Why some Chinese buy local electric car brands Nio, Xpeng and not Tesla

BEIJING: Chinese consumers thinking about buying Tesla electric cars or local alternatives have two things in mind: price and driving range.

According to anecdotes collected by CNBC, conversations across the country that do not represent qualitative research. But the comments shed light on what some consumers care about in China, the world’s largest car market.

Emerging U.S. car companies Nio, Xpeng and Li Auto, listed in the United States, saw an increase in deliveries last year, despite the collapse of the global vehicle market and the coronavirus pandemic. Shares of companies soared in 2020, but retreated slightly this year.

To be clear, Tesla remains the market leader in high-end electric vehicles in China. One day, during a quick overhaul at the start of the night trip, CNBC found 11 Tesla cars passing by, along with two Nio SUVs, one from WM Motor and the last Ppeng sedan from Xpeng..

This is what some Chinese consumers who took into account their decision to buy a local electric car say.

First, price was an important consideration.

Chen Yingjie, 42, said he bought Li Auto’s Li One SUV in April 2020 for about 300,000 yuan ($ 46,000) after realizing it would cost him about twice as much to buy a similar car. of Nio with all the specifications you wanted.

Nio’s starting price is low, but there are many features that come at an additional cost, Chen said. The Shanghai resident had previously bought the Xpeng G3 in 2019 and later a BYD electric car for his father in June 2020.

Part of Nio’s strategy is to sell many car features using a subscription model. For example, the company last year launched a “battery-as-a-service” plan that charges customers a monthly fee for battery power, similar to a regular fuel charge for a traditional gas car.

For Wang Jingyan, 29, he said Nio’s emphasis on customer service was something he thought was worth paying more for because it saved him time to go to a repair shop.

Price was also a factor for him. Wang said he bought his Nio ES6 for about 450,000 yuan in late 2019, his first electric car, following a recommendation from a job manager and comparing it to a more expensive Lexus RX.

He said he didn’t get a chance to try out Tesla’s Model 3 beforehand, but that he didn’t have such a good impression based on his friends ’experience and online stories about poor customer service in stores.

The extent to which the car could drive on a single battery charge was another important factor for Chinese consumers.

Zhang Zhen, 41, lives in a cold area of ​​northern China and was concerned about the ability of an electric car to have enough energy to complete a driving trip while warming up the vehicle. So last fall, his family bought a Li One, which comes with a fuel tank to charge the battery.

This fuel increases the driving range of Li One from 180 kilometers to 111 kilometers on a single charge.

Zhang said his wife mainly uses the car to send and pick up her children from school, at a daily distance of about 10 kilometers (6.2 miles). Children also prefer their wife’s car to the non-electric car because they can see cartoons on the vehicle’s integrated interior screen, Zhang said.

But he has found repairs more complicated than for a non-electric car and said he would not consider buying another such vehicle in the northeast region of China due to the lack of public recharging infrastructure there.

In an effort to support the local development of electric vehicles, the Chinese government has launched subsidy programs and emphasized the creation of a national charging network.

But compared to the United States, most cars in China do not have fixed parking spaces, which means many drivers have regular access to battery charging stations, according to Mingming Huang, founding partner of Future Capital Discovery Fund, investor in Li Auto.

Therefore, he expects scope extension systems, such as start-up offerings, to be the best option for China in the next five to ten years. Li Auto’s Li One SUV comes with a fuel tank to charge the moving battery.

Finally, many Chinese drivers are choosing electric cars because of favorable government policy, such as programs that make it much faster and cheaper to get license plates for electric vehicles. Due to efforts to reduce congestion and pollution in the Chinese citys, locals often have to wait years to buy expensive license plates for fuel-powered cars.

After waiting almost a year in Hangzhou city to get a fuel car license plate, a 27-year-old who applied for anonymity decided not to wait any longer after seeing an Xpeng G3 electric car during a trip to the center commercial. The car fit its budget of about 180,000 yuan, after government subsidies, he said.

On the streets of Beijing, where license plates are also hard to come by, high-end electric car maker Tesla remains a popular choice.