SINGAPORE – As China’s domestic automakers try to position themselves against Tesla in the growing space of Chinese electric vehicles, Nio is well positioned to capture a sizeable chunk of the market, an analyst told CNBC.
The launch of Chinese electric vehicles launched its first sedan, the et7, on Saturday, with functions of automatic driving technology that, it claims, surpass that of Tesla. An et7 with a 70-kilowatt-hour battery starts at 448,000 yuan ($ 69,000) before the grant.
“This is Nio’s flagship vehicle in the sedan category,” Bill Russo, founder and CEO of Automobility Limited on CNBC’s “Street Signs Asia,” said 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 its group equal to China.
“They’re now moving into the sedan segment or the premium car segment,” Russo said, adding that the et7 will compete with the S. model imported from Tesla.
“Viouslybviamente, the price announced on Nio day is really quite competitive with the Model S,” he said, adding, “It’s a statement of aspiration, it’s a statement of where they hope to place their brand and among Chinese companies , establish that they are the premium company (electric vehicle) “.
Last year, Reuters reported that Tesla reduced the price of the Model S in China by 3%.
It is catching 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, looser restrictions and the construction of charging infrastructure.
Manufacturers of self-produced electric vehicles, 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 by 4, 4% year-on-year, against a fall of 7.6% in global passenger car sales in the same period. However, their delivery numbers were lower than Tesla’s.
“Obviously everyone is trying to position themselves against Tesla. Tesla is definitely the market leader. It has the market capitalization that is so ahead of the rest,” Russo said. For its part, Tesla’s market value is about $ 768.93 million as of Monday, while Nio has a market capitalization of about $ 98.63 million.
Employees make checks at an inspection line during a media tour of Nio Inc.’s production facilities. in Hefei, Anhui Province, China, on Friday, December 4, 2020.
Qilai Shen | Bloomberg | Getty Images
Nio “is trying to establish itself as the Chinese Tesla, which means you have to compare 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, as yet, the company does not control its entire supply chain and relies on third parties for components. such as autonomous driving 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 producing 250,000 vehicles and has announced a new vehicle made in China, Model Y, priced at 339,900 yuan.
– CNBC’s Evelyn Cheng contributed to this report.