In Norway, one in every four customers who test-drove a Nio bought the car, a higher proportion than in China, according to Li. Nio will be “in at least five European markets [in addition to Norway] by the end of 2022,” he said.
Chinese automakers are struggling to gain traction overseas. They lack the strong global brands of their Western and Japanese counterparts. Nio is taking on powerhouses like Tesla and covets a slice of the luxury car market. It is seeking to become a household name in Europe while the big global carmakers continue to hedge their bets on electric vehicles.
EV sales are ballooning in Europe. In the July to September quarter, they made up 12.7% of total new car sales in 18 major European markets, more than double the figure for the same period last year, which came to 6.1%, according to the European Automobile Manufacturers’ Association. The number of EVs sold during the period totalled 303,273, up 57% from a year earlier.
Nio delivered a record 24,439 cars during the three months ended September, twice as many as in the year-earlier period. The company expects to sell 23,500 to 25,500 cars in the October to December quarter. Its revenue in the July to September period soared 120% from a year earlier to 9.8 billion yuan ($1.5 billion).
Nio plans to expand its production capacity to meet surging demand for EVs. The company is building a new plant in Hefei, 470 km west of Shanghai. Nio says it will begin installing equipment at the factory this month and start production in the third quarter of 2022.
Heavy upfront investment costs are causing Nio to bleed red ink. But investors continue to value the company highly, betting on future growth. While its market value of $66.6 billion is dwarfed by Tesla’s $1 trillion, it is already worth 20% more than Toyota Motor, at $306 billion, even though its sales are far smaller than those of Japan’s biggest automaker.
China is promoting the development of homegrown electric car makers. In line with this policy, the Shanghai municipal government waives license plate fees for “new energy” vehicles, which refers to electric, plug-in hybrid and fuel cell cars.
Supported by Beijing, Nio and other Chinese EV startups are aggressively expanding around the world, attempting to upend the competitive landscape in an industry whose development up to now has been driven by international manufacturers of gasoline-powered cars.
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