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July 05, 2019 02:42 AM

Nio CEO cautiously eyes Europe entry for Chinese EV startup

Christiaan Hetzner
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    1NIO-MAIN_i.jpg
    HANS GREIMEL

    A Nio ES8 crossover is pictured in Heifei, China. The crossover will compete with the Audi Q7 in the world's No. 1 market.

    For about two years, the Nio EP9 sports car prototype had the fastest lap time of any electric vehicle on the grueling Nuerburgring Nordschleife at 6:45.90. Although the EP9's record fell last month to the Volkswagen IDR, the result proved that Nio's innovative technology could compete with the world's best. Nio founder and CEO William Li spoke to Automotive News Europe Correspondent Christiaan Hetzner during the Shanghai auto show about the EV maker's plans for Europe, competing with German rivals in China and the need for fresh funding after listing on the New York Stock Exchange.

    The best chance for a Chinese automaker to break into the European market is with EVs. Does Europe appeal to you?

    Yes. We want to be a global brand. We have almost 200 people in Munich, for example. But we are still a very young company and have limited resources. If we expand abroad, we should be profitable. That's why we should be very careful when we expand outside of China because it's very easy to enter a market, but very hard to survive and win.

    German brands dominate the Chinese premium car market. How can Nio break though?

    We just entered the segment with a vehicle that is not cheap, it [the ES8] costs about $75,000. As a competitor to the Audi Q7 seven-seat premium large SUV, we have a market share of more than 10 percent, and that is just the beginning.

    Do you see the German automakers as dinosaurs that are too slow to react to new trends?
    They are powerful, have lots of money and they are already changing. So while they may be giants, I do not see them as moving slowly. As a startup, however, we need to move faster.

    You showed the ET Preview concept sedan at the Shanghai auto show in April. When will this Tesla Model 3 rival debut?
    That was just to show the car's styling. We will gather the feedback and then decide when and how to launch a sedan in that segment.

    What's next for Nio?

    We have started delivering the ES6 SUV that competes with the Audi Q5, BMW X3 and Mercedes GLC. Our performance is better, our service is better, maintenance and operating costs are lower and charging is much more affordable than filling up with gasoline. Not only that, the license plate is free [in Chinese cities such as Beijing the plate can cost more than the vehicle] and you don't need to leave it at home one day out of the workweek [to comply with driving restrictions in China to reduce air pollution].

    MEET THE BOSS

    NAME: William Li
    TITLE: Nio Founder and CEO
    AGE: 45
    MAIN CHALLENGE:
    Achieving sustained profitability while expanding into new segments.

    Do you see any further need to raise funds after floating Nio on the New York Stock Exchange last September?

    This question is very sensitive. Speaking in general, we do need to raise new funds in the appropriate approach with the appropriate tools. If you look at Tesla, they raised tens of billions of dollars after their IPO [initial public offering]. We may not need such a huge amount of money, but we do need to raise more funds for future development so we can maintain our edge in this fierce competition.

    Would you wait until the share is at least trading back above its IPO price of $6.26?

    Of course, we will be planning for our future fundraising based on the stock price and the capital market performance. Obviously this is not the right time.

    Do you already have a commitment from Chinese Internet giant Tencent to invest additional funds in any new share sale?

    Nio has a lot of strategic shareholders. We maintain close contact to keep them up to date on our latest business. Right now, we don't have anything special to announce in regard to this.

    What kind of lesson can Chinese startups such as Nio teach the established automotive brands?

    We define the user experience and the digital experience differently. If you look at our culture and organization, you will find we are very people-oriented. We want to build a community of users who are all connected by our cars.

    AUTOMOTIVE NEWS EUROPE MONTHLY MAGAZINE

    This story is from Automotive News Europe's latest monthly magazine. To view the new issue, as well as past issues, click here.

     

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