SINGAPORE – While domestic automakers in China are trying to position themselves against Tesla in the growing Chinese electric vehicle space, Nio is well-positioned to capture a sizable market share, an analyst told CNBC.
The Chinese electric car start-up launched its first sedan, the et7, on Saturday, with autonomous driving technology features that it claims to surpass Tesla’s. An et7 with a 70 kilowatt hour battery starts at 448,000 yuan ($ 69,000) before the grant.
“This is Nio’s iconic vehicle in the sedan category,” said Bill Russo, founder and CEO of Automobility Limited, on CNBC’s “Street Signs Asia”. He explained that the company has already established itself as a premium brand in the SUV category, where it is selling at a higher rate than its peer group in China.
“Now they are moving to the sedan segment, or the premium car segment,” said Russo, adding that the et7 will compete with Tesla’s imported S model.
“Obviously, the price that was announced on Niño Day is very competitive with that of the Model S,” he said, adding: “It is a statement of aspiration, it is a statement of where they hope to position their brand and among Chinese companies, they are establishing that they are the premium company (electric vehicles). “
Last year, Reuters reported that Tesla cut its Model S price in China by 3%.
Reaching Tesla
China is already the largest automotive market in the world. In its bid to become a leader in electric vehicle technology, Beijing supported the industry with subsidies, more flexible restrictions and the construction of a charging infrastructure.
Local electric vehicle manufacturers, including Nio, Li Auto and Xpeng, said deliveries increased last year – government data showed that sales of pure electric vehicles from January to November increased 4.4% in the year against a drop of 7 , 6% in general passenger car sales in the same period. Still, its delivery numbers fell short of Tesla’s.
“Clearly, everyone is trying to take a stand against Tesla. Tesla is certainly the market leader. It has the market capitalization that is way ahead of everyone else,” said Russo. In turn, Tesla’s market value is around $ 768.93 billion on Monday, while Nio has a market capitalization of around $ 98.63 billion.
Employees perform checks on an inspection line during a media tour of Nio Inc.’s production facility in Hefei, Anhui province, China, on Friday, December 4, 2020.
Qilai Shen | Bloomberg | Getty Images
Nio is “trying to establish himself as the Chinese Tesla, which means that you have to compare yourself as a premium EV brand in China with access to the China market, which is expected to grow significantly over the next five years,” said Russo.
“These companies are going to grow with the market and I think Nio is well positioned to capture a lot of that,” he said, adding that, even so, the company does not control its entire supply chain and depends on third parties for components like driving chipsets. autonomous.
In turn, Tesla increased its efforts in China, including more promotions on New Year’s Day. The company has a factory in the country with a capacity of 250,000 vehicles and has announced a new vehicle made in China, the Model Y, with a price of 339,900 yuan.
– CNBC’s Evelyn Cheng contributed to this report.