Nio and Tesla are vying for dominance in the electric vehicle market in China

SINGAPORE – As domestic automakers in China try to pit themselves against Tesla in the growing Chinese electric car business, Nio is well positioned to capture a large portion of the market, an analyst told CNBC.

Starting the Chinese electric car It released its first sedan, Et7, on Saturday with features of autonomous driving technology that claim to outpace those of Tesla. The et7 model with a 70 kWh battery starts at 448,000 yuan ($ 69,000) before the subsidy.

“This is New’s iconic car in the sedan segment,” Bill Russo, Founder and CEO, Automobility Limited, said Monday on CNBC.Street signs AsiaHe explained that the company has already established itself as a premium brand in the SUV category, selling at a higher price than its Chinese counterpart.

“They are now moving into the sedan segment, or the luxury segment,” said Russo, adding that the et7 will compete with the Model S.

“It is clear that the prices announced on Nio Day are actually quite competitive with the Model S,” he said, adding, “It is an ambitious statement, it is a statement of where they hope to place their brand and among Chinese companies, they are proving that they are the distinct company (of cars electrical) “.

Last year, Reuters reported that Tesla cuts model S price in China by 3%.

Catch up with Tesla

China is already the largest auto market in the world. In its bid to become a pioneer in electric vehicle technology, Beijing Industry support With subsidies, loosening restrictions and building shipping infrastructure.

Domestic electric vehicle manufacturers including Nio, Li Auto and Xpeng said deliveries rose last year – government data showed that sales of pure electric vehicles from January to November jumped 4.4% year-over-year versus a 7.6% decline in overall vehicle sales. Passengers in the same period. Still, their delivery numbers Came less than Tesla.

“It is clear that everyone is trying to stand against Tesla. Tesla is definitely the market leader. It has market capitalization that is far ahead of everyone else,” said Russo. For its part, Tesla’s market cap is around $ 768.93 billion as of Monday while Nio’s market cap is around $ 98.63 billion.

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

Kelly Chen | Bloomberg | Getty Images

Russo said Nio is “trying to prove itself as the Chinese Tesla, which means you have to compare yourself as a premium electric vehicle brand in China with access to the Chinese market, which is expected to grow significantly over the next five years.”

“These companies will grow with the market and I think Nio is well positioned to capture a lot of that,” he said, adding that the company still did not control all of its supply chain and relied on third parties for components such as autonomous drive chips.

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

Evelyn Cheng of CNBC contributed to this report.

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