Startup Nio to Launch Its First Electric Car for China
Electric vehicle startup Nio plans to offer customers its first model within months, offering it at a price far below that of Tesla Inc.’s comparable model.
The launch could put pressure on Tesla in the world’s largest electric vehicle market because the U.S. company isn’t expected to manufacture its Model X into China until 2020, Tesla CEO Elon Musk said recently.
The seven-seat Nio ES8 — which boasts a 70 kilowatt-hour battery pack that allows a driving range of 355 kilometers (221 miles) — will cost 448,000 yuan ($67,800), compared with 836,000 yuan for Tesla’s Model X. The ES8 is expected to hit the market in the first half of 2018.
Nio took in 1.1 billion yuan in its fifth and latest round of fundraising, according to people familiar with the matter. The automaker counts Tencent Holdings Ltd., Baidu Inc., e-commerce retailer JD.com Inc. and venture capital firms Hillhouse Capital Group and Sequoia Capital China among its investors.
Nio, founded three years ago by internet entrepreneur William Li, is among a group of startups that have taken advantage of central government incentives, including subsidies, for the electric car industry.
China now boasts the world’s largest electric vehicle market. More than 500,000 electric vehicles were sold in China last year, accounting for half of global output. Still, few electric vehicle models are suited to consumer tastes, leaving room for startups to launch new models.
WM Motor Technology Co. Ltd. unveiled its first model — a purely electric SUV — last week after completing a new round of fundraising from a group led by Baidu.
In October, China’s Ministry of Commerce confirmed that Tesla was negotiating with the Shanghai government to build a production facility in the country after reports surfaced that Tesla and the Shanghai government reached a deal to establish a wholly owned electric-vehicle factory in the city’s free trade zone.
Unlike Tesla, Nio has adopted a battery swap system, which will enable owners to swap their vehicles’ battery packs for fully charged packs in about three minutes at stations around the country. Nio plans to set up 1,100 such power-swap stations by 2020.
The company also plans to offer mobile charging services through what it calls “power mobile” vans equipped with battery packs and onboard chargers.
However, it is still unclear whether the business model will work, given the lack of infrastructure. For charging facilities to be as prevalent as gasoline stations in China, 100,000 charging facilities are needed, requiring an investment of up to hundreds of billions of yuan, according to data provider bosidata.com.
Contact reporter Mo Yelin (firstname.lastname@example.org)
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