Nio aims to overtake Tesla in China with its first electric sedan

Mr William Li, chief executive of Chinese electric vehicle maker Nio, unveiling the ET7 sedan in Chengdu on Saturday. Prices start at 448,000 yuan (S$91,700) before government subsidies, versus 265,740 yuan for Tesla's Model 3. The US rival sold more
Mr William Li, chief executive of Chinese electric vehicle maker Nio, unveiling the ET7 sedan in Chengdu on Saturday. Prices start at 448,000 yuan (S$91,700) before government subsidies, versus 265,740 yuan for Tesla's Model 3. The US rival sold more than 120,000 of its entry-level model in China last year.PHOTO: REUTERS

BEIJING • Chinese electric-car maker Nio is pitting itself further against market leader Tesla, unveiling its first sedan in direct competition with the United States company's most popular model and other international rivals.

The all-electric sedan ET7, released by Nio founder and chief executive William Li at a company event in Chengdu on Saturday, will start at 448,000 yuan (S$91,700) before government subsidies.

That compares with 265,740 yuan for an entry-level Tesla Model 3, built in China.

Deliveries will start from the first quarter of next year.

Nio also launched a bigger volume battery pack, an upgraded autopilot system and the second iteration of its battery-swop station, a concept whereby people can change the battery in their vehicle rather than recharge it.

Nio targets reaching 500 power swop stations by the end of this year.

In the early months of last year, the company looked to be running out of cash having spent heavily on marketing and splashy showrooms for its ES8 and ES6 electric sport utility vehicles (SUVs).

But in April, it received a US$1 billion (S$1.3 billion) investment from entities led by the municipal government of Hefei and, in July, a US$1.5 billion credit line from Chinese banks.

Its New York-listed shares finished the year up 1,112 per cent and the company has begun reporting gross positive margins, having delivered 43,728 vehicles last year.

Mr Li, speaking in Shanghai prior to the weekend's event, listed brands like BMW, Mercedes-Benz and Audi as Nio's main rivals.

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. Tesla also started selling its roomier China-made Model Y SUV on Jan 1, which starts from 339,900 yuan.

Tesla chief executive Elon Musk has said the Model Y could outsell all other vehicles it makes.

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. In China, about 173 out of every 1,000 people own a car versus 433 in Malaysia and 373 in Russia.

In the US and Australia, it is 837 and 747 respectively, McKinsey & Co data show.

Car sales in Asia's biggest economy rose for a fifth straight month in November, led by demand for electric vehicles.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on January 11, 2021, with the headline 'Nio aims to overtake Tesla in China with its first electric sedan'. Subscribe