Betting on flexibility, China’s Nio will only rent cars in new EU markets

BERLIN, Oct 7 (Reuters) – Chinese electric vehicle maker Nio (9866.HK) will only lease its cars when it launches in four European markets this year, its CEO told Reuters on Friday, betting that flexibility is important Will be a selling point Drivers are switching to the new technology.

Users can lease a car with a 75 gigawatt-hour battery for €1,199 to €1,295 ($1,171 to $1,264) per month, depending on the length of the subscription, which can be as little as one month.

The plan is the company’s latest unconventional move, which already allows customers to rent the battery — the most expensive part of an electric vehicle (EV) — instead of buying it.

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Instead of charging their car at home, Nio owners can also drive them to a battery swap station to have a new power pack fitted in minutes to save time.

Now, as Nio prepares to launch in Germany, the Netherlands, Sweden and Denmark, Nio plans to operate its stores there on a corporate lease and subscription model, offering all three models available in China – ET7, ET5 and EL7, with the latter in Europe Renamed Audi from its Chinese name ES7 because of a trademark dispute with Volkswagen (VOWG_p.DE).

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“We will not be selling cars,” said CEO William Li in an interview at the company’s new “Nio House” showroom in central Berlin, the first of nine club-like new member venues opening this year for Nio fans in Berlin be opened in Europe.

“Flexibility is the new premium.”

Nio has sold nearly 250,000 vehicles in China and Norway since production started in 2018. Prices range from around €50,000 to €70,000 ($49,000 to $69,000) depending on the range of the car and whether customers are buying or renting the battery.

Until now, they have worked on an order basis, made tailor-made products for customers and kept inventories low.

Nio will stick to direct sales in existing markets, partly due to less attractive taxation of subscription models in Norway and license plate restrictions in China, Li said.

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Nio faces competition in China from a growing number of EV startups from Xpeng (9868.HK) to Hozon and Leapmotor, as well as larger manufacturers like China’s BYD (002594.SZ) and Tesla (TSLA.O).

In Europe, it will chase Tesla and Volkswagen (VOWG_p.DE) for the top spot in electric vehicle sales.

The plan is to install at least 120 battery swapping stations in Europe by the end of next year, Li said, adding it’s not so much about the financial investment as the time and bureaucracy it will take to achieve it.

The company opened its first plant manufacturing switching stations in Hungary last month and would consider producing batteries in the region once it achieves battery sales of about 10 gigawatt-hours in Europe, Li said.

“The advantage of our business of separating the car from the battery is that we can achieve economies of scale faster on batteries than on cars,” Li said. “When we reach 10 gigawatt hours, we will start thinking about local production. “

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In China, where this goal has already been achieved, a team of around 700 employees is working on its own battery production, which will enable the company to take control of its battery supply.

Meanwhile, Nio is looking for more partners besides its current supplier CATL, Li said, adding that the goal is to secure new partnerships next year.

“In the long term, we believe that every top company in the automotive industry will soon have its own battery production facility,” Li said.

Nio’s second-quarter revenue rose 22% year over year, while its net loss more than quadrupled to the equivalent of $410 million.

Almost 32,000 vehicles were delivered in September, 29.3% more than in the previous year. Supply chain problems in China due to COVID-19 lockdowns in August eased faster than expected, Li said.

($1 = 1.0207 euros)

($1 = 1.0248 euros)

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Reporting by Victoria Waldersee Editing by Rachel More and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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