Tesla Challenger NIO Inc. Delivers its 200,000 Electric Vehicle, a Significant Milestone
Electric vehicle startup NIO Inc, which has emerged as one of China's promising new electric vehicle startups, has reached deliveries of 200,000 electric vehicles in the world's biggest auto market.
Reaching deliveries of 200,000 vehicles is a significant milestone for NIO after launching its first vehicle, the ES8 SUV, in 2018. As a result, NIO is becoming a serious competitor to Tesla in China.
The 200,000 vehicle milestone, which took the company four years to reach, was reported by local media outlet Gasgoo, citing a company press release.
As of April 30, NIO's cumulative deliveries were 197,912 vehicles. Of this amount, 30,842 were delivered in the first four months of this year.
NIO is also planning to launch its sixth battery-powered model soon named the ES7, which is an SUV that will compete with Tesla's Model Y and BMW's X5L SUV that's sold in the China market.
NIO has yet to reveal the full specs of the ES7, but the details were leaked in a regulatory filing in China ahead of its pending launch, Chinese news outlet CnEVPost reported on Friday.
The company's fifth vehicle, the ET5 sedan, was unveiled in Dec 2021 at the company's annual "NIO Day" event. The mid-size ET5 is poised to compete with the likes of the Tesla Model 3 and other similar EVs in China.
NIO's ES8 SUV was first unveiled in 2017. The company followed up the ES8 with the ES6 compact SUV, EC6 fastback and full-size ET7 sedan.
Deliveries of NIO's new flagship ET7 sedan officially began in March. Representatives of NIO delivered the first ET7 sedans to customers at the company's headquarters in Hefei, China on March 28, 2022.
The ET7 is based on a concept vehicle that NIO first unveiled at Auto China 2019. The competitively-priced sedan is poised to become a direct competitor to Tesla's Model 3 and Model S in China, as well as the P7 Smart Sedan from NIO's domestic rival Xpeng Inc.
Some of NIO's growing sales however, can be attributed to how its electric vehicles are designed and the customer options it offers after purchase.
NIO's vehicles are uniquely designed, as the batteries can be removed at one of the automaker's battery swap stations called "NIO Power". The entire swap process takes about 10 minutes. It offers a faster alternative of plugging in and waiting for the battery to charge, but also helps address the current lack of convenient EV charging infrastructure across China.
NIO is also in talks to license its electric vehicle battery swapping technology to rival automakers.
In addition to launching new vehicles, NIO continues to expand its charging and battery swapping network. By the end of the year, the company said its will have in total over 1,300 Power Swap stations, 6,000 Power Chargers and 10,000 destination chargers online across China, including along China's famed Silk Road that links the eastern and western regions of China.
As of April 3, NIO had 888 battery swap stations and 729 NIO-branded supercharging stations online in China, according to data gathered by local media outlet CnEVPost.
Another way that NIO makes its electric vehicles more affordable is by offering a first-of its kind battery subscription plan in the industry. The automaker launched the "Battery-as-a-Service" (BaaS) monthly subscription plan in August 2020.
The BaaS model allows owners to pay a monthly fee for the battery that's separate from the vehicle's purchase price. It's designed to lower the upfront purchase price of the vehicle, so its more affordable.
The subscription service helps to offset the cost of the battery pack, which is the most expensive component of any electric vehicle, adding thousands of dollars to the sticker price.
Under the BaaS model, if a customer decides to purchase a NIO electric vehicle and subscribe to use the 70kWh battery pack under the BaaS model, the purchase price drops by 70,000 yuan ($10,450). Customers then pay a monthly fee of 980 yuan ($146) for the battery pack itself.
NIO also offers customers the option of upgrading to a bigger battery after purchase for a small monthly fee. The company announced the new "battery exchange program" in December.
NIO customers with the standard 70 or 75 kWh battery pack in their vehicles can upgrade to a more powerful and longer range 100 kWh battery by paying an additional 880 yuan (US$140) a month. The 100 kWh battery pack has a NEDC range of 615 km (382 miles) and is available as an option on NIO vehicles.
NIO ET7 customers will also be offered a subscription service for NIO Autonomous Driving (NAD), the company's autonomous driving feature that's similar to Tesla's Autopilot. It's expected to be available in the fourth quarter of this year.
NIO success as an EV startup comes as U.S. electric truckmaker Rivian struggles with production delays and supply chain issues.
In Nov 2021, Rivian revealed in an SEC filing ahead of its high profile IPO that it had approximately 55,400 R1T pickups and R1S SUV pre-orders in the U.S. and Canada. Each customer paid a fully refundable deposit of $1,000 to reserve their Rivian vehicle.
But in its amended SEC filing, Rivian wrote, "Based on our current production forecast, we expect to fill our pre-order backlog of approximately 55,400 R1 vehicles by the end of 2023."
More recently, Rivian warned that it might not hit its production targets this year, which has caused some reservations holders to cancel their orders. The company said supply-chain issues could cut its planned production by half in 2022 to just 25,000 vehicles.
Like Rivian, NIO is a U.S. listed company that's turned to Wall Street to raise money from investors. NIO launched its U.S. IPO on Sept 11, 2018. The company's shares are listed on the New York Stock Exchange under the stock symbol "NIO". While shares of Rivian trade of the NASDAQ under the symbol "RIVN".
However the share of both companies fell significantly since the start of the new year. NIO's shares are down 56.6% since Jan 1, while Rivian's share price fell by 75.8% since the start of the year.
Legacy automakers and electric vehicle startups like NIO and Rivian are also being hit hard by the ongoing semiconductor shortage and rising inflation resulting in higher costs of raw materials throughout the auto industry.
With that being said, the global climate of the past two years plus makes NIO's 200,000 delivery milestone look even more impressive and shows the company's potential going forward.
To put that in perspective, NIO's achievement equates to electric truckmaker Rivian being able to build and deliver 50,000 electric vehicles this year and 150,000 more over the next three years, which would be a monumental achievement.
NIO is also planning to expand outside of China.
In June of last year, NIO announced it received approval to sell its ES8 SUV in Europe, paving the way for the company's expansion for the first time outside of China. NIO's expansion to Europe will help the company better compete with Tesla and other automakers in Europe's growing EV market.
Following Norway, NIO plans to expand to Germany, the Netherlands, Sweden and Denmark.
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