As the world watches Tesla grow and evolve, each manufacturer wants to take their share of the profitable market. Across the world in China, domestic car makers are attempting to position themselves to compete with the electric car giant. Chinese based startup company, Nio, is thought to be positioned well to capture a sizeable chunk of the market.
Nio released its first sedan, the et7, last month with self-driving capabilities. The company claims that their autonomous technology surpasses that of Tesla. The price point of the et7 with a 70 kilowatt-per-hour battery pack in particular is $69,000 (448,000 yuan) before subsidy. The pricing for this sedan has been adjusted as an aspiration to position their brand, as well as establishing themselves as the premium electric vehicle company in China.
Bill Russo, founder and CEO at Automobility Limited said, “This is the icon vehicle for Nio in the sedan category …”. After, he added that the company already has established itself as a premium brand in the SUV category where it is selling at a higher volume in comparison to its competitors in China. With the release of the et7, Nio is now able to compete with Tesla’s imported model S. As a result, Tesla reportedly dropped its Model S price 3% in China to combat the competition.
In an effort to aid in the bid to become a leader in electronic vehicle technology, Beijing has supported this industry with subsides and looser restrictions for the manufacturing of the cars. Additionally, charging infrastructure has been popping up more and more to support the required charging for the automobiles. Looking back at last year in China, homegrown electric vehicle manufactures Nio, Li Auto, and XPeng stated that deliveries surged. The Chinese government stated that pure electric vehicles from January through November jumped 4.4% on-year versus a 7.6% drop in overall passenger car sales in that same period.
While looking at the increasing number of deliveries of China based electronic automobile distributors, their delivery numbers do not compare to Tesla’s. Tesla is the market leader for a reason. The difference in market capitalization between Nio and Tesla is $98.63 Billion and $768.93 Billion, respectively. Serving as another barrier to these Chinese based companies, Tesla has a factory in the country that is capable of producing 250,000 vehicles, and has announced a new China-made vehicle, the Model Y. The price tag for the Model Y is 339,900 Yuan, which is 108,100 Yuan cheaper than the Nio et7.
As the electronic vehicle industry becomes more saturated with quality companies and automobiles, what is your pick? Would you stay with the well known and reliable American choice, or try a sportier new emergence from China?