SINGAPORE – As Chinese automakers try to position themselves against Tesla in the growing space of China’s electric vehicles, Nio is well placed to capture a significant share of the market, an analyst told CNBC.
The Chinese electric car start-up launched its first sedan, et7, on Saturday, with automatic driving technologies that it claims to surpass that of Tesla. An ET7 with a 70 kilowatt-hour battery starts at 448,000 yuan ($ 69,000) before the subsidy.
“This is Nio’s flagship sedan,” Bill Russo, founder and CEO of Automobility Limited, told CNBC’s “Street Signs Asia” on 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 their similar group in China.
“It is now moving to the sedan or premium car segment,” Russo said, adding that the et7 will compete with the S model imported by Tesla.
“Obviously, the prices that were announced on Nio Day are actually quite competitive with the Model S,” he said, adding: “It’s a statement of aspiration, it’s a statement about where he hopes to position his brand among companies. Chinese, establish that they are the premium company (electric vehicle). “
Last year, Reuters reported that Tesla reduced its Model S price in China by 3%.
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China is already the largest car market in the world. In an effort to become a leader in electric vehicle technology, Beijing has supported the industry with subsidies, weaker restrictions and the construction of charging infrastructure.
Electric vehicle manufacturers, including Nio, Li Auto and Xpeng, said deliveries rose last year – government data showed that sales of pure electric vehicles from January to November rose 4.4% year-on-year. a decrease of 7.6% in total car sales in the same period. However, their delivery numbers were lower than Tesla’s.
“Clearly, everyone is trying to position themselves against Tesla. Tesla is definitely the market leader. It has a market capitalization that is far ahead of everyone else,” Russo said. In turn, Tesla’s market value is about $ 768.93 billion as of Monday, while Nio has a market capitalization of about $ 98.63 billion.
Employees perform checks at an inspection line during a media tour of the Nio Inc. production unit. from Hefei, Anhui Province, China, Friday, December 4, 2020.
Qilai Shen | Bloomberg | Getty Images
Nio “is trying to establish itself as a Chinese Tesla, which means you have to compare yourself as a premium EV brand in China with access to the Chinese market, which will increase significantly in the next five years,” Russo said.
“These companies will grow with the market and I think Nio is well positioned to capture much of that,” he said, adding that however, the company does not control its entire supply chain and relies on third parties for components such as self-driving chipsets.
In turn, Tesla has intensified its efforts in China, including several promotions on New Year’s Day. The company has a factory in the country that is capable of producing 250,000 vehicles and has announced a new vehicle made in China, the Y model, with a price of 339,900 yuan.
– CNBC’s Evelyn Cheng contributed to this report.