Chinese EV Startup Nio Challenges US Obstacles

A Nio Inc. EC6 electric sport utility vehicle (SUV) is seen at a NIO battery swap station on October 29, 2021, in Xi an, Shaanxi Province of China. (Jin Zheming/VCG via Getty Images)

The United States prides itself on being a free economy that provides equal opportunities for all, however, this perception is seemingly not shared by Chinese electric vehicle startup Nio, Inc. (NASDAQ:NIO).

Traders work at the New York Stock Exchange in New York, the United States, on Sept. 12, 2018. NIO Inc., a Chinese electric vehicle start-up, rang the New York Stock Exchange (NYSE) opening bell on Wednesday in celebration of its initial public offering (IPO). The company, trading under the ticker symbol of NIO, announced the pricing of its IPO of 160,000,000 American depository shares (ADSs), at 6.26 U.S. dollars per ADS for a total offering size of approximately 1 billion dollars, assuming the underwriters do not exercise their option to purchase additional ADSs. Founded in 2014, NIO, dubbed as China’s Tesla, is a pioneer in China’s premium electric vehicle market. (Xinhua/Qin Lang via Getty Images) 

“The world should be more open and stop politicizing business,” said Nio’s CEO William Li in an interview with the Financial Times. The executive said he sees a radical change in the global political climate since the time Nio was set up in 2015, adding the pandemic further stirred up “division and antagonism.”

Li questions why, despite Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk receiving a “red-carpet treatment” from Chinese officials during his visit in June, Chinese companies encounter obstacles when trying to market their high-tech vehicles in the U.S.

“Chinese consumers have a wide range of [new energy vehicles] to choose from. Why can’t these products be enjoyed by U.S. consumers as well?”  he asked.

Li also rejected claims that the success of domestic startups in China has to do with rising patriotism among younger Chinese consumers. “Chinese consumers are just like consumers everywhere around the world, they focus on quality,” he said.

William Li Bin, co-founder and CEO of the electric car manufacturer NIO Inc., and Hildegard Muller, President of the German Association of the Automotive Industry, visit the NIO booth during the 20th Shanghai International Automobile Industry Exhibition at the National Exhibition and Convention Center (Shanghai) on April 18, 2023, in Shanghai, China. (Yan Minglei/VCG via Getty Images) 

The Nio CEO warns that foreign brands unable to keep up with Chinese innovation could find themselves in a “dangerous situation.”

Nio is among the electric vehicle startups in China that have carved a niche for their vehicles among consumers. The company has popularized its “battery-swapping” service in China, thereby making its cars affordable to consumers.

With the competition in the domestic market heating up, a newer breed of NEV manufacturers are eyeing global expansion. Nio for one has started selling cars in Norway, Denmark, Sweden, Germany, and the Netherlands. So have others, including Warren Buffett-backed BYD Company Ltd. (OTC:BYDDY) (OTC:BYDDF) and XPeng, Inc. (NYSE:XPEV).

Nio currently has its North American headquarters and advanced research and innovation center in San Jose, California.

China is set to overtake Japan as the biggest exporters of car this year after wresting the second position from Germany in 2022, the FT report said.

Produced in association with Benzinga

Edited by Alberto Arellano and Joseph Hammond