The Chinese electric car start-up released its first sedan, the et7, on Saturday with self-driving technology features that it claims surpass that of Tesla. An et7 with a 70 kilowatt-per-hour battery pack starts at 448,000 yuan ($69,000) before subsidy.
“This is the icon vehicle for Nio in the sedan category,” Bill Russo, founder and CEO at Automobility Limited, said Monday on CNBC’s “Street Signs Asia.” He explained that the company has already established itself as a premium brand in the SUV category where it is selling at a higher rate than their peer group in China.
“Now they’re moving to 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 quite competitive with the Model S,” he said, adding, “It’s a statement of aspiration, it’s a statement of where they hope to position their brand and among the Chinese companies, they are establishing that they are the premium (electric vehicle) company.”
Last year, Reuters reported that Tesla cut its Model S price in China by 3%.
Homegrown electric vehicle makers including Nio, Li Auto and Xpeng said deliveries surged last year — government data showed sale of pure electric vehicles from January through November jumped 4.4% on-year versus a 7.6% drop in overall passenger car sales in the same period. Still, their delivery numbers came short of Tesla’s.
“Clearly everybody’s trying to position against Tesla. Tesla is certainly the market leader. It has the market capitalization that’s so far ahead of everyone else,” Russo said. For its part, Tesla’s market value is around $768.93 billion as of Monday whereas Nio has a market capitalization of about $98.63 billion.
Employees make checks at an inspection line during a media tour of the Nio Inc. production facility in Hefei, Anhui province, China, on Friday, Dec. 4, 2020.
Qilai Shen | Bloomberg | Getty Images
Nio is “trying to establish themselves as the Chinese Tesla, which means you have to compare yourself as a premium EV brand in China with access to the China market, which stands to grow significantly over the next five years,” Russo said.
“These companies are going to grow with the market and I think Nio’s positioned well to capture a lot of that,” he said, adding that, still, the company does not control all of its supply chain and relies on third parties for components like autonomous driving chipsets.
For its part, Tesla has ramped up its efforts in China, including more 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 China-made vehicle, Model Y, with a price tag of 339,900 yuan.
— CNBC’s Evelyn Cheng contributed to this report.
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