NIO CEO cites Tesla’s warm welcome in China as it demands equal access from US gov’t

[beijingwalker]

NIO CEO cites Tesla’s warm welcome in China as it demands equal access from US gov’t​

Scooter Doll | Jul 13 2023 - 2:12 pm PT

As an American automaker, Tesla continues to grow its production footprint (and sales sheet) in China, but the same opportunities are not currently available to Chinese EV automakers, like NIO, hoping to enter the US market. NIO CEO William Li hopes that will soon change as both he and Elon Musk stress the need for improved relations between the US and China.

Earlier this summer, Elon Musk visited China, where he was welcomed by Foreign Ministers who rolled out a Tesla red carpet to the CEO as his American company continues on pace to deliver record-setting sales overseas.

Tesla’s Gigafactory Shanghai continues to pump out EVs for the local market, which are now also being shipped to Canada, meaning Tesla electric vehicles built in China have made their way into the North American market. So why not NIO’s ET5 or XPeng’s upcoming G6? I test-drove the BYD Han in California, but that Chinese EV is not sold in the US.

While Chinese automakers continue to expand to new markets in Europe, several, including NIO, haven’t broken their gaze from the prospect of one day selling their EVs in the US. So far, however, it’s been a one-way door. That’s because the cover charge to get into the US EV market comes in the form of astronomically high tariffs that inhibit new entrants because they simply don’t make sense from a business perspective.

NIO’s CEO, William Li, has taken note of this unequal treatment across two extremely prominent automotive markets and is demanding change so US consumers can benefit from the advanced and innovative technology Chinese electric vehicles can offer.

NIO’s ET5 sedan on display at a showroom in Gothenburg, Sweden / Credit: Scooter Doll

NIO’s plans for US sales in limbo until the gov’t eases up​

In a recent interview with the Financial Times, the NIO founder and CEO called on the US government to offer Chinese automakers equal access to its market – similar to China’s sales of Tesla EVs as well as countless joint ventures with American and European OEMs.

As we’ve noted numerous times in the past, the Chinese automotive market is the largest in the world and is easily the most saturated. There are over 600 startups in China specializing in EVs alone, joining an already crowded market of conglomerates like Geely, SAIC, and GAC, which each have their own arsenal of sub-brands selling vehicles.

This ultra-competitive market has been stoked by Tesla, who significantly slashed its prices earlier this year, igniting a price war that inevitably caused the China Association of Automobile Manufacturers (CAAM) to step in and demand a market-wide cooling off of price cuts between competitors, followed by a pledge that was quickly retracted as it flirted with violating Chinese anti-monopoly laws.

As a result, expansion to new markets is crucial to the survival of Chinese companies like NIO and XPeng (which are still startups, after all), hence why the US protectionism Li mentions is so frustrating, arguing that automakers should not be punished for political tensions amongst competitive countries.

Li also made a point to say that three-quarters of NIO’s investors come from outside of China, and the automaker is currently listed on the New York Stock Exchange ($NIO), despite not selling its EVs in the US. NIO currently has a US headquarters on the West Coast – a footprint we’ve kept a close watch on as we’ve anticipated entry into the North American market – but it appears we will still have to wait until the US government eases its tariff on Chinese EVs.

New qualifying terms for federal tax credits outlined in the Inflation Reduction Act don’t make things any easier for automakers importing EVs into the US – another reason we may not see NIO hit its original target of selling EVs in North America by 2023.

NIO reported a net loss of almost $700 million in Q1 of 2023 but recently got some breathing room thanks to a $740 million investment from the Abu Dhabi government. To do what? Expand its EV business to new international markets, of course!

For now, NIO’s CEO said the company will focus its efforts on Europe and will continue to monitor developments in the US before making any further decisions about expansion.

NIO CEO cites Tesla's warm welcome in China as it demands equal access from US gov't

As an American automaker, Tesla continues to grow its production footprint (and sales sheet) in China, but the same opportunities...

electrek.co

 

[protean]

NIO should first set up factory in US and make everything from nuts and bolts there and then demand access.

 

[flowerfan2020]

NIO should first set up factory in US and make everything from nuts and bolts there and then demand access.

Do American company made every thing from nuts and bolts there? Please educate me.

 

[PakFactor]

NIO should first set up factory in US and make everything from nuts and bolts there and then demand access.

Neither US does all you saying in China, so it's a mute point.

 

[nahtanbob]

Neither US does all you saying in China, so it's a mute point.

Tesla makes their cars in China for Chinese market. If NIO wants access to American market they better makes cars in America

Do American company made every thing from nuts and bolts there? Please educate me.

Tesla makes their cars in China for Chinese market. If NIO wants access to American market they better makes cars in America

 

[Han Patriot]

NIO should first set up factory in US and make everything from nuts and bolts there and then demand access.

NIO is only slightly better than VF, good name but no core technology. The Chinese Market will choose and destroy useless companies

 

[Menthol]

NIO...

I don't know, despite the name is big.

But I don't feel anything stand out about NIO in that price range despite their quality is better than Tesla.

Polestar seems to be more interesting than NIO in my opinion.

NIO is too plain and flat, I think.