, “In Beijing, You Have to Win a License Lottery
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44 2021 Tesla Model X, Luxury Hybrid and Electric SUVs,
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49 Ibid.
50 Yahoo News, “China’s Global EV Expansion Has
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53 NIO, https://www.nio.com/, accessed September 2021.
54 HBS, “Nio – A Chinese Tesla Disrupting The World’s
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55 NIO, https://www.nio.com/, accessed September 2021.
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19/20
56 Ibid.
57 Steven Millward, Nio raises $1b from IPO, TECHINASIA,

https://www.techinasia.com/china-electric-car-startup-nio-ipo-
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59 NIO, Stock Chart, Yahoo Finance,
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60 Kirsten Korosec, “Nio Recalls Nearly 5,000 ES8 Electric
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61 Shanthi Rexaline, “Nio's Smart EV Industrial Park
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ev-industrial-park-163820809.html, accessed September 2021.
62 NIO, “NIO Inc. Reports Unaudited First Quarter 2021
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63 Yue Wang, “EV Billionaire William Li’s NIO Speeding Up
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65 IEA, “Global EV Outlook 2020, Entering the Decade of
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67 Better Place unveils Europe’s first battery switch station in
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68 Benjamin Zhang, Tesla's battery-swapping plan has a mere
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69 Wang Tianyu, “EV Battery-Swapping Finds New Life in
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70 World Economic Forum, “Raising Ambitions: A New
Roadmap for the Automotive Circular Economy”, 2020,
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pdf, accessed September 2021.
71 Ibid.
72 Ibid.
73 NIO, “Battery as a Service”, https://www.nio.com/baas,
74 Pearl Lui and Daniel Ren, “NIO Teams Up with China’s
State Grid to Build Battery Charging, Swapping Stations across
Country to
Compete with Tesla”, South China Morning Post, December 25,
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75 Nora Manthey, “Nio Launches 100 kWh Battery, also as
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battery-also-as-battery-as-a-service/, accessed September 2021.
76 Ibid.
77 Ibid.
78 NIO, NIO Power, https://www.nio.com/nio-power, accessed
September 2021.
79 Wang Tianyu, “EV Battery-Swapping Finds New Life in
China”, CGTN, August 17, 2020,
https://news.cgtn.com/news/2020-08-

16/EV-battery-swapping-finds-new-life-in-China-
SWZQhFZoEE/index.html, accessed September 2021.
80 Ibid.
81 Ibid.
82 Monika, Chinese automakers strive to develop battery
swapping business, Gasgoo, May 6, 2021,
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83 NIO, “Battery as a Service”, https://www.nio.com/baas,
84 Ibid.
85 Mark Kane, China: NIO Reports 4 Millionth EV Battery
Swap, NIO, News, 02 Oct, 2021,
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86 “NIO, Battery Swapping”, NIO Blog, June 29, 2020,
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87 Shanthi Rexaline, “Nio's Smart EV Industrial Park
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Know”, Yahoo Finance,
February 5, 2021, https://finance.yahoo.com/news/nios-smart-
ev-industrial-park-163820809.html, accessed September 2021.
88 Ibid.
89 Ibid.

90 Alana Levin, “Understanding Nio’s Battery-as-a-Service”,
Data Driven Investor, February 10, 2021,
https://medium.datadriveninvestor.com/understanding-NIOs-
battery-as-a-service-dc1a38ec2375, accessed September 2021.
91 Ibid.
92 Ibid.
93 Ibid.
94 Ibid.
95 NIO Announces NIO Power 2025 Battery Swap Station
Deployment Plan, NIO, Newsroom, Jul 9, 2021,
https://www.nio.com/news/nio-announces-nio-power-2025-
battery-swap-station-deployment-plan, accessed September
2021.
96 Yahoo Finance, “Tesla Stock”,
https://finance.yahoo.com/quote/TSLA?p=TSLA&.tsrc=fin-srch,
97 Yahoo Finance, “NIO Stock”,
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2021.
98 Ibid.
99 Ibid.
100 Ibid.

