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Nio and Tesla are fighting for supremacy in the Chinese electric vehicle market

While local carmakers in China are trying to position themselves against Tesla in the growing space of Chinese electric vehicles, Nio is well positioned to capture a significant share of the market, an analyst told CNBC.

The Chinese starter electric car launched its first sedan, the et7, on Saturday with self-driving technology that it says surpasses Tesla’s. Et7 with a battery of 70 kilowatts per hour starts at 448,000 yuan ($ 69,000) before the subsidy.

“This is a car with icons for the Nio in the sedan category,”

; said Bill Rousseau, founder and CEO of Automobility Limited, on Monday at CNBC’s Street Signs Asia. He explained that the company has already established itself as a first-class brand in the SUV category, where it sells with a higher percentage of their group in China.

“Now they are moving to the sedan segment or the premium car segment,” Rousseau said, adding that the et7 will compete with the Tesla Model S imported.

“Obviously the prices announced on Nio Day are actually quite competitive on the Model S,” he said, adding: “It’s a statement of aspiration, it’s a statement of where they hope to position their brand, and among Chinese companies, they find that they are the first-class company (electric vehicle). “

Last year, Reuters reported that Tesla had reduced the price of the Model S in China by 3%.

Catching up with Tesla

China is already the largest car market in the world. In its quest to become a leader in electric vehicle technology, Beijing has supported the industry with subsidies, freer restrictions and the construction of charging infrastructure.

Domestic electric vehicle manufacturers, including Nio, Li Auto and Xpeng, said supply increased last year – government figures show that sales of clean electric vehicles jumped 4.4% year-on-year from January to November. basis compared to 7.6% decline in total car sales for the same period. However, their delivery numbers do not reach those of Tesla.

“Obviously everyone is trying to position themselves against Tesla. Tesla is certainly the market leader. It has a market capitalization that is so far ahead of all the others,” Rousseau said. Tesla, on the other hand, has a market value of about $ 768.93 billion as of Monday, while Nio has a market capitalization of about $ 98.63 billion.

Employees inspect the inspection line during a media tour of Nio Inc.’s manufacturing facility. in Heifei, Anhui Province, China, on Friday, December 4, 2020

Kilai Shen | Bloomberg | Getty Images

Nio “is trying to establish itself as China’s Tesla, which means you have to compare yourself as a first-class EV brand in China with access to the Chinese market, which will grow significantly over the next five years,” Rousseau said.

“These companies will grow along with the market, and I think Nio is well positioned to capture much of that,” he said, adding that the company still doesn’t control its entire supply chain and relies on third parties for components such as chipsets. autonomous driving.

For its part, Tesla has stepped up its efforts in China, including more New Year’s promotions. The company has a plant in the country that is capable of producing 250,000 cars, and has announced a new car, made in China, model Y, with a price of 339,900 yuan.

– Evelyn Cheng of CNBC contributed to this report.

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