SINGAPORE – As domestic automakers in China attempt to position themselves against Tesla in the growing Chinese electric vehicle space, Nio is well positioned to capture a sizable slice 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 are said to outperform those of Tesla. An et7 with a 70-kilowatt-per-hour battery starts at 448,000 yuan ($ 69,000) before the subsidy.
“This is the symbol for Nio in the sedan category,” said Bill Russo, founder and CEO of Automobility Limited, on CNBC’s Street Signs Asia on Monday. He said the company has already established itself as a premium brand in the SUV category, where it sells faster than its peer group in China.
“Now they are moving into the sedan segment or the premium car segment,” Russo said, adding that the et7 will compete with Tesla’s imported Model S.
“Obviously the pricing that was announced on Nio Day is actually pretty competitive with the Model S,” he said, adding, “It’s a statement of claim, it’s a statement of where they hope their brand is and under position the Chinese company. ” They realize they are the premium (electric vehicle) company. “
Last year, Reuters reported that Tesla cut its Model S price in China by 3%.
Catch up with Tesla
China is already the world’s largest car market. In its quest to become a leader in electric vehicle technology, Beijing has supported the industry with subsidies, relaxed restrictions and the expansion of charging infrastructure.
Domestic electric vehicle manufacturers including Nio, Li Auto and Xpeng said deliveries rose sharply over the past year. Government data showed that January-November sales of all-electric vehicles rose 4.4% year over year, while total passenger car sales fell 7.6% over the same period. Even so, their delivery numbers lagged behind those of Tesla.
“Obviously everyone is trying to position themselves against Tesla. Tesla is certainly the market leader. It has a market capitalization that is so far ahead of everyone else,” said Russo. Tesla’s market value as of Monday is around $ 768.93 billion, while Nio has a market capitalization of around $ 98.63 billion.
Employees conduct checks on an inspection line during 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 establish itself as the Chinese Tesla, which means that as a premium EV brand in China you have to compare yourself to access to the Chinese market, which will grow significantly over the next five years,” said Russo.
“These companies will grow with the market and I think Nio is well positioned to capture a lot of it,” he said, adding that the company still does not control the entire supply chain, relying on third party components like autonomous driving chipsets .
For its part, Tesla has stepped up its efforts in China, including further promotions on New Years Day. The company has a factory in the country that can produce 250,000 vehicles and has announced a new China-made vehicle, Model Y, priced at 339,900 yuan.
– CNBC’s Evelyn Cheng contributed to this report.