Global plans: NIO share + 400%: Tesla competitor NIO plans battery subscription – and wants to expand to Europe | message
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NIO on the road to success
Plans for expansion into Europe presented
Battery subscription should make vehicles more attractive
Financing round helps ailing e-car manufacturer back on its feet
The Chinese electric vehicle manufacturer NIO has been listed on Wall Street for about two years. After the company’s financial problems became public last year, the share price collapsed by more than 80 percent. Since then, according to CNBC, the Tesla competitor has parted with a large number of employees, including employees in management positions. In the middle of the Corona crisis, however, NIO then held financing talks with the city of Hefei in south-east China, which ultimately resulted in funds worth around one billion US dollars. Some government institutions were also among the investors. In June, NIO also set a record for vehicle deliveries. During this period, the company delivered 3,740 cars, in the second quarter of 2020 the total was 10,000.
With the most recent major price jump at the end of August, the NIO share has already risen by almost 400 percent since the beginning of the year (as of September 1). Now NIO is forging further, big plans for the future.
NIO wants to take off in Europe
In the second half of 2021, the company wants to start positioning itself in countries that are mostly positive about electric cars, according to the company’s founder and CEO William Li in mid-August, according to CNBC. He hopes that the company will soon be able to begin its expansion plans in Europe. However, the CEO has not yet wanted to announce in which countries exactly NIO will first attract customers. The preparations should already be in full swing, so that NIO wants to have entered the most important global markets in 2023 and 2024.
Chinese automotive market hit hard by corona crisis
The Chinese auto industry has not spared the economic consequences of the Corona crisis. Since the beginning of the year, the branch had to struggle with months of sales slump. According to a report by the Chinese Ministry of Industry and Information Technology, domestic car sales fell by 12.7 percent in the first seven months compared to the previous year, and vehicles with new energies were even sold 32.8 percent fewer. In July, however, the weakened industry seemed to be picking up again for the time being: Electric and hybrid vehicles were able to record an increase in their sales figures for the first time this year, with an increase of 19.3 percent.
China is the largest automobile market in the world – and aims to take a leading position in electric vehicles worldwide. Some of the Chinese startups that specialize in electric vehicles and beat a flood of competitors are also listed on US stock exchanges. Just a few weeks ago, Li Auto started trading on NASDAQ, while Xpeng also applied for an IPO on Wall Street in early August.
Battery subscription announced
In order to win the market for itself, NIO is now planning to offer batteries as a service, as CNBC further reported. With a subscription model, the car manufacturer could offer its vehicles at lower prices. The battery fees would be within the range of a tank charge, said Li. Customers who take out a subscription for the equivalent of at least $ 140 per month will receive a discount of $ 10,000 when purchasing a vehicle from NIO. The EC6, which was only announced in July and is scheduled for delivery in September, can be ordered at a full price of around US $ 52,571. To support the new service, NIO has also founded a new battery-based company based in Wuhan, China, whose investors include leading battery developer CATL, Hubei Science Technology Investment and financial services company Guotai Junan International. Each of the four companies is said to have invested approximately $ 29 million and hold an equity stake of 25 percent each.
With the subscription model, NIO wants to encourage customers to buy electric vehicles who have previously driven a petrol engine and regularly spend money on tank loads. Regardless of the company’s new business model, demand had already increased in August, said Li. For the third quarter, the company plans to deliver between 11,000 and 11,500 vehicles. Nevertheless, Li hopes to be able to compete with Daimler, Audi, BMW and Tesla with the battery subscription.
Finanzen.net editorial team
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