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William Li, the founder and CEO of Nio, one of Tesla’s main competitors in China, has called on the US government to give Chinese electric vehicle companies equal access to the American market. He argues that carmakers should not be caught up in the political tensions between the two superpowers.
In an interview with the Financial Times, Li questioned why Chinese companies faced obstacles in selling their high-tech cars to American consumers while Elon Musk, the CEO of Tesla, was given preferential treatment by senior Chinese government officials. He believes that the world should be more open and avoid politicizing business, especially in the current global political climate.
Nio, a Shanghai-based company, has international credentials with more than three-quarters of its investors coming from outside China. Li’s criticism of US protectionism highlights the challenges Chinese companies face in accessing foreign markets, particularly as EV makers like BYD, Xpeng, and Li Auto expand overseas aggressively.
With the Chinese domestic car market being highly competitive, exports have become increasingly important for Chinese EV companies. However, access to the US market is complicated due to high tariffs on vehicles from China and uncertainties over subsidies and the treatment of Chinese-branded vehicles and EV components under the Inflation Reduction Act introduced by President Joe Biden.
Li believes that Chinese consumers have a wide range of new energy vehicles to choose from and questions why these products cannot be enjoyed by US consumers as well. Although Nio has yet to export a car to the US, it faces growing competition at home.
Last year, Nio delivered 23,520 vehicles in China, but its market share in pure electric cars and plug-in hybrids shrank from 2.3% in the first quarter to 1.3% in the second quarter. The company recorded a net loss of $699.5 million in the first three months of the year and secured a $740 million investment in June to address cash burn rate concerns.
As China is expected to become the world’s biggest car exporter this year, Nio and other Chinese EV makers are focusing on Europe, where emissions rules incentivize the transition to EVs.
Nio is also differentiating itself from traditional automakers by emphasizing technology and services. The company is deploying battery swap stations across the region and aims to have close to 1,000 stations by 2025. Additionally, Nio offers premium services to middle-class Chinese consumers, including free designated drivers, shared office spaces, and free repairs.
In response to the perception that Nio’s success is driven by rising patriotism among younger Chinese consumers, Li asserts that Chinese consumers focus on quality and warns that foreign brands failing to keep up with Chinese innovation will face challenges.
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