SINGAPORE – As domestic carmakers in China try to position themselves against Tesla in the growing Chinese electric vehicle space, Nio is well positioned to capture a large chunk of the market, an analyst told CNBC.
China’s electric car startup industry released its first sedan, the et7, on Saturday with features of self-driving technology that they say are superior to Tesla. Et7 with a 70 kilowatt-per-hour battery pack starts at 448,000 Yuan ($ 69,000) before subsidization.
“This is the iconic vehicle for Nio in the sedan segment,” Bill Russo, founder and CEO of Automobility Limited, said Monday on CNBC’s “Street Signs Asia”. He explained that the company has already established itself as a leading brand in the SUV sector where it sells at a higher rate than its peer group in China.
“Now they’re moving to the sedan segment, or the main car segment,” Russo said, adding that the et7 will compete with the Model S. introduced at Tesla.
“Of course, the price quoted on Nio’s Day is very competitive with the Model S,” he said, adding, “It’s a statement of desire, it’s a statement of where they are. hopes to establish their brand and among the Chinese companies, they are establishing that they are the leading company (electric vehicle). “
Last year, Reuters reported that Tesla had cut the Model S price in China by 3%.
Catching up with Tesla
China is already the largest automotive market in the world. In their bid to become a leader in electric vehicle technology, Beijing has supported the industry with subsidies, richer restrictions and building out of cost infrastructure.
Homegrown electric vehicle manufacturers including Nio, Li Auto and Xpeng said deliveries were made last year – government data showed that real electric vehicle sales from January through November jumped 4.4% year-on-year against a 7.6% fall in passenger car sales over the same period. However, their delivery numbers became scarce for Tesla.
“Clearly everyone is trying to stand up to Tesla. Tesla is definitely a market leader. It has a market capitalization that is so far ahead of everyone else,” Russo said. . For its part, Tesla’s market value is around $ 768.93 billion as of Monday but Nio has a market capitalization of around $ 98.63 billion.
Employees conduct in-line reviews 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 themselves as the Chinese Tesla, which means you have to compare yourself as a major EV brand in China with access to the Chinese market, which is about to grow significantly over the next five years, “Russo said.
“These companies are going to grow with the market and I think Nio is well placed to capture a lot of that,” he said, adding, still, that The company controls their supply chain and relies on third parties for components such as autonomous drive chipsets.
For its part, Tesla 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 carrying 250,000 vehicles and has announced a new vehicle made in China, Model Y, with a price tag of 339,900 Yuan.
– Evelyn Cheng from CNBC contributed to this report.