About This Source - Bloomberg QuickTake: Now
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Bloomberg Quicktake: Now published this video item, entitled “Can China’s Nio Beat Tesla in the World’s Largest EV Market?” – below is their description.
Chinese EV maker Nio has become Elon Musk’s most visible nemesis in a country that seems to be minting Tesla adversaries every other day. While other electric vehicle companies may pump out more cars aimed at the mass market, Nio is targeting the premium buyers that Musk – who established his first Gigafactory outside the U.S. on the outskirts of Shanghai in 2019 – needs to realize his ambitions for global growth and long-term profitability. China is ground-zero in the transition away from gas-guzzlers to alternative-energy cars, with the government intent on dominating a new automotive era that has triggered an onslaught of investment over the past six months and that even the U.S. is now embracing.
The biggest car market on the planet, China is already the world’s largest for EVs. Sales will reach 2 million this year and surge to 6.2 million vehicles by 2025, when they will account for a quarter of all passenger car sales in the country, according to BloombergNEF.
Nio delivered more than 20,000 vehicles, all of them SUVs, in the first quarter at an average price of $68,000, while Tesla shipped around 17,000 of its Model Y sports utility vehicle in China, which starts at around $53,000. Nio’s share of the overall China market for higher end cars is second only to Tesla, according to Kang Jun, an analyst at consultancy LMC Automotive, and it’s set a “benchmark” for the wider EV space, “particularly in product and service innovation.”
But Tesla isn’t the only foe Li has to worry about. A Battle Royale is brewing in China’s new energy car market — where retail sales of battery-powered passenger vehicles jumped 10% to 1.11 million last year, despite the hit from the pandemic — one that will challenge both Nio and Tesla, and set the stage for global control over the future of cars.
After years watching from the sidelines, the big auto-making giants are doubling down on EVs, with Volkswagen AG launching an eight-car range from its platform designed for battery electric cars in China, Toyota Motor Corp. unveiling a new EV platform, and premium carmakers like BMW AG aiming for one-quarter of all Chinese sales to be electric. At the same time, Big Tech is eyeing the sector, lured by the technological possibilities. Chinese search-engine titan Baidu Inc. to smartphone maker Xiaomi Corp. and networks giant Huawei Technologies Co. have pledged almost $19 billion into the EV and autonomous driving space since the start of the year alone.
Smaller companies like Nio — which is listed with compatriots Xpeng Inc. and Li Auto Inc. in New York, putting them on the radar of U.S. investors — will face greater pressure as multinationals enter the fray, said Zhang Xiang, an auto-industry researcher at North China University of Technology in Beijing.
“It’s by no means a time they can rest easy.”
Nio is still yet to turn a profit but its sales have risen steadily since — topping $1 billion for the first time in the three months to Dec. 31, 2020. The company narrowed its net loss in the first quarter of 2021 to 451 million yuan, down from 1.69 billion yuan a year earlier and 1.39 billion yuan in the fourth quarter of 2020. Even the businesses that underpin Nio’s lifestyle brand are making money, contributing to 1.1 billion yuan in revenue from non-vehicle sales last year, according to the company’s annual report.
It’s a long way from Li’s relatively humble beginnings. Raised by his grandparents in a small village in the hills of Anhui, known for farming and — more recently — the automobile industry, Li calls himself one of China’s “first generation of `left-behind’ children’’ because both his parents moved to the neighboring province of Jiangsu to pursue better work. There was no electricity in the village until Li was in his teens.
He started Nio in late 2014 with funding from a group of well-known investors, including Li Auto founder Li Xiang and Richard Liu, the founder of e-commerce portal JD.com. Xiaomi’s Lei Jun was also an early backer.Bloomberg Quicktake: Now YouTube Channel
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