What have you learned about setting up a sales network in China that you can take to Europe?
We spent three years developing an innovative way to build up a sales network in China, but that may not apply to Europe.
Where does China sit in terms of EV development compared with Europe?
China remains ahead in terms of development and investment in the EV industry, for example, in terms of batteries and charging. However, we can’t say the industry is more advanced compared with Europe. In the past decade the Chinese government has offered the highest incentives in the world. This resulted in the introduction of many models but very few competitive products. They weren’t driven by the market but by the policies. For the EV market there are a lot of similarities between Europe and China. EVs are on same starting line in both markets, therefore, we are going to see very similar development paths.
Nio currently sell two SUVs with a third one coming. Where will the EV market go in terms of body styles?
We started with SUVs [the ES8 and ES6] because we leveraged the same platform and our third model [the EC6] that is launching now is a coupe-styled SUV. In China, the passenger vehicle market is basically 50-50 for sedans and SUVs, but with a much faster growth for SUVs. Under our plan we aim to launch a new product every year. We will start deliveries of a new product next year. I won’t say what it is, but it’s not going to be an SUV.
How will the pandemic change consumer and government behavior in terms of EVs?
In some cases it will present some opportunities. For example, if people can install a home charger they can avoid fuel stations and public interaction in those places. A key issue, however, is that all countries will need to lower expectations for economic development and income growth. This is going to challenge consumption, and not just for EVs.
Could you imagine a situation where Nio builds cars in Europe or elsewhere outside of China?
At this moment we can’t predict our future manufacturing strategy. Our cooperation in China with JAC works very well because the manufacturing industry is mature and there is excess capacity. As a new car company we can focus on the technology. If we achieve very good sales in other regions then maybe we could consider local production in the future, but it’s still too early to say.
How will Nio and other players in China’s EV market be impacted by the winding down of government incentives? Are there some advantages maybe?
The Chinese government was supposed to end the subsidy this year but decided to extend it for another two years because of COVID-19, reducing it gradually. They set a threshold of 300,000 yuan (37,350 euros) [EVs that cost more don’t qualify for the subsidy]. The good news for Nio is that there’s an exception for vehicles that cost more than 300,000 yuan if you have battery swap technology. Nio is the only brand that can receive this incentive.
Battery swapping never took off in Europe and the Israeli company that pushed for it, Better Place, went out of business. Why do you believe this time it could work here?
What happened to Better Place doesn’t prove that battery swapping technology is the wrong technology. They were quite different from us because they didn’t sell any cars. We have cars with battery swap technology embedded. We believe battery swapping can level the playing field for EVs and solve range anxiety issues. It’s the same for Europe and the China – it’s an aftersales service provided to car buyers. As we enter the global market we are going to take this battery swap technology to more markets. We are also open to cooperating with other brands and companies.
How will you persuade others to redesign their vehicles to accept your batteries?
Right now we have 1,200 patents related to the battery pack, the vehicle, the power-swap stations and our cloud-based scheduling system. This is an end-to-end holistic system. In China we have provided more than 500,000 swaps to our customers. We believe it should be other carmakers who should be coming to us, rather than us go to them. We are open to cooperation.