https://www.youtube.com/watch?v=4nJ7-s8IZPc&t=140s
https://finance.yahoo.com/quote/NIO/
https://techcrunch.com/2019/06/27/nio-recalls-nearly-5000-es8-
electric-suvs-over-fire-risk/
https://finance.yahoo.com/news/nios-smart-ev-industrial-park-
163820809.html
https://ir.nio.com/news-events/news-releases/news-release-
details/nio-inc-reports-unaudited-first-quarter-2021
https://ir.nio.com/news-events/news-releases/news-release-
details/nio-inc-reports-unaudited-first-quarter-2021
william-li-is-chasing-growth-overseas/?sh=202fdde61a80
https://finance.yahoo.com/news/nios-norway-market-entry-
unfolding-161938736.html
https://www.greencarcongress.com/2011/06/bp-20110628.html
https://www.businessinsider.com/teslas-battery-swapping-plan-
isnt-working-out-2015-6
https://news.cgtn.com/news/2020-08-16/EV-battery-swapping-
finds-new-life-in-China-SWZQhFZoEE/index.html
http://www3.weforum.org/docs/WEF_Raising_Ambitions_2020.
pdf
https://www.scmp.com/business/china-
battery-charging-swapping
https://www.scmp.com/business/china-

battery-charging-swapping
https://www.electrive.com/2020/11/06/nio-launches-100-kwh-
battery-also-as-battery-as-a-service/
https://www.nio.com/nio-power
https://www.nio.com/blog/brief-history-battery-swapping
https://finance.yahoo.com/news/nios-smart-ev-industrial-park-
163820809.html
https://medium.datadriveninvestor.com/understanding-NIOs-
battery-as-a-service-dc1a38ec2375
https://medium.datadriveninvestor.com/understanding-nios-
battery-as-a-service-dc1a38ec2375
https://www.nio.com/news/nio-announces-nio-power-2025-
battery-swap-station-deployment-plan
https://finance.yahoo.com/quote/TSLA?p=TSLA&.tsrc=fin-srch
https://finance.yahoo.com/quote/NIO/
20/20
101 Tesla, “Tesla Q4 2020 Vehicle Production & Deliveries”,
January 2, 2021, https://ir.tesla.com/press-release/tesla-q4-
2020-vehicle-
production-deliveries, accessed September 2021.

102 “Tesla: Aiming for Annual Production and Sales of 1
Million Vehicles in 2022”, MarkLines, May 10, 2021,
https://www.marklines.com/en/report/rep2151_202104, accessed
September 2021.
103 John Rosevear, “NIO Announces Deal to Double Its
Production”, The Motley Fool, May 24, 2021,
https://www.fool.com/investing/2021/05/24/NIO-announces-
deal-to-double-production-capacity/, accessed September 2021.
104 Darrell Etherington, Inside Tesla’s Supercharger Partner
Program: The Costs And Commitments Of Electrifying Road
Transport,
TechCrunch, Jul 27, 2013,
https://techcrunch.com/2013/07/26/inside-teslas-supercharger-
partner-program-the-costs-and-commitments-
of-electrifying-road-transport/, accessed September 2021.
105 Johnna Crider, “Tesla China Reaches Another Milestone:
6,000 Supercharger Installations”, CleanTechnica, March 7,
2021,
https://cleantechnica.com/2021/03/07/tesla-china-reaches-
another-milestone-6000-supercharger-installations/, accessed
September 2021.
106 Alana Levin, “Can Nio Compete with Tesla?”, Data Driven
Investor, January 18, 2021,
https://medium.datadriveninvestor.com/can-nio-compete-with-
tesla-45ac8e36401c, accessed September 2021.
107 Mark Kane, “NIO Announces 150 kWh Solid-State
Batteries For 2022”, Insideevs, News,
https://insideevs.com/news/465188/nio-
150-kwh-solid-state-batteries-2022/, accessed September 2021.

