Nio, the new global player: Red figures, good cars
Nio is considered China's Tesla, not least because the brand has been in the red for many years. But many investors are betting a lot of money on the future.
When customers will be able to buy the ES8 in Germany - and what it will be called - is still open.
(Bild: Nio)
- Christian Domke Seidel
(Hier finden Sie die deutsche Version des Beitrags)
Episode two of a ten-part series in which heise/Autos looks at the Chinese car market. There, Chinese electric car producers - some of them strongly supported by the so-called Communist Party - are just warming up in order to soon roll up the domestic and international markets with a lot of momentum and a colorful bouquet of state-of-the-art cars. This is likely to have consequences for German car manufacturers, whose largest single global market has been China for several years.
On the one hand, this will foreseeably change the picture on German and European roads, but it will also have repercussions for German producers and their sales in China, the world's largest single market.
When people talk about electric car brands in China, they usually mean Nio, Xpeng or Li Auto. The three are engaged in a duel that can best be compared to the eternal premium match between Audi, BMW and Mercedes. It's a competition without losers, the participants see themselves as the gold standard in their segment, and there's a lot of national pride involved. In the long term, experts and investors give Nio the best chance of becoming a global competitor.
The beginning: the Bitauto platform
The founder and CEO of the brand is William Li. He was born in 1974 as the son of a dairy farmer. Rather less interested in the family business, he founded the Bitauto platform in 2000. On the site, companies and self-employed persons can present their services to the emerging Chinese automotive industry. In addition, there is market news as well as data and information of all kinds. In 2010, the portal goes public, and in 2013 William Li sells the company. Now the site provides data on new and used cars and is valued at around one billion dollars.
The money and invests Li in a total of forty companies, creates a huge and wealthy network. In 2014, he raised a total of 2.8 billion dollars and founded Nio. Two years later, he presented the EP9 sports car, which was primarily designed to attract attention. Every investor can buy one for $1.5 million.
William Li - From dairy farmer to billionaire
The company has not made a profit since then. Like Tesla for much of its history, Nio is deep in the red. In 2020, bankruptcy can only be secured by a government loan from the city of Hefei in the southeast of the People's Republic. In return, Nio undertook to build a factory and research center there.
In the third quarter of 2022 alone, the company had to report an operating loss of around $500 million (or 0.36 cents per share). Analysts nevertheless believe in the brand. This is because sales increased by 32.6 percent compared to the third quarter of 2021. Thanks to a total of 31,607 cars delivered. In the fourth quarter of 2022, the figure is expected to be between 43,000 and 48,000 units.
Bet on the future
The belief in the brand is based, on the one hand, on the prominent backers behind the brand. With Tencent, Baidu and Lenovo, three of the country's largest IT and high-tech companies are involved. On the other hand, it is the technology. In the People's Republic, Nio operates several hundred battery swap stations. The vehicles move automatically onto a lifting platform, the empty battery is pulled out, and a full one is put in. All this takes place within three minutes. Although the Better Place company failed spectacularly with a similar technology in Israel, the system is extremely popular in China.
From food to television to clothing
Like almost everything Nio offers. For example, its own social media platform. It serves to promote customer loyalty. If users are active here, they collect loyalty points. For example, by attending certain events that Nio sponsors, sharing a photo or buying products. Almost anything can be purchased on the Nio platform, from food to televisions to clothing. The car manufacturer receives a portion of the purchase price. In addition, there are entertainment offers for the car.
(Bild: Nio)
The poor quarterly figures do not prevent Nio from pushing ahead with globalization. In the middle of Silicon Valley, in San Jose, the brand maintains a research and development center, the global design center is located in Munich, and the center for "advanced engineering" is in Oxford, UK. This involves the further development of new technologies that are still in their early stages. In addition, there is the subsidiary XPT, which develops batteries and electric motors - although not exclusively for Nio, but also for external customers.
Audi sues Nio
The first Nio models have also been available in Germany since October 2022. The Chinese leave no doubt about which brands they want to poach customers from: Audi, BMW, Mercedes. The models have the quality to do so. That makes the competition nervous. Nio has two SUVs on offer - the ES6 and ES8. Because Audi has two similar-sounding vehicles in its range - the S6 and the S8 - the company sued the new competitor to protect its trademark rights. The amount in dispute is 150,000 euros. More importantly, however, Nio may have to come up with a new name. Audi's approach is not going down well everywhere in the industry. Especially since there is simply no risk of confusing the vehicles.
(fpi)