Nio is coming off a stellar 2020. In the early months of last year, the automaker looked to be running out of cash having spent heavily on marketing and splashy showrooms for its ES8 and ES6 electric SUVs. But in April, it received a $1 billion investment from entities led by the municipal government of Hefei and in July, a $1.5 billion credit line from Chinese banks.
Its New York-listed shares finished the year up 1,112% and the company has begun reporting gross positive margins, having delivered 43,728 vehicles in 2020.
Li, speaking in Shanghai prior to this weekend’s event, listed Nio’s main rivals as automakers like BMW AG, Mercedes-Benz or Audi AG. While Tesla “maintains its ambition to become a Volkswagen or Ford in electric-vehicle manufacturing, we will insist on producing premium cars," he said.
Notwithstanding, Nio’s new sedan will go head-to-head with Tesla’s best-selling Model 3, of which more than 120,000 were sold in China last year. The Palo Alto, California-based company also started selling its roomier China-made Model Y SUV on Jan. 1, which starts from 339,900 yuan. Tesla CEO Elon Musk has said the Model Y has the potential to outsell all other vehicles it makes.
In an interview after the launch in Chengdu, Li said he sees the ET7 more as a rival to Tesla’s Model S if comparisons are to be made.
Nio is working on another sedan, too. Its one-two sedan punch follows three SUV models since 2018.
There almost certainly will be room for them all. Car ownership in China lags other developing nations, with about 173 out of every 1,000 people having an automobile versus 433 in Malaysia and 373 in Russia. In the U.S. and Australia, it is 837 and 747, respectively, McKinsey & Co. data show.
Auto sales in Asia’s biggest economy rose for a fifth straight month in November, led by demand for EVs. China, a “linchpin of growth for the EV market," according to Wedbush analyst Dan Ives, is expected to maintain its world-leading position.
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