Chinese EV manufacturer NIO set to replace Tesla
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NIO's Challenge to Tesla: Strategies and Future Models
Introduction
At the opposite end of Tesla’s decision to go private stands its biggest threat from China, NIO. A start-up with ambitions of raising a whopping $1.8 billion in a US IPO, NIO follows in the footsteps of Electra Meccanica to join NASDAQ.
NIO's Operations and Revenue
Despite wearing the facade of a global EV company, NIO is based in China where the majority of its operations take place. The only market where its first vehicle, the NIO ES8 (an all-electric SUV), is available is in China. With deliveries of the ES8 starting earlier this year and revenues registered at nearly $7 million, NIO’s books are still recording a loss – as is the case with most manufacturers attempting to enter the mass-produced market.
NIO's Strategy for Future Growth
Although analysts report that NIO could run out of money (raised from previous funding) before the end of the year if it continues spending at its current rate, the EV manufacturer has composed a 5-point strategy on how to use the money if the IPO goes through:
- Increase the model line-up: Introduce cars such as the ES6 (a small electric SUV expected to retail for $30,000) to target a broader customer base.
- Build manufacturing plant: Optimize manufacturing costs and reduce reliance on Chinese automaker JAC.
- Expand infrastructure: Serve customers across the nation with mobile car charging stations, EV service centers, and battery swap stations.
- Focus on technological innovations: Continue to enhance product offerings and improve user experience.
- Create monetization opportunities: Develop revenue streams during lifetime ownership.
Challenges Ahead
With 6,200 employees working at NIO and just 481 ES8 models delivered by the end of last month, the only roadblock in NIO’s short-term strategy is its hesitation to expand sales outside China. If not with the $67,000 ES8, or the $30,000 ES6, then with the ET7 sedan that is expected to hit production by 2020.
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