SINGAPORE – As domestic automakers in China seek to position themselves against Tesla in the growing Chinese electric vehicle space, Nio is well-placed to capture a significant portion of the market, an analyst told CNBC.
The Chinese electric car start-up released its first sedan, the et7, on Saturday with self-driving technology features that it says surpass those of Tesla. An et7 with a 70 kilowatt-hour battery pack starts at 448,000 yuan ($ 69,000) before subsidy.
“This is the iconic vehicle for Nio in the sedan category,” Bill Russo, founder and CEO of Automobility Limited said on CNBC’s “Street Signs Asia on Monday.” He explained that the company has already established itself as a premium brand in the SUV category, where it sells at a higher rate than their peer group in China.
“Now they are moving into the sedan segment or the premium auto segment,” Russo said, adding that the et7 will compete with Tesla’s imported Model S.
“It’s clear that the pricing that was announced on Nio Day is quite competitive with the Model S,” he said, adding, “It’s a statement of ambition, it’s a statement of where they want to position their brand and between the Chinese companies, they determine that they are the premium company (electric vehicle). “
Last year, Reuters reported that Tesla was cutting its Model S price in China by 3%.
Catch up with Tesla
China is already the largest car market in the world. In its bid to become a leader in electric vehicle technology, Beijing has supported the industry with subsidies, relaxed restrictions and the construction of charging infrastructure.
Homegrown electric vehicle manufacturers, including Nio, Li Auto and Xpeng, said deliveries were up sharply last year – government data showed sales of pure electric vehicles were up 4.4% year-on-year from January to November increased, compared to a 7.6% decrease in total passenger car sales over the same period. Still, their delivery numbers lagged behind Tesla’s.
“Obviously everyone is trying to take a stand against Tesla. Tesla is definitely the market leader. It has a market cap that is way ahead of all others,” Russo said. Tesla’s market value, for its part, is about $ 768.93 billion as of Monday, while Nio has a market cap of about $ 98.63 billion.
Checking workers on an inspection line on a media tour of Nio Inc.’s manufacturing facility. in Hefei, Anhui Province, China, on Friday, December 4, 2020.
Qilai Shen | Bloomberg | Getty Images
Nio “is trying to profile itself as the Chinese Tesla, which means comparing yourself as a premium EV brand in China with access to the Chinese market, which will grow significantly over the next five years,” Russo said.
“These companies will grow with the market and I think Nio is well positioned to capture a lot of that,” he said, adding that the company still does not manage the entire supply chain and relies on third parties for components such as autonomous driving chipsets .
Tesla, for its part, has stepped up its efforts in China, including more promotions on New Year’s Day. The company has a factory in the country capable of producing 250,000 vehicles and has announced a new China-made vehicle, Model Y, with a price tag of 339,900 yuan.
– CNBC’s Evelyn Cheng contributed to this report.