108 Alana Levin, “Can Nio Compete with Tesla?”, Data Driven
Investor, January 18, 2021,
tesla-45ac8e36401c, accessed September 2021.
109 “Tesla: Aiming for Annual Production and Sales of 1
Million Vehicles in 2022”, MarkLines, May 10, 2021,
https://www.marklines.com/en/report/rep2151_202104, accessed
September 2021.
110 Ibid.
111 “Elon Musk Says Full Self-Driving Tesla Tech 'Very
Close', https://www.bbc.com/news/technology-53349313,
accessed
September 2021.
112 “NIO Partners with NVIDIA to Develop a New Generation
of Automated Driving Electric Vehicles”, Bloomberg, Business,
January 9, 2021, https://www.bloomberg.com/press-
releases/2021-01-09/nio-partners-with-nvidia-to-develop-a-new-
generation-of-
automated-driving-electric-vehicles, accessed September 2021.
113 Ibid.
114 Ibid.
115 Ibid.
116 Ibid.
117 “NIO Website”, https://www.nio.com/, accessed September
2021.

118 NIO, “ NIO Life is Three Years Old”, February 25, 2021,
https://www.nio.com/blog/nio-life-three-years-old, accessed
September
2021.
119 Ibid.
120 Pippa Stevens, “The Battery Decade: How Energy Storage
Could Revolutionize Industries in the Next 10 Years”, CNBC,
December 30, 2019, https://www.cnbc.com/2019/12/30/battery-
developments-in-the-last-decade-created-a-seismic-shift-that-
will-play-
out-in-the-next-10-years.html, accessed September 2021.
121 Tim Mullaney, “Tesla and the Science Behind the Next-
Generation, Lower-Cost, ‘Million-Mile’ Electric-Car Battery”,
CNBC,
June 30, 2020, https://www.cnbc.com/2020/06/30/tesla-and-the-
science-of-low-cost-next-gen-ev-million-mile-battery.html,
accessed
September 2021.
122 Ibid.
123 Lawrence Ulrich, How is this a good idea?: EV Battery
Swapping, IEEE Spectrum, May 13, 2021,
https://spectrum.ieee.org/ev-
battery-swapping-how-is-this-a-good-idea, accessed September
2021.
124 Ibid.

https://ir.tesla.com/press-release/tesla-q4-2020-vehicle-
production-deliveries
https://ir.tesla.com/press-release/tesla-q4-2020-vehicle-
production-deliveries
https://www.marklines.com/en/report/rep2151_202104
https://www.fool.com/investing/2021/05/24/NIO-announces-
deal-to-double-production-capacity/
partner-program-the-costs-and-commitments-of-electrifying-
road-
transport/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ
29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAL3jFE0UuH992Z
Xb7mvWBLsz5fKsg7qU4rdny-
CmNp0TbmSUhr2RjMXR2nB6vfpTyQgiCezrx-eWYHpf0K0Qg-
e6Fdq9461ioa056p3BmLO1NM2KC5zwYsETLXBvBNdd-
c5C4vGRoECCZBZMij2Fr8XOrpOS4_dIRnDV4WbDWswK
partner-program-the-costs-and-commitments-of-electrifying-
road-
transport/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ
29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAL3jFE0UuH992Z
Xb7mvWBLsz5fKsg7qU4rdny-
CmNp0TbmSUhr2RjMXR2nB6vfpTyQgiCezrx-eWYHpf0K0Qg-
e6Fdq9461ioa056p3BmLO1NM2KC5zwYsETLXBvBNdd-
c5C4vGRoECCZBZMij2Fr8XOrpOS4_dIRnDV4WbDWswK
https://cleantechnica.com/2021/03/07/tesla-china-reaches-
another-milestone-6000-supercharger-installations/
tesla-45ac8e36401c
https://insideevs.com/news/465188/nio-150-kwh-solid-state-
batteries-2022/

