BERLIN — Chinese electric vehicle maker Nio will only lease its cars when it launches in four European markets this year, its chief executive said Reutersbetting that flexibility will be a key selling point as drivers transition to the new technology.
Users will be able to lease a car with a 75 kilowatt-hour battery for 1,199-1,295 euros ($1,171-$1,264) per month depending on the length of the subscription, which can be as little as one month.
The plan is the latest unconventional move by the company, which already allows customers to lease rather than buy the battery — the most expensive part of an electric vehicle (EV).
Instead of charging their cars at home, Nio owners can also drive them to a battery swap station to install a new power pack in minutes to save time.
Now, as it prepares to launch in Germany, the Netherlands, Sweden and Denmark, Nio plans to operate its business there on a corporate lease and subscription model, offering all three models available in China – the ET7, ET5 and EL7, with the latter renamed in Europe from its Chinese name ES7 due to a branding dispute with Volkswagen’s Audi.
“We’re not going to sell cars,” CEO William Li said in an interview at the company’s new Nio House showroom in central Berlin, the first of nine new members’ club-style venues to be opened to Nio fans in Europe this year.
“Flexibility is the new premium.”
The Nio has sold just under 250,000 cars in China and Norway since production began in 2018. Prices range from around 50,000-70,000 euros ($49,000 – $69,000), depending on the car’s mileage and whether customers buy or lease. the battery.
Until now, it has operated on a build-to-order basis, creating custom products for customers and keeping inventories low.
Nio will stick to direct sales in existing markets in part because of the less attractive taxation of subscription models in Norway and restrictions around license plates in China, Li said.
Nio faces competition in China from a growing number of electric car startups from Xpeng to Hozon and Leapmotor, as well as larger manufacturers such as China’s BYD and Tesla.
In Europe, it will chase Tesla and Volkswagen for the top spot in EV sales.
The plan is to install at least 120 battery-swapping stations in Europe by the end of next year, Li said, adding that it’s not so much a question of financial investment as the time and bureaucracy required to do so.
The company opened its first swap station manufacturing plant in Hungary last month and will consider battery production in the region once it reaches battery sales in Europe equivalent to about 10 gigawatt hours, Li said.
“The advantage of our business, which separates the car from the battery, is that we can achieve economies of scale for batteries faster than cars,” Li said. “When we reach 10 gigawatt hours, we will consider localizing production.”
In China, where this goal has already been achieved, a team of about 700 people is working on domestic battery production, allowing the company to take control of battery supplies.
Meanwhile, Nio is looking for other partners outside of its current supplier, CATL, Li said, adding that it aims to secure new partnerships in the coming year.
“In the long term, we believe that every leading company in the automotive industry will soon have its own battery production,” Li said.
Nio’s revenue rose 22% in the second quarter from a year earlier, while its net loss more than quadrupled to the equivalent of $410 million.
It delivered just under 32,000 vehicles in September, up 29.3% year-on-year. China’s supply chain problems due to a COVID-19 lockdown in August eased faster than expected, Li said.
(Reporting by Victoria Waldersee Editing by Rachel Mohr and Mark Potter)