https://insideevs.com/news/465188/nio-150-kwh-solid-state-
batteries-2022/
tesla-45ac8e36401c
https://www.marklines.com/en/report/rep2151_202104
https://www.bbc.com/news/technology-53349313
https://www.bloomberg.com/press-releases/2021-01-09/nio-
partners-with-nvidia-to-develop-a-new-generation-of-
automated-driving-electric-vehicles
https://www.bloomberg.com/press-releases/2021-01-09/nio-
partners-with-nvidia-to-develop-a-new-generation-of-
automated-driving-electric-vehicles
https://www.nio.com/blog/nio-life-three-years-old
https://www.cnbc.com/2019/12/30/battery-developments-in-the-
last-decade-created-a-seismic-shift-that-will-play-out-in-the-
next-10-years.html
https://www.cnbc.com/2019/12/30/battery-developments-in-the-
last-decade-created-a-seismic-shift-that-will-play-out-in-the-
next-10-years.html
https://www.cnbc.com/2020/06/30/tesla-and-the-science-of-low-
cost-next-gen-ev-million-mile-battery.html
1 Skill development guide
formal report
Skill development guide: writing a
formal report
No skill is as important to managers as report writing. As a
manager of the future, you

need to be prepared to write progress reports, proposals,
accident reports and
evaluation reports – to name but a few! You would be likely to
use a formal report
format if:
ion
Remember that a formal report should reflect and maintain the
organization's
professional image – especially if it is to be seen by people
outside the organization.
Because of the importance of formal report writing for
managers, lecturers in
business schools often set assignments that require you to write
a report of this nature.
In this skill module we shall be concerned only with
suggestions for the writers of
formal management reports. We shall not try to present a
comprehensive treatment of
informal reports, including information reports,
recommendation reports, justification
reports, and proposals – for more information on these, please
refer to the suggested
further reading at the end of this section.
The guidelines given in this document are general. In all
‘formal report’
assignments it is important that you apply OB knowledge to the
question or
case/problem in hand in order to produce critically informed

analysis, and that you
seek guidance from your lecturer on each of the following
criteria:
What exactly is a formal report?
The main differences between formal and informal reports are
in tone, structure, and
length. The planning of every report begins with a statement of
purpose explaining the
goal, significance, and limitations of the project. Reports
include primary
information from your own observation and experience and
secondary information
gained through library research. Formal reports require careful
citation of information
Work and Organisational Behaviour: Skill Development Guide
© Carolyn Forshaw, 2010
formal report
taken from secondary sources in the form of footnotes,
endnotes, and a list of

references in a bibliography. The overall presentation of the
report may be deductive
or inductive and its individual parts may be arranged
chronologically, geographically,
spatially, or topically.
In their discussion of strategies or plans for the organization of
formal reports, Guffey
and Nagle (2007) define the deductive plan as one that ‘present
big ideas first’. This
means beginning with findings, proposals, or recommendations.
For example, if you
were studying four possible reward systems to improve
employee motivation, you
would begin by recommending the system you judge to be most
appropriate to the
organization's human resource strategy and follow with
discussion of the alternatives.
It is suggested that the deductive strategy is used when the
reader is knowledgeable
and supportive.
In contrast, the inductive strategy or plan presents data and
discussion first,
followed by conclusion and recommendations. Guffey and
Nagle (2007) believe that
this sequence is often most effective because ‘formal reports
generally seek to educate
the reader’ (p. 279). Using the study of four possible reward
systems to improve
employee motivation mentioned above as an example, an
inductive plan would begin
with information regarding all proposed programmes, followed
by analysis of the
information and conclusions, and finally a recommendation
drawn from that analysis.

The format of the report
Final presentation of the formal report includes three major
sections:
– such as the letter of transmittal, the title
page, table of
contents, and an executive summary
– includes an introduction, background information,
discussion of
findings, summary, conclusions, and recommendations
– such as the works cited, a
bibliography, and the
appendix.
Prefatory parts
Letter of transmittal
First impressions are important; the letter or memo authorizing
the report should
therefore be given serious consideration. The letter should:

formal report
Title page
The title page is the first page of report. It should include:
Report number (if necessary).
Table of contents
Rather predictably, this shows the contents and arrangement of
the report. It should
always include a list of appendices, and sometimes also a list of
illustrations.
Executive summary
This is an abridged version of whole report, written in non-
technical terms; it should
be very short and very informative; normally it describes salient
features of report,
draws a main conclusion and makes a recommendation. It is
always written last, after
the rest of report has been written.
The body

Introduction
The job of the introduction is to prepare the reader for what is
to come; it should
indicate the purpose and scope of the report and provide
background information so
that the reader can read the discussion intelligently. It should
also motivate the reader,
making them understand why the problem was researched and
why the study
represents a contribution to existing knowledge.
Guffey and Nagle (2007) suggest that the introduction contain
seven items:
authorized
specific research
questions to be answered
estrictions of the
research
providing coherence
and transition for the reader.

formal report
Background
The introductory paragraph is usually followed by a review of
relevant literature,
often given the heading ‘background’. The literature review
serves the following
purposes in the presentation of the report:
familiarity with relevant
developments
e
done
presenting and
evaluating what is already known about your research topic
findings. Your report
will show how your study expands, revises, or improves
knowledge in an area.
The goal of the literature review is to demonstrate ‘the logical
continuity between
previous and present work’ (APA, 1994, p. 11).

Discussion of the findings
This section is a narrative, providing all the details, evidence
and data needed by the
reader to understand what you are trying to do, what you have
actually done, what
you have found out and what you think should be done next.
Formal reports often use visual aids to emphasize, summarize,
or clarify
information. Some general guidelines apply to the use of visuals
– they must:
e a credit to the source must be credited if appropriate
Graphics software packages can create professional-looking
visuals.
Summary / conclusions
After your discussion of the findings, you should offer a
summary of the major
conclusions or milestones reached. Conclusions are only
opinions, so can never
advocate action – that is the preserve of the next section.
Recommendations
If the discussion and conclusions suggest that specific action
needs to be taken, the
recommendations state categorically what must be done.

formal report
Supplementary parts
References
This section should include a list of reference documents which
were used to conduct
the project and which you consider will be useful to the reader.
It should contain
sufficient information for the reader to correctly identify and
order the documents.
In-text citations should be referenced following the APA
method. This is
outlined in detail in the ‘Writing a critical essay’ part of the
Skills Development
Guide, but as a brief guide, follow the format shown in the
reference below.
Bratton and Gold (2007) identify, ‘five major HRM models that
seek to
demonstrate analytically the qualitative differences between
traditional
personnel management and HRM’ (p. 21).

At the end of the report, all works you have referred to in this
manner should be
included on a page entitled ‘References’, following the relevant
format (see ‘Writing
a critical essay’).
Bibliography
It is recommended to include a bibliography that lists all
sources consulted in the
research, whether or not you actually cited them.
Appendices
An appendix is a section at the back of the report that contains
supporting data (such
as charts, tables, photographs, specifications, and test results)
that rightly belong as
part of the main discussion but, if included with it, would
disrupt and clutter the major
narrative. If you find it necessary to include an Appendix you
should make clear
reference to it within the relevant section of the main discussion
so readers know
when it would be appropriate and enlightening for them to refer
to it.
Suggested further reading
Guffey, M. E. and Nagle, B. (2007). Essentials of Business
Communications (Fifth
Edition). Scarborough, ON: Nelson.
Hart, C. (1998). Doing a Literature Review. London: Sage.

Skill development guide: writing a formal reportWhat exactly is
a formal report?Suggested further reading

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